Pennsylvania Legislators Set to Vote on Shale Impact Fee Today

According to press accounts, the Pennsylvania Senate may vote as early as this morning on a compromise proposal to direct upwards of $211 million a year in impact fees to local counties and communities from natural gas drilling in the Marcellus Shale. 

Last night, negotiators reached a compromise between the House and Senate on a 4-2 party line vote to advance a bill that levies a 15-year, per-well fee based on the average annual price of natural gas. With current prices, Pennsylvania expects to charge roughly $45,000 per well and after 10 years fees would be reduced on a declining scale from $5,000 to $10,000 a year based on future prices. Since 2008, natural gas drilling has boomed with developments in hydraulic fracturing in Pennsylvania as the number of drilled wells increased from 195 to nearly 2,000 today. Other neighboring states such as Ohio and Maryland are considering natural gas drilling impact fees to help meet infrastructure demands caused by the increase in production as well as providing a new source of revenue to augment state budgets.