Published in Power Source, by Don Hopey

April 4, 2014

Pennsylvania expects to collect impact fees totaling $224.5 million this year for horizontally drilled, unconventional shale gas wells, according to an announcement today by Gov. Tom Corbett’s office.

The revenue total is primarily from fees assessed on 47 drilling companies for their Marcellus and Utica shale gas wells drilled in 2013, plus much smaller fees on previously drilled unconventional gas wells assessed under provisions of the state’s oil and gas law, Act 13.

It also includes $645,000 collected on “discrepancies” from past impact fees.

The 2013 total surpasses impact fee collections of $204.3 million for 2012 and the $204.2 million for 2011.

Patrick Henderson, the governor’s deputy chief of staff and energy executive, said each year has been above expectations.

“Given that it was $204 million last year, we expected $210 million this year," Mr. Henderson said. "To get $224 million was a pleasant surprise. The question is whether this year’s increase is sustainable and the new norm.”

More than half of the impact fee revenue is distributed by the state Public Utility Commission to municipalities and counties where gas drilling is taking place, and can be used for environmental, public safety, road and bridge repairs and emergency services.

Impact fee money is also distributed to county conservation districts and a number of state agencies, including the PUC, Department of Environmental Protection, Fire Commissioner’s Office and Fish and Boat Commission, for use in drilling oversight programs and activities.

According to the PUC, the shale gas drilling companies that were assessed the highest impact fees were Range Resources Appalachia LLC, which paid $27.9 million; Chesapeake Appalachia LLC, $26.7 million; SWEPI LP, a subsidiary of Royal Dutch Shell, $17 million; Talisman Energy USA Inc., $14 million; Chevron Appalachia LLC, $13.4 million; and Cabot Oil & Gas Corp., $13.3 million.

EQT Production Co. paid impact fees of $12.5 million; CNX Gas Co. LLC, a subsidiary of Consol Energy, paid $8.8 million; and XTO Energy Inc., a subsidiary of ExxonMobil, paid $7.4 million.

Mr. Corbett said, in a statement contained in the release, that the impact fee revenue has provided an economic boost to the state while helping to protect human health and the environment.

“We are building a stronger Pennsylvania by harnessing our abundant resources to create jobs for working families, reinvest in our local communities, and protect our environment for generations to come,” Mr. Corbett said. “Through Act 13, we are protecting public health and safety, safeguarding our environment, and making sure our world-class energy industry grows in a responsible way.”

(Don Hopey, "Act 13 impact fees on natural gas producers rise in Pennsylvania," 4/4/14)