The Department of Environmental Protection Friday announced the Environmental Quality Board adopted a final rulemaking increasing unconventional well permit fees. The new fees will take effect June 14. (formal notice)
“Under the Corbett administration, there has been a strategic, proactive approach to the oversight of this industry,” DEP Secretary and EQB Chairperson E. Christopher Abruzzo said. “The efforts to date have been unprecedented, and this fee increase will give us the ability to continue to grow and strengthen our program along with the growing industry.”
The department projects the increase will result in additional annual revenue of about $4.7 million, which will support new information technology projects related to oil and gas, including streamlining electronic review, mobile digital inspections, upgrades to reporting systems and modernization of forms and databases.
The new revenue will also be used to hire additional Office of Oil and Gas Management staff for inspections, policy and program writing, and permitting.
The final rule fixed the fees for unconventional wells at $5,000 for nonvertical natural gas wells and $4,200 for vertical natural gas wells. Prior to the rulemaking, the fee varied and was charged based on well bore length.
As a result of this change, the permit fee for an average unconventional well will increase by about $1,800 per nonvertical natural gas well and $1,300 per vertical natural gas well. The permit fees for conventional oil and gas well operators will remain the same.
Entirely self-sufficient, DEP’s Office of Oil and Gas Management is funded by fees, fines and penalties and also receives $6 million annually in impact fees paid by operators. The self-funded system saves taxpayers more than $21 million annually from the general fund.
By law, the oil and gas well permit fee must bear a reasonable relationship to the cost of administering DEP’s oil and gas programs. Department regulations require DEP to evaluate the appropriateness of the fee every three years.
The last fee increase took effect on October 24, 2009, increasing the fee from $100 to a sliding scale based on wellbore length.