Appalachian Basin

Pennsylvania Sees Record-Breaking Impact Fee Disbursements For 2022

Pennsylvania’s natural gas impact fee set a new record this year generating $279 Million across all of the Commonwealth’s 67 counties, according to the Public Utility Commission’s most recent report. This represents a 19 percent increase year-over-year.

All told, the impact fee has generated more than $2.5 billion since 2012, and supported county, municipal, and state programs ranging from infrastructure improvements to environmental conservation.

As Marcellus Shale Coalition President David Callahan said:

“Policymakers should pay attention: Pennsylvania’s unique approach to a severance tax allows all four corners to benefit from the natural gas produced here. It’s a structure no other energy-producing state uses and has created a valuable revenue stream municipalities, state agencies and environmental programs rely on.” (emphasis added)

And American Petroleum Institute Pennsylvania Executive Director Stephanie Catarino Wissman explained:

“Pennsylvania-produced natural gas benefits families and businesses with access to abundant, reliable energy while injecting millions of dollars annually into environmental programs, infrastructure upgrades, public parks and public safety in both producing and non-producing regions alike. Our industry has long invested and operated in the Keystone State with the safety, health and economic growth of local communities in mind.”

Additionally, the Pennsylvania Chamber of Business and Industry also responded to the new numbers:

The natural gas industry, directly and indirectly, supports nearly half a million family-sustaining jobs. And, as today’s impact fee announcement makes clear, the natural gas industry generates hundreds of millions of dollars in annual revenue to support our local governments, environment, infrastructure, and public safety.” (emphasis added)

While the impact fee revenue benefits all 67 of Pennsylvania’s counties, the majority of the money is distributed in the communities where this development is occurring, with the top seven shale producing counties receiving roughly 16 percent ($43.5 million) of the total revenue and individual municipalities also receiving substantial amounts:

As State Rep. Clint Owlett, whose district includes two top natural gas production counties – Bradford and Tioga – explained:

“This is great news for our rural communities. The impact fee continues to play a vital role in helping our communities address the impacts of drilling while we also benefit from the jobs the industry creates.”

And as State Sen. Gene Yaw, whose district includes Lycoming, Sullivan and Union counties in addition to Bradford and Tioga, explained, local and country distribution only accounts for about two-thirds of the revenue generated. The remaining funds go to critical statewide services:

“The Impact Fee not only funds critical projects locally, but also a wide variety of important environmental projects in communities throughout the state. The natural gas industry has been a great partner in creating new jobs and opportunities in our communities, and today’s announcement is another reminder of the importance of this industry in Pennsylvania.”

This revenue is used to support environmental programs, state agency oversight and critical first response initiatives. The details for the 2022 Pennsylvania government programs are as follows:

  • Marcellus Legacy Fund: $103,641,907
  • County Conservation Districts, State Conservation Commission: $9,276,671
  • Pennsylvania Department of Environmental Protection: $6,000,000
  • Fish & Boat Commission: $1,000,000
  • Pennsylvania Department of Transportation: $1,000,000 (rail freight assistance)
  • Pennsylvania Public Utility Commission: $1,000,000
  • Office of the State Fire Commissioner: $750,000
  • Pennsylvania Emergency Management Agency: $750,000

Bottom Line: The Marcellus Impact Fee continues to be an important source of revenue for Pennsylvania. And while the majority of revenue is distributed back into the communities with the most impact from shale development – as the name implies – it benefits the entire Commonwealth.

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