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Pennsylvania Oil, NatGas Impact Fees Stable in 2014

The Pennsylvania Public Utility Commission (PUC) collected $223.5 million in impact fees last year from the state's unconventional oil and natural gas drillers, down by about 1% from 2013, but up 9% since the fee was implemented in 2012.

Producers are required to submit impact fee payments to the PUC by April 1 each year. Each producer self-reports financial liability under the law, making it difficult to assess any increase or decrease in annual collections. The PUC has not yet provided a breakdown of the fees paid, how many wells were affected or how much each county and municipality would receive.

Producers have paid the PUC more than $200 million per year since the impact fee became law (see Shale Daily, April 4, 2014; Feb. 15, 2012). In its first year, the agency collected $204.2 million, but the next year collections dropped to $202.5 million before increasing in 2013 to $225.7 million.

The fee is charged for all unconventional wells in the state during their first 15 years in operation, regardless of how much they produce. It is calculated with a multi-year fee schedule that is based on the average annual price of natural gas. The funds are distributed to local governments and state agencies.

In 2013, 6,277 horizontal wells were required to pay the impact fee, with Range Resources Corp. paying the most at $28 million. Bradford County in the northeast part of the state that year received the biggest share at more than $7 million. To date, the impact fee has generated nearly $856 million for the state.

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