Pa. municipalities to see 20% less in shale gas payouts, following last year's price drop

June 18, 2020
Pittsburgh Post-Gazette

Because of last year’s lowered gas prices, Pennsylvania’s payout from impact fees on natural gas producers will be substantially lower this year, the state Public Utility Commission said Wednesday.

This year’s collected fees clock in at just over $200 million, more than 20% lower than last year’s record total of $252 million.

The PUC said the drop was “driven primarily” by lower average gas prices.

Last year’s average price for natural gas sat at $2.63 per million British thermal units on the New York Mercantile Exchange, 45 cents lower than 2018’s average and the lowest in three years.

Of the $200 million collected, $109 million will go to county and municipal governments that have shale wells, $18 million will go to state agencies and $72 million will go to the Marcellus Legacy Fund, which pays for in-state environmental, highway and sewer projects.

After this year’s distribution, the PUC will have collected and distributed over $1.9 billion to Pennsylvania communities since 2012, when the state began assessing per-well fees on shale gas drilling companies.

The distributions are meant to compensate Pennsylvania communities for the gas industry’s effect on the environment and public infrastructure.

The state commission expects the checks to be distributed to local governments by early July.

This year’s top receiving counties will be Washington, Susquehanna, Bradford and Greene — each set to garner between $4.6 million and $6.6 million. All four counties have over 1,300 wells inside their borders, as reported by producers.

Last year, the top four receiving counties were the same, but they got between $5.9 million and $8.2 million from fee distribution. 

The top-paying producers were Range Resources Appalachia LLC at $26 million and EQT Production Co. at $21 million.

The Robinson-based Marcellus Shale Coalition, a drilling industry trade organization, said in a statement that Pennsylvania's natural gas impact fee is a “winning policy that makes community investments and key statewide environmental protection and conservation programs possible.

“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,” the statement said.