New Marcellus Shale Fee “Yields Higher-Than-Expected Revenue”

This week, the Pennsylvania Public Utility Commission (PUC) released impact fee revenue generated from unconventional natural gas wells through December 2011, exceeding projections by almost $25 million. The nearly $206 million in new revenue, as laid out in Act 13, is directed to the commonwealth and the 37 counties and nearly 1,500 municipalities where natural gas production is underway.

The impact fee – which is in addition to the more than $1.6 billion Marcellus Shale operators have paid in taxes and road improvement investments over the past several years – represents a new revenue stream for communities where Marcellus Shale Coalition (MSC) member companies operate.

At the same time, it underscores the need for greater certainty and predictability for local governments, landowners, and an industry representing more than 200,000 jobs across the commonwealth, according to the state’s Department of Labor and Industry. As outlined in our Guiding Principles, MSC members are committed to being responsible community members and good corporate citizens, working to provide sustainable, broad-based economic, environmental and energy-security benefits.

Here’s what they’re saying about this new revenue stream for our communities and the Commonwealth:

  • “Fees on more than 4,400 wells will produce $205.9 million to address environmental and social programs, and repairs for sewage and road systems, among other impacts. Officials had estimated $180.5 million in statewide payments this year from wells drilled in 2011 or earlier. “I’m pleasantly surprised,” Washington County Commissioner Larry Maggi said, noting that county officials have a list of road and bridge repairs that the money will go toward. “That really shocked me because I thought they overestimated it at the beginning. We were fully prepared if those numbers turned out to be unrealistic.” … “At a time when budget shortfalls are stretching state and local governments to their limits, responsible American natural gas production is helping to support tens of thousands of good jobs and providing enormous, much-needed revenues for critical services,” said Kathryn Klaber, president of the Marcellus Shale Coalition. (Pittsburgh Tribune-Review, 9/10/12)
  • “Natural-Gas Firms Have Paid Nearly $200 Million Under Act 13.” “When the legislation was being debated, lawmakers came up with an initial estimate of $180 million in revenue. The current tally, however, shows $205.9 million owed and $197.6 million paid. Marcellus Shale Coalition [president Kathryn Klaber] termed the amount “staggering by any measure”…and said the amount “serves as a stark reminder that we must ensure that we have commonsense policies in place, especially local zoning uniformity, at the center of Act 13, which encourage economic growth, job creation, and additional revenue.” … Doug McLinko, chairman of the Bradford County commissioners, said he expected about $12 million for local coffers.The commissioners expect to use it to pay off the county’s debt and reduce property taxes by perhaps 6 percent per taxpayer.” (Philadelphia Inquirer, 9/11/12)
  • “Pa. Drilling Impact Fee Raises More Than $200 Million.” “The state will take about $25 million off the top. Sixty percent of what’s left will be split among 37 counties and some 1,500 municipalities hosting gas wells. The money can be used to fix roads, bridges and other infrastructure, provide affordable housing, preserve open space and buy equipment for first responders, among other expenses. The Marcellus Shale Coalition, an industry group, used Monday’s announcement to press for “local zoning uniformity.” “At a time when budget shortfalls are stretching state and local governments to their limits, responsible American natural gas production is helping to support tens of thousands of good jobs and providing enormous, much-needed revenues for critical services,” coalition president Kathryn Klaber said. (Associated Press, 9/11/12)
  • “Pa. Shale Impact Fees Surpass Estimates.” “According to [PUC’s] calculations, 4,453 wells are liable for the fee this year, which is assessed on those drilled through December 2011. Combined, their payments surpassed the $180 million projected for the fee’s first round of collections, and could rise to nearly $206 million in the final tally. … The state’s largest drilling trade group, the Marcellus Shale Coalition, said fee payments announced Monday show that the industry is providing revenues to cash-strapped governments. It also noted that a key provision it sought to have enacted with the fee remains in limbo. “While these figures are indeed staggering by any measure, it also serves as a stark reminder that we must ensure that we have common-sense policies in place, especially local zoning uniformity at the center of Act 13, which encourage economic growth, job creation and additional revenue,” said coalition president Kathryn Klaber. (Pittsburgh Post-Gazette, 9/11/12)
  • “Local communities will see nearly $200 million in new revenue made available to them this fall,” said Eric Shirk, spokesman for Gov. Tom Corbett. … The impact fee revenue yield is a reminder of the need to uphold local zoning uniformity in the impact fee law, said Kathryn Klaber, president of the Marcellus Shale Coalition.” (Citizens Voice, 9/11/12)
  • “Natural Gas Fee Yields Higher-Than-Expected Revenue For 2011.” “The impact fee revenues for 2011 are about $26 million higher than the $180 million in revenue estimated by the state when the fee structure was passed in March. Washington County Commissioner Larry Maggi said he was “pleasantly surprised” by the higher-than-expected revenues. “Government has a habit of overestimating, so we didn’t expect that,” he said. With Washington County’s expected $5 million haul in fee revenue, Maggi said the focus would be on rebuilding infrastructure like roads and bridges. … Kathryn Klaber, president of the Marcellus Shale Coalition, called the figures “staggering.” “Responsible American natural gas production is helping to support tens of thousands of good jobs and providing enormous, much-needed revenues for critical services,” she said. (Pa. Independent, 9/10/12)