“The Impact Fee was carefully constructed to compensate municipalities that hosted or were in proximity to natural gas development for any impacts that may be experienced.
“Impact Fee dollars were never intended to go to municipalities that took unreasonable actions to prevent ongoing natural gas development within the municipality.
“While municipalities may have some flexibility in how they zone or regulate oil and gas operations – provided they do not exceed limitations in state or federal law – doing so in an unreasonable manner which prevents future natural gas development should render the municipality ineligible for state collected and distributed impact fees.
“This legislation prohibits such disbursement of Impact Fee funds by the PA PUC [Public Utility Commission] and further requires the PA PUC to hold any funds during the pendency of any litigation challenging the validity of a local zoning ordinance.”
Click Here for the complete announcement.
History Of Preventing Local Regulation Of Oil/Gas
The Bartolotta/Yaw announcement forgets to mention Act 13 of 2012 setting up the impact fee also originally included a provision preempting any local regulation of drilling operations.
That provision was declared unconstitutional by the PA Supreme Court in a landmark ruling in December 2013 based on the Environmental Rights Amendment in Pennsylvania’s Constitution. Read more here.
The original intent of Act 13 to preempt any local regulation was not related to the impact fee, but a simple denial of the rights of municipalities as trustees of Pennsylvania’s environment to protect their citizens from the negative impacts of oil and gas drilling which was knocked down by the Court.
In October 2022, Sen. Yaw introduced legislation-- Senate Bill 1331-- denying counties Act 13 drilling impact fees if they restrict the leasing of land for drilling that was reported out of his Committee, but saw no further action.
Allegheny County adopted an ordinance restricting drilling for gas on county-owned lands which represented less than 1% of the land area of the county leaving 99%+ available for leasing. Read more here.
In October 2023, Sen. Yaw said in a written press statement House legislation which increased safety zone setbacks around natural gas infrastructure was “stupid” after a House Committee hearing on House Bill 170 (Otten-D-Chester). Read more here.
In May 2024, Sen. Yaw announced the introduction of legislation prohibiting the distribution of Act 13 impact fees to any county “that is actively suing over fossil fuel use.” Read more here.
Although not yet introduced, Sen. Yaw was attempting to prevent actions like Bucks County took to join a lawsuit charging oil companies intentionally deceived the public about the role fossil fuels play in worsening climate change. Read more here.
Punishing Municipalities That Protect Their Residents
The goal of the Bartolotta/Yaw legislation is to punish municipalities-- like Cecil Township, Washington County [in Sen. Bartolotta’s district]-- that are considering adopting restrictions like setbacks from shale gas drilling pads that go beyond the minimum 500 feet setback in state requirements.
Cecil Township is considering an ordinance with a 2,500 foot setback from homes and a 5,000 foot setback from schools and hospitals as recommended in a 2020 Office of Attorney General Grand Jury Report. Read more here.
The Township held four hearings on the issue of regulating shale gas development to better protect public health and the environment [Read more here] will consider the ordinance at a meeting on November 4.
Range Resources Appalachia, the primary shale gas drilling company in the Township, was a no show at the hearings.
The fact that the Bartolotta/Yaw legislation specifically directs the PUC to withhold Act 13 drilling impact fees during any legal challenge to local ordinances-- which routinely come from gas drilling companies-- is meant to be a specific deterrent to the adoption of more protective ordinances.
In 2023, Cecil Township received $317,453.25 in drilling impact fees, according to the PUC.
Lower Expectations Of Gas Industry Support
In June, the Independent Fiscal Office issued a report on the latest projections of revenue from the Act 13 Shale Gas Drilling Impact Fee showing a drop in calendar 2023 revenue to $179.1 million-- a nearly $100 million decrease from $178.9 in 2022. Read more here.
The IFO projects another $100 million drop in revenue in calendar year 2024 fee revenue from 2022 to $170 million.
This drop in revenues is the result of lower natural gas prices set by international markets and the fact the gas industry is drilling fewer new wells in an attempt to get the price of natural gas to increase.
The drilling impact fee is a per well fee and not a fee on production like all other oil and gas states have.
