Pa. gas drillers pay record amount in impact fees

• Shelby Bradford
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  Shelby Bradford was a reporter for StateImpact Pennsylvania as a fellow with the American Association for the Advancement of Science.

Natural gas drillers paid more than $278 million in impact fees in 2022, their largest amount since the payments began in 2012.

The record high comes two years after drillers paid their record low amount, $146 million, in 2020. Previously, the highest amount was $251 million in 2018. 

The impact fee is designed to offset the effects of natural gas drilling. The money goes to counties and municipalities affected by drilling, as well as to state agencies and the Marcellus Legacy Fund. 

This year, 32 counties and over 1,200 municipalities received more than $157 million combined. They can use the money for projects related to public infrastructure construction, emergency preparedness and public safety, judicial services, or other approved uses. 

Mike Belding, a county commissioner in Greene County, said the money is often used to meet funding match requirements on grants, and industry partners also contribute financially.

“We kind of dilute the requirements across several different municipalities, counties, and partners, and it makes it a more viable project financially,” Belding said.

In Washington County, impact fees have allowed for improvements to bridges and courthouse buildings, and upgrades to electronic records systems that improves communication between court offices.

“We deliver a better product and an easier product to access to the taxpayers,” Washington County Commissioner Diana Irey Vaughn said.

And, she said, Washington County hasn’t raised taxes for 13 years because of impact fee money.

State agencies, which include the state conservation commission, the Pennsylvania Emergency Management Agency and the Department of Transportation, received $17 million. Money directed to the Marcellus Legacy Fund is used for highway improvement projects, water and sewer projects, county greenway rehabilitation projects, and funds for hazardous clean ups. Over $103 million of the 2022 impact fees were transferred to this fund. 

Impact fees are collected based upon the number of wells in use, the price of natural gas, and the age of the well. The amount of gas produced by the wells is not taken into account or taxed. 

Act 13 of 2012 determines where the money goes. Only counties and municipalities that have an unconventional well within their borders and pass an ordinance imposing the fee receive money directly. Counties must submit a usage report in April indicating how the funds were allocated. 

The 2022 was influenced by a higher average price of natural gas ($6.64 per Metric Million British thermal units) and the addition of 574 wells in the reporting year. 

The payments are expected to be distributed in early July, the Public Utility Commission said. 

The counties receiving the most money and the amounts are: 

• Washington: $9,079,189.32
• Susquehanna: $8,960,100.01
• Bradford: $7,103,603.24
• Greene: $6,497,384.76
• Lycoming: $4,803,191.99
• Tioga: $4,016,537.20
• Butler: $3,040,966.46

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