PUC: Act 13 Drilling Impact Fee Revenue Drops $100 Million From Last Year’s Record To $179.6 Million; Puts Hole In State, Local Budgets

On June 18, the Public Utility Commission reported calendar year 2023 revenue from the Act 13 drilling impact fee dropped $99.2 million to $179,634,750 from last year's record $278,881,450 assessed on unconventional shale gas wells even though natural gas production went up in 2023.

The more numerous conventional oil and gas well owners pay no fee.

County and municipal governments directly affected by drilling will receive a total of $100,302,825 for the 2023 reporting year. 

Additionally, $63,791,090 will be transferred to the Marcellus Legacy Fund, which provides financial support for environmental, highway, water and sewer projects, rehabilitation of greenways and other projects throughout the state. 

Also, $15,540,804 will be distributed to state agencies, as specified by Act 13.

With this year’s distribution, the PUC has collected and distributed over $2.7 billion to Pennsylvania communities.

The Act 13 fee is a per well fee, not based on natural gas production which increased from 7,441 billion cubic feet in 2022 to 7,520 billion cubic feet in 2023.

This year’s distribution is approximately $100 million less than last year, driven primarily by the average price of natural gas in 2023 ($2.74 per MMBtu) versus the average price in 2022 ($6.64 per MMBtu) which generated a lesser impact fee payment for each well in 2023 – along with the addition of only 423 new wells during 2023.

The PUC has forwarded the information to the Department of Treasury and expects payments to be distributed in early July.

Extensive details regarding the impact fee distribution are available online, including specifics on funds collected and distributed for each year since 2011. 

Visitors can search and download statistics such as distributions to individual municipalities or counties; allocation and usage of those funds, based on reports submitted by various municipalities; eligible wells per county/municipality; and payments by producers.

The PUC is responsible for implementing the collection and distribution of an unconventional gas well fee (also called an Impact Fee), established by the Unconventional Gas Well Impact Fee Act and signed into law as Act 13 of 2012.

Visit the PUC’s Act 13 webpage for more information.

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - June 15 to 21 - More Failed Shale Gas Well Plugs; Landslides; Venting Gas; Injection Well Issue?  [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - June 22 [PaEN]

-- DEP Hearing, Special Comment Period Notices For Projects In Jefferson (Solar), Lehigh (Warehouse), Lycoming (Gas Pipeline) and York (Air Permit) Counties  [PaEN] 

-- DEP Posted 53 Pages Of Permit-Related Notices In June 22 PA Bulletin  [PaEN]

Related Articles This Week:

-- DEP To Hold July 2 Virtual Hearing On PA General Energy Project To Construct 3.7 Miles Of Shale Gas, Water Pipelines Thru Exceptional Value, High Quality, Wild Trout Streams In Lycoming County  [PaEN]

-- IRRC Approves Final Revised PUC Regulations Strengthening Rules For Intrastate Hazardous Liquids Pipelines; Gas Pipelines Fined Over $71 Million, Have Worst Compliance Record Of Any Industry, Including Criminal Charges  [PaEN]

-- PUC: Act 13 Drilling Impact Fee Revenue Drops $100 Million From Last Year’s Record To $179.6 Million; Puts Hole In State, Local Budgets  [PaEN] 

-- PUC To Hold July 15 Prehearing Conference On Future Of Venango Water Company, Related Companies As Follow-Up To Conventional Oil Well Wastewater Spill In Venango County  [PaEN]

NewsClips:

-- PennLive: Trout Unlimited, Mid State Trail Assn. Unhappy With Proposed Route Of PA General Energy Shale Gas Pipelines Thru Lycoming County

-- Williamsport Sun: Mid State Trail Assn., Susquehanna Chapter Trout Unlimited Challenge PA General Energy Multiple Shale Gas Pipeline Plan In Northwestern Lycoming County

-- Marcellus Drilling News: Onerous New Regulations Approved For PA Liquids Pipelines, Landmen

-- Warren Times Guest Essay: Abandoned Conventional Oil & Gas Wells Still Pose A Threat - By Amanda Veazey, Geologist, CSR Services, LLC, Crawford County

-- Post-Gazette - Anya Litvak: Shale Gas Drilling Impact Fees Bring In $180 Million For 2023 On Lower Gas Price, Less Drilling

-- Observer-Reporter: Shale Gas Impact Fee Funds Plummet Due To Low Natural Gas Prices  

-- The Energy Age Blog: Act 13 Shale Gas Impact Fee Drops $100 Million From Last Year’s Record, Even Though Gas Production Increased In 2023

-- TribLive: Natural Gas Well Impact Fee Allocations Drop; But ‘Every Little Bit Helps’

-- Marcellus Shale Coalition: Shale Gas Impact Fee Returns $180 Million [$100 Million Less Than Last Year]; Natural Gas Prices Drop $1.8 Billion In 2023, [Down From International Price Spikes Of 2022]

-- TribLive: North Huntingdon Twp Could Get Nearly $7,000 For Gas Rights Under Township Land In Westmoreland County

-- Kleinman Center For Energy Policy Podcast: How Potential For Global LNG Gas Oversupply Could Affect The Competitiveness Of The US Industry

-- The Allegheny Front - Reid Frazier: CNX Plan To Turn Mine Methane Gas Into Jet Fuel A ‘Win-Win’ Or Carbon Accounting ‘Gimmick’?

-- WHYY: Former Employees Remember Philadelphia Refinery Explosion, 5 Years Later: ‘This Is How I’m Gonna Die’

-- BeaverCountian.com: Shell Petrochemical Plant’s Sirens Caused Alarm In Beaver County; Company Took Nearly A Month To Address Middle-of-the-Night Alarms 

-- Post-Gazette - Anya Litvak: Shell Petrochemical Plant Explains Nighttime Fire Alarms At Beaver County Plant, Warns Sirens Will Sound Later This Week 

-- KDKA: Shell Petrochemical Plant Holding Emergency Drill TODAY In Beaver County

-- The Center Square - Anthony Hennen: Will Creating Hydrogen Hubs In PA Get Us Away From Fossil Fuels? But How To Do It, And Whether It’s Possible Are Open Questions

-- CNHInews: Advocates Urge True Clean Energy Approach For Hydrogen, Others Pine For PA’s Natural Gas

-- Bloomberg: Cracks Appearing In LNG Gas Demand By China As Gas Supply Via Pipelines Grows

-- Reuters: Oil Companies Flare More Natural Gas, Defying Effort To Eliminate Practice  

-- Reuters: Fossil Fuel Use, Emissions Hit Records In 2023, Report Says

[Posted: June 18, 2024]  PA Environment Digest