Saturday, September 20, 2014
Inquirer Daily News

Pa. expects increase in gas-well impact fees; $224.5M due this year

A well in Camptown, Pa. Revenue from drillers will go to regulatory agencies, the municipalities that host the wells, and to pay for infrastructure and environmental improvements and industry incentives. JULIA SCHMALZ / Bloomberg News
A well in Camptown, Pa. Revenue from drillers will go to regulatory agencies, the municipalities that host the wells, and to pay for infrastructure and environmental improvements and industry incentives. JULIA SCHMALZ / Bloomberg News
HARRISBURG - Pennsylvania's new "impact fee" on the booming natural gas drilling industry is expected to generate $224.5 million from wells in 2013, up 10 percent over 2012, Gov. Corbett's administration said Friday.

The projection is based on Pennsylvania Public Utility Commission data, and the money will be paid out July 1 to local governments and state agencies and programs.

The calculation comes as the prospect of slapping a bigger tax on the industry more in line with other gas-producing states is a common theme among Democrats running for the party's nomination to challenge the Republican governor in the fall.

The idea has some currency among Republicans, too. On Tuesday, a GOP candidate for an open Senate seat in Chester and Delaware Counties, Tom McGarrigle, proposed a 4 percent severance tax on the industry, echoing the position of the Republican incumbent, Sen. Ted Erickson, who is not running for reelection.

Senate Majority Leader Dominic Pileggi (R., Delaware) said many members of the Senate Republican caucus supported a severance tax, but conversations in the caucus never became serious given Corbett's past opposition. There has been no recent discussion in the caucus of advancing a severance tax, and none is planned, Pileggi said.

A two-year-old state law imposes a 15-year fee on companies drilling in the Marcellus Shale formation.

Of the $224.5 million, the state will take about $21 million up front for various regulatory agencies. Sixty percent of what is left will be split among counties and municipalities that host gas wells, and the remainder goes to state grant programs for roads, open space, environmental improvement, and water and sewer infrastructure and financial incentives to oil, natural gas, or chemical business enterprises.

Marc Levy Associated Press
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