Natural gas impact fees collected in 2020 at historic low

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Impact fee revenue collected in Pennsylvania from new Marcellus Shale gas wells was the lowest it’s been since the program began in 2011.

More than $146 million will be distributed from the 2020 reporting year. That’s down $54 million from the previous year, according to the Pennsylvania Public Utility Commission, which released last year’s Act 13 data on June 14.

Act 13 impact fees are collected on each new unconventional gas well drilled in the state. The fees are distributed to counties and municipalities with wells, as well as state agencies, to offset the impact of drilling. More than $2 billion has been collected since the program began 10 years ago.

The PUC said collections were down last year because the price of natural gas was low, about $2.08 per MMBtu compared with the 2019 price of $2.63 per MMBtu. Fewer new wells were drilled in 2020 than any year in the past decade.

Counties and municipal governments will receive a total of $71.4 million from the 2020 reporting year sometimes in July. About $23 million will go to state agencies, and $51 million will go to the Marcellus Legacy Fund, which provides financial support for environmental, highway, water and sewer projects across the state. 

Local impact

Washington County received the highest impact fee distribution, at $4.4 million. Susquehanna County was second, with $4 million. Bradford received $3.4 million. Greene received $3.2 million. Lycoming received $2.3 million. Tioga received $1.8 million, and Butler received $1.4 million.

Center Township, in Greene County, received the highest distribution amount for a municipality, at $755,839. The township had 260 wells drilled in 2020.

Municipalities and counties spend the bulk of their impact fee revenue on public infrastructure projects or putting it away in their capital reserve fund. 

EQT was the top producer in the state in 2020, drilling 1,800 wells. The company was followed by Range Resources, which drilled $1,388 wells. Chesapeake Appalachia drilled 977 wells, and Cabot Oil and Gas drilled 848 wells.

A full report on the 2020 impact fees can be found here.

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