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Pennsylvania Lawmakers to Try Again on NatGas Pipeline Impact Fee

Two state senators from southeast Pennsylvania said they plan to re-introduce bipartisan legislation in early 2015 to enact an impact fee on natural gas gathering and transmission pipelines along the lines of one already in place for production.

Republican Sen. John Rafferty and Democratic Sen. Andrew Dinniman, who both represent parts of Berks, Chester and Montgomery counties, are co-sponsoring SB 1499, which was introduced and last referred in October to the Environmental Resources and Energy Committee.

"Throughout Pennsylvania, residents have been affected by the construction of natural gas lines, they wrote in a memo to lawmakers this week. “With the surge in natural gas drilling, many residents of Pennsylvania are experiencing the effects of the growth in this industry. Although the construction of this energy infrastructure is often done very efficiently, many communities experience a period of reduced quality of life and long-term impacts to the environment as a result of the construction process."

Rafferty and Dinniman referenced the traffic, noise, environmental impacts and safety risks associated with pipeline construction as reasons for reintroducing the legislation, which they plan to do next year.

Parts of southeast Pennsylvania, an area removed from the shale boom, have been home to pockets of construction opposition. Townships in Chester County, for example, recently aligned against Sunoco Logistics Partners LP's request for public utility status to bypass local zoning ordinances that it claimed were slowing down plans for Mariner East pipeline (see Shale Daily, Oct. 3; April 28).

The state already charges an impact fee for all unconventional wells drilled in the state (see Shale Daily, April 4; Feb. 15, 2012) Under SB 1499, an impact fee for pipelines would be calculated based on their  linear foot acreage and right-of-way width using the county average land value in an affected area.

The fees generated would be collected by the Pennsylvania Public Utilities Commission and deposited into a pipeline impact fund. The state senators said 10% of the collected fees would be used for administration, 50% would be used for annual payments to affected counties, and 40% would go to affected municipalities. The legislation would only apply to pipelines constructed after the bill's passage.

About 45 pipeline projects are in the works to serve growing supplies in Ohio, West Virginia and Pennsylvania. Newbuilds, pipeline reversals, system expansions and liquefied natural gas export facilities are expected to add 33.7 Bcf/d of takeaway capacity by 2018, according to a recent analysis by Range Resources Corp. (see Shale Daily, Oct. 15).

Gov.-elect Tom Wolf wants to enact a 5% oil and gas severance tax on producers (see Shale Daily, Nov. 5; May 21). Democratic state Sen. Jim Brewster unveiled a plan on Tuesday to allow shale drillers to credit current impact fee expenses toward a 5% severance tax that would go toward public education (see Shale Daily, Dec. 17).

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