Pennsylvania

Energy. Environment. Economy.

What Happens Now That Pennsylvania Legislators Have Passed An Impact Fee

Scott Detrow / StateImpact Pennsylvania

The Marcellus Shale impact fee's final draft

Pennsylvania’s House has passed a Marcellus Shale impact fee on a 101-90 vote.

Now that the legislation is on its way to Governor Corbett’s desk, what happens next? Here are some key milestones to look for.

Once Corbett signs the bill into law, counties hosting natural gas wells will have 60 days to pass an ordinance authorizing an impact fee within their borders. If a county’s commissioners don’t want a levy, they simply won’t hold a vote on the matter.

After the initial 60-day window ends, municipalities will have a chance to override any county commissioners who opt out of the impact fee.  If a township or borough wants a fee, it will need to pass a resolution reading, “The (insert name) in the county of (insert name) hereby resolves to have the county impose an unconventional gas well fee on each unconventional gas well spud in the county.” If more than half of a county’s municipalities do this within 60 days, the county’s fee will be enacted. The fee will also go into effect if counties representing more than 50 percent of the county’s total population pass the resolution.

September 1, 2012: The due date for retroactive 2011 fees. Senate Republican leaders estimate the fee will generate around $180 million, if every drilling county opts into the levy.

January 1, 2013: The bill requires natural gas drillers to post the chemicals they use during hydraulic fracturing on FracFocus.org. (This is something Marcellus Shale Coalition members have already begun doing on a voluntary basis.) Next January, the Department of Environmental Protection will evaluate the web site, and determine whether it’s providing enough well-by-well chemical information. If not, DEP may begin hosting the data on its website. (The impact fee marks a major improvement in Pennsylvania’s fracking disclosure regulations. Until now, companies have been required to report chemicals to the state, but the information has remained private.)

January 31, 2013: The Public Utility Commission will set 2012 fee rates. Per-well fees are based on a sliding scale. The PUC will set a rate based on two factors: changes in the Consumer Price Index, and 2012 natural gas rates.  Natural gas prices fluctuate on a daily basis, so the commission will arrive at the rate by taking the New York Mercantile Exchange’s natural gas price from the last day of every month, and averaging the 12 totals out.

April 1, 2013: 2012 fees are due. Legislative leaders estimate the second fee payment will generate about $211 million.

Comments

  • Fee Question

    Do you know how much, or what percentage of the CPI and price of NG it will be per well?  You give the total possible revenue but not on a per well/ production basis.

    • Scott Detrow

      The fee sets clear fee ranges based on price – the 2011 fee will be $50,000 per horizontal well, and $10,000 for smaller vertical wells. That will be the year 1 price if gas prices are between $2.99 and $5.00. The CPI adjustment appears to be more discretionary. PUC officials will set it once a year.

      You can read the bill language here: https://stateimpact.npr.org/pennsylvania/2012/02/06/here-it-is-the-impact-fee-bill/

      –Scott Detrow

    • Scott Detrow

      The fee sets clear fee ranges based on price – the 2011 fee will be $50,000 per horizontal well, and $10,000 for smaller vertical wells. That will be the year 1 price if gas prices are between $2.99 and $5.00. The CPI adjustment appears to be more discretionary. PUC officials will set it once a year.

      You can read the bill language here: https://stateimpact.npr.org/pennsylvania/2012/02/06/here-it-is-the-impact-fee-bill/

      –Scott Detrow

  • Douglas Shields

    and what are the implications of the preemptions of local zoning ordinaces??  PUC oversight of local legislative process??????  Just about the money huh???  Good luck with that.

  • Jennifer

    I greatly appreciate the in-depth, intelligent reporting you folks do on the Marcellus Shale issues.

    • Scott Detrow

      Thanks!

  • Donnie

    Will the zoning restrictions on compressor stations still limit them to Ag and Industrial zones? Will compressors that have already destroyed peoples’ residentially zoned neighborhoods be forced to relocate?

  • Heavenman77

    Shale fracking = US children future compromised. Water is life, don’t mess with our most precious ressource.

    • John_m76229

      Our most precious resource is people.

      • http://www.facebook.com/people/Michelle-Boice/100002038196217 Michell’e Boice

        And people cannot live without water!

  • http://www.facebook.com/people/Dan-Vaughn/508260740 Dan Vaughn

    In general I am against shale fracking and think long term we are going to pay a heavy price with our health, economy and environmental impact. However, that being said, if it “MUST” happen, communities should exact a high enough Impact Fee to may the gas companies seriously consider whether they REALLY want to drill in said community or township. Don’t think $100s, or $1000s. Think $100,000s per well!

  • Dan Vaughn

    In general I am against shale fracking and think long term we are going to pay a heavy price with our health, economy and environmental impact. However, that being said, if it “MUST” happen, communities should exact a high enough Impact Fee to may the gas companies seriously consider whether they REALLY want to drill in said community or township. Don’t think $100s, or $1000s. Think $100,000s per well!

    • John_m76229

      Who do you think will ultimately pay those fees?

  • jwozniak

    We, in Greene County, are still enduring the deleterious fallout from Act 54, a seriously flawing piece of legislation which effectively empowered the coal industry to do whatever it wanted to coalfield residents with little fear of consequences. Duke Lake is still a dry hole in the ground. Longwall call mining is still destroying land and water resources with impunity, and property owners are still defenseless against the onslaught. This new legislation makes us a target for yet another horde of well-funded corporate invades who care little for the basic human rights for those of us who are forced to play host to them. Greene County is, and always will be, Pennsylvania’s third world, except with fewer civil rights. Dunkard Creek is STILL dead, and no one will ever pay for this criminal act. 

  • Donnie Rhodes

    It is clear that this shameful piece of legislation places the well-being of Pennsylvania’s residents a distant second to the welfare of the gas drillers. Corbett’s pals at Range Resources, Chesapeake, et al, must be pleased as punch with this load of effervescent dung.
       Meanwhile, the greedheads will continue to rape this land and ruin the lives of the good people of rural Pennsylvania. When it comes to buying politicians, the drillers have certainly got their money’s worth.

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