Pennsylvania Governor Gives Nod To Marcellus Gas Impact Fee

Pennsylvania Governor Gives Nod To Marcellus Gas Impact Fee

Corbett's proposal would allow counties to charge fee if approved by legislature.

On Monday, Pennsylvania Governor Tom Corbett unveiled his approval for counties to charge an impact fee on each natural gas well site in the commonwealth. His list of recommendations for legislative and administrative action include tightening many loopholes and hiking fees and fines.

Corbett now favors a per-well impact fee of up to $40,000 in the first year, $30,000 in the second year, $20,000 in the third year and $10,000 in year four through ten. That would be a maximum of $160,000 per well with about 75% of the revenue staying at the local level.

The impact fee will bring in about $120 million in the first year, climbing to nearly $200 million within six years, estimates Corbett. "As the number of wells grows, so will the revenue. Almost all of the money it brings in will go to benefit the places experiencing the impact."

That local 75% would be split up with 36% retained by the county, 37% distributed

to municipalities hosting the drilling pads and 27% to all municipalities within a Marcellus drilling impacted county. The distribution formula is to be based on population and highway miles.

The remaining 25% would be divided as follows:

70% to PennDOT for road, bridge, rail and other transportation infrastructure maintenance and repair within counties hosting Marcellus natural gas

development;

4.5% to the Pennsylvania Emergency Management Agency for emergency response planning and training;

3.75% to the Office of State Fire Commissioner for training programs for first responders and for specialized equipment necessary for emergency response;

3.75% to the Department of Health for collecting and disseminating information, and for health care and citizen provider outreach and education, and for investigating health complaints and other activities associated with shale development;

7.5% to the Public Utility Commission to enhance pipeline safety and increase inspections, and

10.5% to a restricted account at the Department of Environmental Protection to be used for plugging abandoned and unused gas wells, plus other natural gas related regulation and enforcement. 

Among drilling safeguards affecting farmland, state administrative action would include:

Increasing the well setback distance from private water wells from the current 200 feet to 500 feet, and to 1,000 feet from public water systems; 

Increasing the setback distance for wells near streams, rivers, ponds and other bodies of water from 100 feet to 300 feet;

Expanding an unconventional gas operator's "presumed liability" for impairing water quality from 1,000 feet to 2,500 feet from a gas well, and extending the duration of presumed liability from six months after well completion to 12 months.
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