PA House Oil and Gas Caucus reject 150 percent fee increase for unconventional well permits

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Thirty-two members of the Pennsylvania House Oil and Gas Caucus recently expressed concern about a proposed rulemaking changes that would increase the application fee for an unconventional well permit by approximately 150 percent.

The congressmen sent a letter to the Pennsylvania Department of Environmental Protection (DEP) Secretary and Environmental Quality Board Chairman Patrick McDonnell regarding the proposal.

The change would increase the application fee from the current $5,000 to $12,500.

“We recognize the need for the department to have adequate staff and resources necessary to meet its statutory obligations,” the letter said. “However, the proposed permit fee increase is unwarranted and is unsupported by the statutory authority afforded to the department. We strongly urge the department to reconsider this proposal and instead utilize General Fund dollars already available to the agency to help support the oil and gas program.”

The representatives also encouraged DEP to use the $6 million impact fee allocation “as intended by the General Assembly.”

DEP has called the fee increase a status quo increase, which means it would not provide any additional efficiencies or improvement to review times. The caucus members noted that the average review time for an unconventional well permit last year was approximately 110 days.

“It is inconceivable that a permit fee increase of 150 percent, totaling nearly $15 million in new revenue annually, will merely maintain a status quo that currently lags behind other states with which we are competing for capital investment and job creation,” the representatives wrote.

The letter argues that the fee increase exceeds DEP’s statutory authority because of the disproportionate share of funding responsibility on the unconventional gas sector and would harm Pennsylvania’s competitiveness with other shale-producing states.