Why Natural Gas Prices May Impact DCNR's Budget

  • Scott Detrow

Susan Phillips / StateImpact Pennsylvania

A sign posted in Susquehannock state forest.

The Scranton Times-Tribune takes a look at the link between natural gas prices and the Department of Conservation and Natural Resources’ budget.
DCNR is relying on Oil and Gas Lease Fund revenue to support its operations. The lower prices fall, the more the fund will shrink.

[DCNR is] set to receive $69 million from the separate Oil and Gas Lease Fund in fiscal 2012-13 to help support operation of state parks and forests and other administrative functions. This fund collects rents and royalties paid by oil and gas firms drilling on state forest land. The fund has been tapped for decades to pay for a wide range of conservation and recreation projects under terms of a 1955 law, but since 2009 a significant chunk of fund revenue has gone to prop up DCNR’s budget.
DCNR’s overall proposed budget for fiscal 2012-13 is $90.4 million, down $2 million from current levels.
At this stage, a total of 152 wells are producing gas in state forests while another 442 wells have been drilled, said [DCNR Secretary Richard] Allan. About half of the 1.5 million acres of state forest land in the Marcellus Shale formation has been leased to drillers. Declining prices for natural gas in recent months have led to lower estimates for oil and gas fund revenue, but that is offset by increasing production as more wells are drilled on the already leased forest land, Mr. Allan added.

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