Appalachian Basin

Marcellus Shale Industry Has Paid $1.2 Billion in Impact Fees Over Six Years

The Pennsylvania Public Utility Commission (PUC) released figures for the 2016 Impact Fee distribution this week, and yet again, it shows the Marcellus Shale industry is generating millions of dollars for Pennsylvania. This year’s total payment is $173 million, bringing the total paid since 2011 to $1.2 billion – the equivalent of a 9.16 percent effective natural gas tax, as Marcellus Shale Coalition (MSC) president Dave Spigelmyer explained it a statement:

“Pennsylvania’s unique tax on natural gas – called the impact fee – continues to be a policy solution that’s working as designed, directly benefitting communities in all 67 counties throughout the Commonwealth. Since 2011, Pennsylvania’s impact fee – which currently equates to a 9.16% effective natural gas tax  – has generated more than $1.2 billion in revenue supporting community programs, local infrastructure projects, as well as statewide environmental and conservation initiatives.

“This unique natural gas impact tax empowers county and municipal leaders by keeping revenues local for community projects.”

PUC explained in a press release how this year’s money will be distributed:

County and municipal governments directly affected by drilling will receive a total of $93,128,340 for the 2016 disbursement year. Additionally, $62,085,600 will be placed into the Marcellus Legacy Fund, which provides financial support for environmental, highway, water and sewer projects, rehabilitation of greenways and other projects throughout the state. Also, $18 million will be distributed to state agencies specified by the Act.” (emphasis added)

Impact Fee money is distributed in a way that ensures the counties and municipalities with the most wells receive the most funding. As Sen. Yaw explained in his press release,

“For the fifth year in a row, counties and local governments in my legislative district experiencing natural gas drilling are receiving needed financial support through Act 13 impact fee dollars. Bradford, Lycoming and Susquehanna counties ranked among the highest recipients of Act 13 revenues. I cannot remember a time when millions of dollars were sent back to our local governments without a long, involved grant process.”

Similarly in Southwestern Pennsylvania, the Observer-Reporter reported,

Washington County was the largest recipient of 2016 impact fee revenue, at $5.38 million. Greene County also was among the top recipients, netting $3.7 million.

“Three Greene County municipalities also were among the top gainers among local governments. Morris Township will receive $770,940; Center Township, $730,772; and Cumberland Township, $646,602.” (emphasis added)

This money can be used for a variety of needs within the community. In 2015, most county money was used on emergency preparedness and public safety, while municipalities used most of their money on public infrastructure construction, as can be seen in the breakdown of how monies were spent in 2015:

But counties with natural gas development are not the only counties that will receive funds, as Sen. Yaw explained,

“Since Union County has no drilling it does not qualify for a share of the Impact Fee revenue; however, it does qualify for $35,358 through the Marcellus Legacy Fund Disbursement.

“In addition to the revenue disbursement above, each county, including Union, will also be eligible for funding dedicated to the statewide share. Counties and municipalities will be able to apply for grants through the Environmental Stewardship Fund, for water and sewer projects through PennVEST and the H2O program and a variety of projects under the Commonwealth Finance Authority (CFA).” (emphasis added)

Whether it is through direct payments like the milestone $1 billion in royalties that Cabot Oil & Gas has paid to landowners in Susquehanna County or the Impact Fee, the Marcellus Shale industry continues to make positive contributions to Pennsylvania’s economy.

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