Shale Daily / NGI All News Access

Pennsylvania Lawmakers: Impact Should Determine Well Fee

A group of Pennsylvania state lawmakers is proposing an impact fee on Marcellus Shale wells based upon the actual damage caused by natural gas operations in the state.

While other existing proposals would charge operators a straight fee, the Unconventional Well Impact Fee Act would charge operators a fee based on the assessed damage from the previous year averaged across the number of shale wells drilled in the previous year.

The fee would cover impacts to the environment and infrastructure of the state, as determined by the Pennsylvania Department of Environmental Protection, the Pennsylvania Department of Transportation and county conservation districts, and would include everything from water and soil contamination and hazardous material spills, to road resurfacing and bridge repair, to the impact of pipeline work.

While the bill does not fund statewide programs that some lawmakers view as essential for any measure, it arrives with support from across the state (see Shale Daily, Sept. 13).

The bill is sponsored by state Rep. Curt Schroder, a Republican from southeastern Pennsylvania, and seven other Republicans from across the state, including regions with significant shale activity, regions with limited activity and regions with no activity.

"This bill will protect the public and ensure that the true impact of Marcellus Shale drilling will be born by the drillers," Schroder wrote to fellow lawmakers.

The bill also does not cover the conventional drilling that existed before the Marcellus boom and continues today. The bill defines an "unconventional well" as any that produces from below the Elk Sandstone -- a relatively shallow formation above the Marcellus - but cannot produce commercially except through hydraulic fracturing.

The Pennsylvania General Assembly is considering more than 15 impact fee or severance tax proposals, but Gov. Tom Corbett said he will veto any tax increase and plans to soon introduce an impact fee of his own (see Shale Daily, Sept. 26; Sept. 16).

After three years of failing to produce a tax or fee, though, legislative leaders are getting antsy and Senate President Pro Tempore Joe Scarnati, a Republican from an increasingly active region of central Pennsylvania, recently told reporters that he wants to pass a bill in October and said the structure of the fee is less important than making sure it generates $200 million in its first year and works to standardize local zoning.

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