Thursday, July 14, 2016

Independent Fiscal Office: Drilling Impact Fee Revenue Projected To Decline Thru 2018

The Independent Fiscal Office Thursday released a report on Act 13 drilling impact fees projecting a continued decline in revenue from the fees in 2016 in a variety of likely scenarios of between $5.4 million to $56.5 million.
The combination of low gas prices and fewer new wells producing is the cause of the decline, just like it was in 2015 fee collections.
The IFO concluded, “If these conditions hold, then drilling activity will likely remain subdued through 2018 and impact fee revenues will have limited opportunity for growth.”
The report also notes the development of new pipeline capacity to better connect natural gas producing areas to major markets in other states could allow regional prices of gas to rebound.
A copy of the report is available online.
The Allegheny Institute for Public Policy also issued a report Wednesday also noting downward pressure on drilling impact fee revenues.
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