Independent Fiscal Office Projects Another Drop In Act 13 Shale Gas Drilling Impact Fee Revenue In 2024 By As Much As $114 Million From 2022

On June 26, the Independent Fiscal Office issued a report on the latest projections of revenue from the Act 13 Shale Gas Drilling Impact Fee showing another drop in calendar 2024 revenue to from $165 million to $170 million-- a nearly $114 million decrease from 2023.

The least revenue collected from this fee was $146.3 million for calendar 2020.

The IFO reported calendar 2023 revenue was $179.1 million, down over $100 million from the record revenue in 2022 of $278.9 million.

This drop of an estimated $213 million in revenue over the two years leaves a significant hole in state and local budgets from impact fee revenue.

The IFO said a drop in natural gas prices and the decline in the number of shale gas wells being drilled both impact the formula used to calculate the per well fee required by Act 13.

The decline in the number of wells being drilled are as a result of the decisions by shale gas producers trying to increase natural gas prices by shutting in wells and limiting the number of wells being drilled.

For example, DEP’s workload report for the week ending June 14 showed six shale gas well permits were received, five were under review and 24 permits were issued.

In 2024 so far, DEP issued 240 shale gas well permits and 153 new wells were drilled.

The Act 13 fee is a per well fee, not based on natural gas production which increased from 7,451 billion cubic feet in 2022 to 7,528 billion cubic feet in 2023, according to the IFO report.

Click Here for a copy of the IFO report.

Related Articles:

-- Sen. Camera Bartolotta: PA Should Be Producing 4 Times The Gas We Are Now, Exporting It Around The World: ‘We Just Need To Get Government The Hell Out Of The Way’  [PaEN] 

-- House Committee Told Governor’s Energy Plan Diversifies Energy Generation, Avoids One-Fuel Dependence, Improves Grid Reliability, Lowers Consumer Costs, Generates Jobs; Or Upends Competitive Markets And Is A ‘Death Wish’ For Our Economy  [PaEN]

[Posted: June 26, 2024]  PA Environment Digest