Pennsylvania’s natural gas impact fee collected from producers for the 2024 reporting year generated $164.5 million in 2024, pushing the 14-year total past $3 billion, the Pennsylvania Public Utility Commission (PUC) said Monday.
The impact fee, established under Act 13 in 2012, serves as the state’s tax on natural gas development. It has since provided a consistent revenue stream to all 67 counties in the commonwealth, regardless of whether they host drilling activity.
“The impact fee continues to provide significant and sustained support for Pennsylvania communities — especially those directly affected by natural gas development,” said PUC Chairman Stephen DeFrank. “More than a decade into Act 13, this funding continues to bolster local infrastructure, environmental projects, and public services across the commonwealth.”
This year’s distribution brings the cumulative total of impact fees collected and distributed since 2012 to more than $2.88 billion, according to the commission.
“Natural gas development delivers real, measurable benefits for Pennsylvania communities — driving job creation, powering economic growth and strengthening energy security,” said Jim Welty, president of the Marcellus Shale Coalition. “Beyond these core advantages, this industry continues to invest in projects that improve quality of life across the commonwealth.
“The impact fee alone has generated nearly $3 billion since 2012 — a clear, bipartisan policy success that reinforces the broad, lasting value of Pennsylvania’s natural gas resources,” Welty added.
The funds support a wide range of municipal needs, including infrastructure upgrades, emergency services, economic development initiatives, and environmental projects.
David Sanko, executive director of the Pennsylvania State Association of Township Supervisors, said the natural gas impact fee provides critical financial support to communities across Pennsylvania, which developed a first-in-the-nation plan to fund communities directly rather than passing money to the state capital first and hoping it made its way to impacted communities.
“These funds enable townships and other municipalities to invest in key priorities such as water and sewer upgrades, road and bridge improvements, public safety, and affordable housing initiatives,” said Sanko.
According to a Marcellus Shale Coalition economic study, the natural gas sector remains a major economic engine for the state. In 2022, it contributed more than $6 billion in tax revenues and supported more than 120,000 jobs. Average wages in the sector approached $100,000, more than double the state median, the coalition reported.
The industry also continues to deliver consumer savings, according to an analysis of PUC data by the Marcellus Shale Coalition that found that households and businesses across Pennsylvania saved nearly $10 billion in energy costs last year compared to 2008 prices.
While every county receives a portion of the impact fee revenues, areas with active drilling receive more and the amount collected each year varies depending on the number and age of wells and prevailing market prices.
In addition to local governments, several state agencies benefit directly from the fee, including the Pennsylvania Department of Environmental Protection, the Fire Commissioner, and the Pennsylvania Emergency Management Agency. The funds support initiatives such as the Pennsylvania Housing Affordability & Rehabilitation Enhancement (PHARE) fund, the Greenways, Trails, and Recreation Program, and the Watershed Restoration Protection Program.
The PUC issued a breakdown of the 2024 impact fee distribution: $86.5 million will go to counties and municipalities directly affected by drilling activity; $57.7 million will go to the Marcellus Legacy Fund, which supports statewide environmental initiatives, greenways, and infrastructure projects; and $20.4 million goes to state agencies, as directed by Act 13.
The PUC said it has submitted this year’s distribution data to the Pennsylvania Treasury, which is expected to begin issuing payments in early July.
At the same time, the PUC said that the 2024 distribution is approximately $15 million lower than last year’s total, due primarily to a decrease in new wells spud in 2024 (314), compared to 421 in 2023, and a similar average natural gas price in 2024 ($2.74 per MMBtu), which remained nearly unchanged from 2023.
Because new wells are subject to the highest impact fee, the PUC noted that fluctuations in their number can significantly affect annual collections.