PA Drilling Impact Fee Surpasses Estimates

On Monday, September 10, 2012 0 comments

In February, the State of Pennsylvania signed into law an "impact fee" on energy companies exploring Marcellus Shale.  Drillers were required to pay 50k for each horizontally drilled well and 10k for each vertically drilled well. It was estimated that the "Impact fee' could generate $100 million dollars for the State of Pennsylvania, benefiting not only the state but local municipalities.
The Public Utility Commission announced that the "impact fee" has generated approximately $206 million dollars from more than 4400 wells. The State of Pennsylvania will retain 25 million dollars o the revenue, while the remaining revenue will be split amongst 1,500 municipalities who host gas wells. The funds will be used to fix roads, repair bridges and improve other infrastructure. In addition, funds are earmarked to assist with providing affordable housing, preserving open space and buying equipment for first responders as well as assisting state agencies with drilling impacts.
Pennsylvania's new fee on gas drillers has raised more than $200 million, most of which will be distributed to counties and towns to fix roads, restore water supplies and pay other expenses borne by local governments in the Marcellus Shale region.
According to 13 News "Bradford County, the most heavily drilled county in Pennsylvania, expects to receive $6 million to $9 million".  They also shared the breakdown of revenue by energy company -
"Oklahoma City-based Chesapeake Energy Corp. was tops with $30.8 million paid on 624 wells. Two others paid more than $20 million: Calgary, Canada-based Talisman Energy Inc., $26.4 million on 540 wells; and Fort Worth, Texas-based Range Resources Corp., $23.7 million on 475 wells".
The "impact fee" will be collected once a year for 15 years and vary based upon the price of natural gas.


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