After years of deliberation on the issue, Pennsylvania legislators passed a bill overhauling the state’s natural gas drilling laws on February 8, 2012.
While most of the legislation has already gone into effect, Commonwealth Court has thrown out a section restricting local governments’ ability to zone and regulate natural gas drilling. The Corbett Administration has appealed the decision to the Supreme Court of Pennsylvania.
The law places an impact fee on every well drilling for gas in the Marcellus Shale formation. The levy will change from year to year based on natural gas prices and the Consumer Price Index, but in 2012, drillers paid $45,000 per-well. (Smaller, vertical wells will paid $9,000.)
The impact fee brought in $204 million to Pennsylvania for 2011, and $202 million during 2012. There was less money in 2012 because the fees are tied to the price of natural gas, which declined by a third.
Sixty percent of the revenue stays at the local level, going to counties and municipalities hosting wells. The rest goes to various state agencies involved in regulating drilling and to the Marcellus Legacy Fund– which gets spread out around the state for environmental and infrastructure projects.
These are the top five counties receiving the most impact fee money in 2012 :
- Bradford $6.9 million
- Washington $4.6 million
- Tioga $4.3 million
- Lycoming $4.3 million
- Susquehanna $4.1 million
RESTRICTING LOCAL POWER
In addition to setting a fee, the legislation restricts municipal zoning of drilling operations. Townships and municipalities are required to allow drill rigs in all types of zones, except for densely-populated residential areas. It sets state standards for the minimum distance between wells and streams, schools, buildings and water sources. If a local government passes ordinances and regulations that go beyond the new state standards, the Public Utility Commission will have the power to bar the municipality from receiving any impact fee money.