Pennsylvania Will Get 3 Percent Less This Year In Shale Drilling Impact Fees
Despite a slowdown in natural gas drilling, Pennsylvania will only see a small drop in the amount of impact fees it’s collecting, according to new data released this week by the Pennsylvania Public Utility Commission (PUC).
A year-old law, known as Act 13, places an impact fee on every gas well in the Marcellus Shale formation.
Last year, Act 13 brought in $204 million to the state and local communities. This year, it’s expected to bring in $198 million — a three percent drop.
There’s less money because the fees are tied to the price of natural gas, which declined by a third. That meant drillers were assessed a smaller annual fee ($45,000 per well in 2012) instead of the $50,000 fee they paid in 2011. Smaller, vertical wells paid $9,000 last year.
Companies begin paying as soon as a well is drilled (in industry lingo, when the well is “spud”). After that, the fees continue for 15 years while steadily getting smaller. So in 2012 there were also fewer of the higher “first-year” well fees. About 6,000 wells across Pennsylvania are subject to the law.
Payments were due to the PUC by April 1. The commission is charged with collecting and disbursing the fees. About $25 million stays at the state level for agencies impacted by drilling. The remaining money is given to local governments, with 60 percent going directly to areas impacted by drilling, and 40 percent to the Marcellus Legacy Fund, which gets used in communities across the state for things like infrastructure projects and environmental upgrades.
The PUC released the 2012 data on a new interactive website it’s created to show how the fees are assessed and where the money is going.
The table below shows drilling companies and what they’re required to pay for 2012:
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Source: Pennsylvania Public Utility Commission (Note: Discrepancies between the amount due and the amount paid mean either the payment has not been processed yet, or the producer is disputing the fee. According to the PUC, approximately 100 wells are being disputed.)