Wednesday, July 13, 2016

Allegheny Institute: Shale Gas Impact Fee Collections Dip Sharply

The Pittsburgh-based Allegheny Institute for Public Policy issued a report Wednesday providing an overview and analysis of the revenue collected under the Act 13 drilling impact fees, noting the 2015 collections were down to $187.7 million from a 2013 high of $225.8 million.
Through five years of collections, the impact fee has brought in more than $1 billion, the report said.
The falling price of natural gas and the reduction of drilling activity in the state resulted in lower impact fee collections.
The report pointed out, “The [natural gas] boom in the first few years contributed to a glut in the supply of natural gas that has subsequently depressed its market price.
“The price drop has caused a decrease in drilling activity which has led to a decrease in employment in this sector as well as a downturn in the amount collected by the impact fee.
“This just serves to point out the dangers of having the economy relying too heavily on an industry that is susceptible to volatile price swings.
“Pennsylvania legislators need to keep this in mind as they continue to contemplate whether or not to impose more taxes on such an economically volatile commodity to stabilize the state’s budget.”
A copy of the report is available online.
For more information on the drilling fees, visit the PUC’s Act 13 Impact Fee webpage.  The Independent Fiscal Office also put out an Impact Fee Update Thursday.
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