Pennsylvania’s unconventional natural gas industry generated nearly $244 million in impact fee revenue for the 2025 reporting year, marking one of the program’s strongest years and pushing total collections since inception past $3.12 billion, according to new distribution figures released June 15 by the Pennsylvania Public Utility Commission (PUC).
“Pennsylvania’s natural gas industry continues to play an important role in supporting our economy, strengthening our energy future, and providing tangible benefits to communities across the Commonwealth,” said PUC Chairman Steve DeFrank. “The impact fee ensures that local governments and statewide programs share directly in those benefits, delivering funding for infrastructure, environmental improvements, public safety, and other priorities that improve quality of life for Pennsylvanians.”
The roughly $244 million in impact fees collected from producers will be distributed to local governments, state agencies, and statewide programs under Act 13 of 2012, which established the unconventional gas well fee, according to the PUC, which says the latest distribution is approximately $79 million higher than last year’s total, driven largely by increased drilling activity and higher natural gas prices.
Under Act 13, impact fees are calculated based on the average annual price of natural gas on the New York Mercantile Exchange (NYMEX) and the age of each well. The average annual natural gas price for 2025 reached $3.43 per MMBtu, up from $2.27 in 2024.
Drilling activity also accelerated. Based on data from the Pennsylvania Department of Environmental Protection, 446 wells were drilled in 2025, an increase of 137 from 2024 and the highest annual total since 2022.
The PUC separately reported 444 new wells spud during the year. Because newly drilled “Year One” wells carry the highest impact fee assessment, increases in new development significantly influence annual collections.
Of the 2025 distribution, more than $133.8 million will go to counties and municipalities with drilling activity, while more than $20.9 million will be directed to state agencies.
Another nearly $89.2 million will flow to the Marcellus Legacy Fund, which supports environmental programs, highway, water and sewer projects, greenways, and other initiatives across all 67 Pennsylvania counties, including those without active drilling, the PUC said.
At the same time, 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.
American Petroleum Institute Pennsylvania highlighted the broader economic role of the impact fee program.
“Natural gas continues to deliver meaningful benefits for Pennsylvania and helps drive our economy,” said American Petroleum Institute Pennsylvania Executive Director Stephanie Catarino Wissman. “Year after year, these revenues help fund important local projects in all 67 counties — from road and bridge improvements to emergency services — demonstrating how this unique program is working for Pennsylvanians.”
Wissman added that natural gas development continues to produce a consistent stream of funding that’s reinvested into communities in every corner of the commonwealth.
“Pennsylvania natural gas helps power our economy, support tens of thousands of jobs, and provide affordable, reliable energy for American families and businesses, while helping to reduce carbon dioxide emissions in the power sector,” said Wissman. “This underscores how strong domestic production in states like Pennsylvania helps protect consumers and strengthen energy security.”
Several of Pennsylvania’s competitor states for energy production, such as Texas, do not levy a personal and corporate income tax, notes the Marcellus Shale Coalition. Pennsylvania is also the only state in the nation which annually increases its tax rate on shale gas by a rate of inflation; this year’s tax rate increased by 3.8% over 2025.
“From significant tax revenue and family sustaining jobs, to lower energy costs for consumers, Pennsylvania’s natural gas industry continues to provide measurable benefits to our Commonwealth,” said Jim Welty, president of the Marcellus Shale Coalition. “Pennsylvania’s approach to distributing this tax is transparent and delivers revenue back into communities in all 67 counties. Everyone should appreciate the significant and lasting benefits the Impact Fee has provided to Pennsylvania.”
The PUC administers the collection and distribution of impact fees on unconventional gas wells to support infrastructure and environmental improvements associated with natural gas development. Additional county-level and historical distribution data are available through the agency’s Act 13 reporting resources.
Extensive information about this year’s impact fees, including county- and municipality-level distributions, producer payments, and historical data, is available on the PUC’s Act 13 website.