Natural gas drilling impact fees generate nearly $2B in revenue since 2012

The Pennsylvania Public Utilities Commission (PUC) released data this week showing that the Commonwealth’s natural gas impact tax has generated nearly $2 billion in new revenues since 2012, with more than $200 million reported in 2019.

“Generating nearly $2 billion in less than a decade, Pennsylvania’s tax on natural gas development is a winning policy that makes community investments and key statewide environmental protection and conservation programs possible,” Marcellus Shale Coalition President David Spigelmyer said. “Impact tax revenues directly benefit all 67 Pennsylvania counties, regardless of drilling activity, funding new roads, parks, bridges, first responders, flood control and farmland preservation, among others.”

Spigelmyer stated that policymakers should closely recognize that the impact tax structure ensures all Pennsylvania residents share in the benefits of responsible shale development.

This year’s impact fee distribution is approximately $42.6 million lower than last year, driven primarily by the average price of natural gas in 2019 ($2.63 per 1 million British thermal units) versus the average price in 2018 ($3.09 per MMBtu) which caused a lower impact fee payment for each well in 2019, according to the PUC.

API-PA Executive Director Stephanie Catarino Wissman said the PUC report highlighted the positive impact natural gas development has on the state.

“The Public Utility Commission report shows that, even in current market conditions, natural gas development continues to supply essential revenues and fuel to power recovery efforts as Pennsylvanians transition to a ‘new normal,’” Catarino Wissman said. “As the Commonwealth recovers, natural gas companies will provide the foundational energy to allow people to return to work, visit their families, eat at restaurants, and otherwise continue on with their lives. We should support legislative policies that balance what is working to support the commonwealth during economic recovery and build on opportunities for economic growth and job creation.”

According to the PUC report, distribution of the 2019 revenues collected included $109 million distributed among county and municipal governments directly affected by drilling, and $18 million will be distributed to state agencies as specified by Act 13 of 2012. Additionally, $72 million will be allocated 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.

The PUC report showed that Washington County will receive the largest disbursement for 2019 at $6.6 million, while Center Township will be the municipality receiving the most revenue at $1.1 million.

Range Resources Appalachia LLC paid the most in impact fees at $26.5 million, followed by EQT Production Co. at $21.3 million, and Cabot Oil & Gas Corp. at $16.9 million.