Pa. shale impact fees surpass estimates
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HARRISBURG -- Pennsylvania drillers paid $197.6 million in the first round of Marcellus Shale impact fees, exceeding legislative estimates even as officials seek to resolve some disputed payments.
Figures released Monday by the state Public Utility Commission break down those collections by operator, showing that most paid by last week's deadline.
According to the agency's calculations, 4,453 wells are liable for the fee this year, which is assessed on those drilled through December 2011.
That figure includes 4,034 horizontal wells, which are charged according to a larger fee scale starting at $50,000. Another 419 vertical wells, which tend to be shallower and less productive, were charged $10,000 each.
Combined, their payments surpassed the $180 million projected for the fee's first round of collections, and could rise to nearly $206 million in the final tally.
Those involved in crafting the fee, which was created as an alternative to the natural gas severance tax that failed to become law under Democratic Gov. Ed Rendell, said they hit their mark.
"It's been a success," said Senate President Pro Tem Joe Scarnati, the Jefferson County Republican who first floated the idea of a per-well fee in late 2010. "The impact fee has not had a negative impact on the industry."
Democrats had sought a more robust assessment on drillers, citing impacts on local communities that don't share in the taxes that operators already paid to state government.
Still, Senate Minority Leader Jay Costa, D-Forest Hills, said the figures are "a good sign."
"It's unfortunate it took us awhile to get there, but we hope it continues to grow," he said.
Republican Gov. Tom Corbett opposed a severance tax, which other states assess based on formulas involving the price and amount of gas produced. However, he became supportive of a fee that will distribute most funds to local governments.
"As a result of Gov. Corbett's leadership, and in partnership with the General Assembly, local communities will see nearly $200 million in new revenue made available to them this fall," his office said in a statement.
Oklahoma-based Chesapeake Energy paid the largest amount, forking over nearly $31 million for 624 wells. Canadian oil and gas company Talisman Energy was second with a $26.4 million payment on 540 wells, followed by Texas-based Range Resources' $23.7 million for 475 wells.
The money collected will be distributed by Dec. 1, with about 60 percent, or $110 million, going to counties and municipalities in the drilling region. The remainder will go toward environmental projects, incentives for natural gas use, housing assistance and other statewide programs.
Local officials will need to wait a little longer, though, before they find out exactly how much their county and town will receive.
The PUC figures didn't include information on the location of each well, which is used to calculate each town's share. The lack of detail is due in part to ongoing disputes between the PUC and operators on whether 172 wells should be charged.
Six companies are contesting their payments, PUC spokeswoman Jennifer Kocher said. The agency's totals show about $2 million in non-payments because of those disputes.
Another $6 million in payments were delinquent, including $3 million due from Carrizo Oil & Gas LLC and its regional subsidiary. Company spokesman Richard Hunter said its check was mailed on Thursday.
The impact fee was created in the new law approved in February, known as Act 13. The law also overhauled environmental rules and outlined what towns can and cannot control in regard to gas drilling.
A Commonwealth Court panel overturned a section of the law related to zoning rights. The lawsuit that led to the ruling, which is pending appeal in state Supreme Court, did not challenge the impact fee portion.
The state's largest drilling trade group, the Marcellus Shale Coalition, said fee payments announced Monday show that the industry is providing revenues to cash-strapped governments. It also noted that a key provision it sought to have enacted with the fee remains in limbo.
"While these figures are indeed staggering by any measure, it also serves as a stark reminder that we must ensure that we have common-sense policies in place, especially local zoning uniformity at the center of Act 13, which encourage economic growth, job creation and additional revenue," said coalition president Kathryn Klaber in a statement.
First Published September 11, 2012 12:17 am