On September 19, the Pittsburgh-based Allegheny Institute for Public Policy published a policy brief on the steep decline in revenues from the drilling impact fees saying counties and municipalities need to “begin lowering their expectations” on the support from the shale gas industry drilling impact fee. Read more here.
(Photos: top- Range Resources Augustine Drill Pad in Cecil Township; Augustine Drill Pad showing scale of operation; bottom- Map of Shale gas wells (red dots), conventional oil and gas wells (blue/green dots) in Cecil Township (DEP Oil & Gas Program); 523 feet from nearest house; Well pad gas flare from bedroom window near Augustine well pad (WTAE). Other photos Courtesy of The Energy Age Blog.)
Related Articles:
-- Pennsylvania Voters Overwhelmingly Support Stricter Regulations On Fracking, New Poll Finds [PaEN]
-- The Derrick: PUC Considering Emergency Order To Have Aqua Pennsylvania Take Over 6 Rhodes Estate Water Companies [Fallout Continues From Conventional Oil Well Wastewater Spill 15 Months Ago In Venango County] [PaEN]
-- Beaver County Marcellus Awareness Community Receives Grant To Strengthen Communications and Community Engagement Initiatives [PaEN]
-- DEP Begins Accepting Applications For New Methane Reduction Grants To Plug Conventional Oil, Gas Wells Oct. 16 [PaEN]
-- EPA Files $4.2 Million Settlement Of Air Pollution Violations For 2019 Philadelphia Refinery Explosion, Fire; Public Comments Invited [PaEN]
-- Baker Hughes: PA Natural Gas Drilling Rigs Down 2 From Last Week; Down 38% Since Aug. 23 [Part Of Strategy To Increase Natural Gas Prices; Cut Payments To Municipalities Under Act 13 Impact Fees]
NewsClips:
-- WHYY - Susan Phillips: PA Voters Split On Fracking Ban Show Widespread Support For Stronger Regulations
-- The Center Square - Anthony Hennen: Fracking Poll: More, But Not Too Many, Regulations Supported By PA Voters
-- Observer-Reporter: Chevron Executive Questioned By Attorneys For Washington County Family Suing Driller For Health Impacts Of Fracking [PDF of Article]
-- Post-Gazette: Politics Of Fracking Involve More Than Fossil Fuels
--Washington & Jefferson College: October Marks 20th Anniversary Of Marcellus Shale In Appalachia
-- Observer-Reporter Editorial: Use Reason With Fracking
-- Inquirer - Frank Kummer: EPA Reaches $4.2 Million Settlement, Largest Of Its Kind, Over 2019 Philadelphia Refinery Explosion [Includes Copy Of Proposed Settlement]
-- WHYY - Sophia Schmidt: EPA Reaches Historic $4.2 Million Settlement Over 2019 South Philly Refinery Explosion, Fire
-- AP: EPA Reaches $4.2 Million Settlement Over 2019 Explosion, Fire At Philadelphia Refinery
-- WPXI: Cranberry Twp. Families Left With Unanswered Questions After Natural Gas Leak Complaints From 70 Homes
-- WPXI: Small Natural Gas Leaks Found In More Than 30 Homes In Cranberry Twp., Butler County
-- Utility Dive: PJM Plans To Delay Upcoming Electric Generation Auction By 6 Months
-- Utility Dive: PJM Floats Plan To Allow Limited Number Of Electric Generating Projects To Jump Into Interconnection Approval Process Early Next Year To Help Address Reliability Issues
-- Utility Dive: Omitting Talen Energy Reliability Must-Run Power Plants From PJM’s Next Capacity Auction Could Cost $14.5 Billion, Organization Of PJM States Says
-- Bloomberg: LNG Gas Ships Now Diverting To Europe, Away From Asia, To Tap Price Increases Driven By Mideast War Fears [This Week]
-- Bloomberg: LNG Gas Traders Choose To Pay Penalties For Not Shipping Gas To Germany To Chase Higher Profits In Asia [Last Week]
-- Reuters: Canadian Natural Gas Firms Eager For LNG Gas Boom Swamp Market With Excess Supply
[Posted: October 12, 2024] PA Environment Digest
