Ohio Gov. John Kasich, a Republican, proposed raising taxed on oil and natural gas produced from Ohio's shale deposits to 4 percent, up from the initial rate of 1.5 percent.
The governor said the current tax rate is "so low because Ohio has never been a major oil producer and our 40-year-old oil company tax never envisioned the explosion in oil and gas production we are seeing now," the Platts news service reports.
BP Chief Executive Officer Bob Dudley touted Ohio's energy potential at a Cleveland conference. He said there might be as much as 15.7 trillion cubic feet of natural gas in the state, making it one of the largest potential energy producers in the country.
The Ohio Oil and Gas Association said tax burdens shouldn't fall on "the state's emerging, but yet economically unproven, shale industry."
Ohio hosts portions of the Marcellus and Utica plays, two of the richest shale deposits in the United States. The American Petroleum Institute, a trade group representing more than 500 companies, said shale natural gas was a "game changer" for the region.