Pennsylvania counties look to Marcellus shale impact fee for funding

**** Update**** There is an addition to this story at the bottom. Bradford County didn’t respond in time for their comments to be added to the print addition but we included them in the online edition here.****

SALEM, Ohio — Now that Pennsylvania Gov. Tom Corbett has signed the Marcellus shale impact fee legislation, counties are getting ready for the next step, but not everyone is happy with the potential hand-out.

Voting procedure

Each county’s government has to vote on the legislation in order to obtain the funds. It could take a few weeks, however, before every county is able to take a vote because of the procedure needed to take a vote in Pennsylvania, and most county solicitors are taking a look at the legislation before the vote.

The bill will enact a impact fee on every well drilling for gas, retroactive to the first well drilled in the Marcellus formation.

Fee per well

In 2012, the drillers will pay $50,000 per well. Smaller vertical wells will be assessed $10,000. Legislators estimate the fee will generate around $180 million.

The fee will be different from year to year because it will be based on natural gas prices and the Consumer Price Index.

According to the legislation, 60 percent of the money generated will stay at the local level, going to counties and municipalities with wells. The remainder of the funds will go to various state agencies.

Snapshot of Pa. counties

Greene County Commissioner Chairman Pam Snyder said she can’t speak for the other commissioners, but she is voting to pass the ordinance.

Greene County estimates it will receive $3 million when the legislation is passed. The money will be used for infrastructure repairs and other needs the county is experiencing as a result of the shale industry.

Washington

Washington County Commissioner Chairman Larry Maggi said he is voting for it and expects the other commissioners to pass it as well. Washington County expects to receive between $3 and $5 million from the legislation.

Maggi said the funds will be used to repair bridges, water and sewer lines and pay for the county’s conservation district.

“We’re being impacted now,” said Maggi. “The gas companies have been good stewards of the land, but we do need funding for the affected areas.”

Beaver and Lawrence

Officials in both Beaver and Lawrence counties expect to pass the legislation.

Beaver County Assistant Solicitor Andrea Cantelmi said the funding is needed in the county, but she is quick to point out that the shale drilling is in the infancy stages in the county. She expects some of the money to be used to repair bridges.

Butler

Butler County Commissioner Chairman William L. McCarrier estimates Butler County will receive between $3 and $5 million, but acknowledges a lot of factors will determine the final amount. He hopes the funding will replace what the governor cut from the state budget.

“There are always pros and cons to legislation. It’s probably as good as we can get at this point,” McCarrier said.

He said his concern is that the fee could drive the shale business out of the state.

Robinson Township, Pa.

In Robinson Township in Allegheny County, township supervisors are waiting to join with others to challenge the legislation.

Brian Coppola, Robinson Twp. Supervisor, said shale drilling began in 2007 and it not letting up anytime soon. He quickly points out that the township is not opposed to the impact fee itself, but other parts of the legislation.

“We are not opposed to the impact fee. The fee is designed to get the attention of the press and the public and away from what is going on in the gas industry in Pennsylvania,” said Coppola.

He said the bill has taken surface rights away from everyone in Pennsylvania. He said it has taken zoning away and the township’s ability to fight for landowners’ rights.

“We’re all pro drilling, but we have to protect our surface rights,” said Coppola. He said the Robinson Township trustees wanted common place legislation but the final result signed by the governor is none of that.

Coppola gave some examples of what was taken away in the legislation.

• 500 feet setback between home and gas well. The legislation mandates that township supervisors cannot zone against this. The legislation gives a mandatory waiver, meaning there is nothing that can be done.

“The wells can be 50 feet away from your house under this legislation,” said Coppola.

• Compressor stations. There are no rules mandating where compressor stations can now be built. The township cannot zone where they can be placed.

• Density requirements. Coppola said gas wells can be placed at the industry’s whim. There are no rules as to where or how many wells can placed in a location.

“We were just looking for good planned development and that didn’t happen in this legislation,” said Coppola.

Coppola said the biggest problem with the bill is that it takes the rules away at the local level.

“This bill is a big giveaway to the gas industry. It’s not going to help Pennsylvanians in the long run.”

• Seismic testing. Coppola said the township had an ordinance that allowed seismic testing but regulated who could do it, where it could be completed and a bond that went with it.

Seismic testing is now allowed in all areas and it has no regulation, under the new legislation.

He said he expects Robinson Township to join with other municipalities in the state to challenge the bill. He is not sure what the next step will be, but said phone calls are coming in every day since the bill was signed from other municipalities against the legislation.

“Four years ago I said ‘drill baby drill.’ Now I’m saying ‘Oh no. What did we do.’”

***Update:***
Bradford County commissioner Doug McLinko responded to the Farm and Dairy request for their opinion on the Marcellus shale impact fee.

McLinko said he is adamantly opposed to the fee and will vote against it but the reasons why may surprise everyone.

Bradford County is where the Marcellus shale boom began about three years ago. He said at the high point in 2010, there were 40 drilling rigs in the county. Today, there are 1,098 wells in it and over $4,000,000 to the economy.

“Our farms have been saved. When we had a terrible flood this year, those gas companies brought in companies with equipment and helped us clean it up and never gave it a thought,” said McLinko.

McLinko’s problem with the impact fee is that it is going to stop the industry from giving to the community like it has in the past.

He said he believes the impact fee is adding insult to injury while the price of natural gas is low.

McLinko said the development of roadways, the charitable giving, economic growth, farms that have been saved and signing bonuses have helped to keep Bradford County and its residents afloat while the rest of the country’s economy plummeted.

“We have 1,098 wells and to have the problems we don’t have, they (gas companies) should be commended,” McLinko said.

He said the gas industry has brought something for everyone in Bradford County since the boom began and that should be remembered before people start putting their hands out for money.

“Why would you want to damage the prosperity they have brought to our county,” said McLinko.

*** Find out if this type of fee could be a possibility in Ohio.***

About the Author

Kristy Foster Seachrist lives in Columbiana County raising sheep and horses. She earned her degree from Youngstown State University and has worked in both print and broadcast journalism. You can follow her on Twitter at http://twitter.com/fosterk96. More Stories by Kristy Foster Seachrist

One Comment

  1. Marcellus Shale says:

    Washington County’s Maggi said, “The gas companies have been good stewards of the land.” Guess he forgets two spills within 5-months of each other in Washington County, the first spill and fish kill was in the county park! (Many more incidents after those) Oh that’s right, he’s running for Congress and may need political contributions from Range Resources and other drillers. Same old political ways that got us the governor and legislature we have now… vote them OUT!

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