PA Environment Digest Blog: Allegheny Institute For Public Policy: Counites, Municipalities Need To ‘Begin Lowering Their Expectations’ On The Support From Shale Gas Industry Drilling Impact Fee

On September 19, the Pittsburgh-based Allegheny Institute for Public Policy published a policy brief on the steep decline in revenues from the Act 13 shale gas impact fees going to counties and municipalities.

“Revenues from Pennsylvania’s impact fee imposed on unconventional (i.e. fracked) gas wells set a new record in 2022, with collections of $278.9 million. Collections for 2023 fell 37 percent to $174.6 million from 2022.

“Pennsylvania’s natural gas industry has long been an important part of the state’s economy, dramatically more so since the advent of shale gas production.

“The impact fee was introduced to compensate state and local entities for the impact of drilling.

“Understandably, counties and municipalities hosting wells have received considerable benefits, while some counties and/or municipalities saw little to no benefits.

“Even so, since the passage of Act 13, impact fees have generated over $2.7 billion for local governments and state agencies.

“Allegheny County has directly received nearly $20 million, while its municipalities have received roughly $10.1 million in that time.

“As noted in Policy Brief Vol. 23, No. 22, variations in disbursements are influenced by impact fee collections year-to-year.

“The record-breaking and anomalous year of 2022 was driven almost entirely by a soaring Henry Hub price.

“The following year, the Henry Hub price and collections both dropped to their lowest points since 2020.

“Going forward, impact fee collections are expected to decline over time as wells age, production slows and the price of natural gas falls.

“Regulatory and environmental pressures from policymakers will likely further contribute to an air of uncertainty over the future of the industry (see Policy Brief Vol. 21, No. 25).”

Click Here to read the entire Policy Brief.

Resource Links - Impact Fee:

-- 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 [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]

Upcoming Event

-- September 24-- Center For Coalfield Justice Hosts Program In Washington County On Increasing Setbacks From Oil & Gas Infrastructure

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-- Homeowner Complaint Results In DEP Emergency Plugging Of A Penn Resources, Inc. Conventional Oil Well Leaking Gas, Oil, Wastewater In McKean County [PaEN]

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