Smaller-Scale Marcellus Drillers Worried They'll Be Priced Out By Impact Fee

Scott Detrow

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Scott Detrow is a congressional correspondent for NPR. He also co-hosts the NPR Politics Podcast.

Detrow joined NPR in 2015 to cover the presidential election. He focused on the Republican side of the 2016 race, spending time on the campaign trail with Donald Trump, and also reported on the election's technology and data angles.

Detrow worked as a statehouse reporter for member stations WITF in Harrisburg, Pennsylvania, and KQED in San Francisco, California. He has also covered energy policy for NPR's StateImpact project, where his reports on Pennsylvania's hydraulic fracturing boom won a DuPont-Columbia and national Edward R. Murrow Award in 2013.

December 19, 2011 | 11:19 AM

A handful of Pennsylvania energy companies drill for natural gas in the Marcellus Shale vertically, not horizontally. This means their production totals – and profits – are much lower than the larger-scale operations most people associate with shale drilling.
As the Tribune-Review reports, these companies are worried they’ll be priced out by a $40,000 or $50,000-a-well impact fee:

…Because the fee is the same for every well and not tied to production, small drillers who don’t produce as much gas say they would end up paying a higher percentage of their revenues. Their rate could be the equivalent of 9 percent.
Two small, closely connected drilling companies in Armstrong County have been lobbying state officials — with some success — to lower the proposed shale-drilling impact fees for a few small companies such as theirs. MDS Energy Development LLC and Snyder Brothers Inc., both of Kittanning, aren’t doing the large-scale work that state officials are trying to target and shouldn’t have to pay the same fee, said Michael Snyder, MDS founder and son of the Snyder Brothers’ president.
“Our reaction was that this is crazy,” said Snyder, 27, of Kittanning.