House Committee Weighs Drilling Impact Fee

  • Scott Detrow

Up until Friday, the biggest “unknown” of whether or not a natural gas drilling impact fee would become a reality was where Republican Governor Tom Corbett stood on the issue.
With his Marcellus Shale Advisory Commission now endorsing the idea, the proposal has a much more likely chance of becoming law. Therefore, yesterday’s House Finance Committee hearing on an impact fee suddenly became a bit more interesting.
At the Lycoming County field hearing, the legislators listened to the now-familiar arguments for and against a levy on drillers. They also addressed specific impact fee proposals, including Republican Representative Brian Ellis’ plan to administer – not just distribute — the fee on the local level.

Here’s the Post-Gazette report, complete with the most colorful impact fee quote to-date:

“Everyone wants to quantify the cost of these impacts. But I’ll tell you, it’s like trying to give a snake an enema,” said Lycoming County Commissioner Jeff Wheeland.
Mr. Wheeland said that in his county costs have varied greatly from borough to borough. He described how one town was making money by selling water to drillers, while a nearby municipality was slammed with a $6 million bill for updates to an intersection that previously saw little traffic.
One solution, Mr. Wheeland suggested, would be to have drillers pay into some form of regional funds, which would issue loans or grants to local governments for their expenses.
He urged that a fee should be “merit-based,” rather than simply making funds available to any town located within the drilling region.

And the Williamsport Sun-Gazette covered energy executives’ warnings that an impact fee could slow down – or reverse – the drilling industry’s Pennsylvania growth:

David Spigelmyer, of Chesapeake Energy, said a severance tax would come on top of already burdensome state regulations and the cost of drilling and could have impact on decisions to drill in the state.
David Callahan, of the Marcellus Shale Coalition, said drillers are already subject to the state’s 9.9 percent corporate net income tax, the highest in the nation.

The commission’s full report will be released Friday. After that, we’ll look to see how Corbett reacts to its proposals. The governor is out of town the next few weeks, so we likely won’t hear any public comment from him on the issue until August, at the earliest.

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