Shale Daily / NGI All News Access

ExxonMobil Backs Pennsylvania Fee in Principle

Although noting that industry never wants to be taxed, one of the largest players in the Marcellus Shale said it supports an impact fee in principle.

"The idea of an impact fee is one that we embrace," Kenneth Cohen, vice president of public and government affairs for ExxonMobil Corp., said at the Marcellus Shale Gas Environmental Summit in Pittsburgh Tuesday.

ExxonMobil operates in the Pennsylvania Marcellus, as well as other shale plays, through its subsidiary XTO (see Shale Daily, June 10).

"The impact fee discussion is important," he said. "We think that, if properly structured, it would be beneficial both to property owners and to the industry" by increasing the stakes for all parties and creating a process to address public concerns about the impact of industrial activities.

Although the Pennsylvania General Assembly is considering numerous structures for an impact fee, Gov. Tom Corbett proposed a $40,000 fee on each well in its first year, declining to $30,000 in its second year, $20,000 in its third year and $10,000 through its 10th year, raising as much as $120 million this year and nearly $200 million within six years.

Cohen said that support shouldn't be surprising because the impact fee proposed by Corbett came from the Marcellus Shale Advisory Commission, which included industry representation.

That support generally extends to other proposals made by Corbett, Cohen said. Although no specific legislation is yet available to support, Corbett wants to increase setbacks, bonding and presumptive liability, among other statutory changes (see Shale Daily, Oct. 4). "Most of what's in the governor's proposal we could support with the caveat that we'd like to have one last look at what is actually written," Cohen said.

Drilling activity for oil and gas in the Marcellus remains robust. According to NGI's Shale Daily Unconventional Rig Count for the week ending Oct. 21, 157 rigs were  currently in operation, down 2% from the previous week and 6% off of a month ago, but 11% higher than the 142 rigs that were operating for the similar week a year ago.

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