Marcellus Shale Impact Fees Explained

After years of delib­er­a­tion on the issue, Penn­syl­va­nia leg­is­la­tors passed a bill over­haul­ing the state’s nat­ural gas drilling laws on Feb­ru­ary 8, 2012.

The leg­is­la­tion places an impact fee on every well drilling for gas in the Mar­cel­lus Shale for­ma­tion. The levy will change from year to year based on nat­ural gas prices and the Con­sumer Price Index, but in 2012, drillers will pay $50,000 per-well. (Smaller, ver­ti­cal wells will pay $10,000 this year.)

The bill’s authors esti­mate the fee will gen­er­ate around $180 mil­lion, when pay­ments are turned in on Sep­tem­ber 1. 60 per­cent of the rev­enue will stay at the local level, going to coun­ties and munic­i­pal­i­ties host­ing wells. The rest will go to var­i­ous state agencies.

While the fee is admin­is­tered and col­lected on the state level, coun­ties will decide whether or not to enact it. County com­mis­sion­ers have until mid-April to enact a fee. If any county chooses not to col­lect the money, its munic­i­pal­i­ties will have a 60 day win­dow to over­ride the deci­sion. When more than half of the county’s town­ships and bor­oughs pass a res­o­lu­tion call­ing for a fee, the levy will auto­mat­i­cally be adopted.

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