PUC: Act 13 Drilling Impact Fee Revenue Drops $100 Million From Last Year’s Record
Even Though Gas Production Increased in 2023
By David E. Hess | PA Environment Digest Blog
June 18, 2024 | Full story
On June 18, the Public Utility Commission reported calendar year 2023 revenue from the Act 13 drilling impact fee dropped $99.2 million (36-percent) to $179,634,750 from last year’s record $278,881,450 assessed on unconventional shale gas wells even though natural gas production went up in 2023.
The more numerous conventional oil and gas well owners pay no fee.
County and municipal governments directly affected by drilling will receive a total of $100,302,825 for the 2023 reporting year.
Additionally, $63,791,090 will be transferred to 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, $15,540,804 will be distributed to state agencies, as specified by Act 13.
With this year’s distribution, the PUC has collected and distributed over $2.7 billion to Pennsylvania communities.
The Act 13 fee is a per well fee, not based on natural gas production which increased from 7,441 billion cubic feet in 2022 to 7,520 billion cubic feet in 2023.
This year’s distribution is almost $100 million less than last year.
This year’s distribution is approximately $100 million less than last year, driven primarily by the average price of natural gas in 2023 ($2.74 per MMBtu) versus the average price in 2022 ($6.64 per MMBtu) which generated a lesser impact fee payment for each well in 2023 – along with the addition of only 423 new wells during 2023.
The PUC has forwarded the information to the Department of Treasury and expects payments to be distributed in early July.
Extensive details regarding the impact fee distribution are available online, including specifics on funds collected and distributed for each year since 2011.
Visitors can search and download statistics such as distributions to individual municipalities or counties; allocation and usage of those funds, based on reports submitted by various municipalities; eligible wells per county/municipality; and payments by producers.
The PUC is responsible for implementing the collection and distribution of an unconventional gas well fee (also called an Impact Fee), established by the Unconventional Gas Well Impact Fee Act and signed into law as Act 13 of 2012.
Visit the PUC’s Act 13 webpage for more information.
[Posted: June 18, 2024] PA Environment Digest
Gross inequities
Examples of gross inequities between neighboring townships in the Municipality Act 13 Impact Fee Distributions for 2023:
ZERO UNCONVENTIONAL WELLS:
59608-PETERS, a Township in Washington County
Total distribution for year 2023: $349,267.92
MULTIPLE UNCONVENTIONAL WELLS:
78432-UNION, a Township in Washington County
Total distribution for year 2023: $121,859.51
Peters Twp gets $227,408.41 more than Union Twp, yet has no wells.
55712-NOTTINGHAM, a Township in Washington County
Total distribution for year 2023: $186,268.53
Peters Twp gets 162,999.39 more than Nottingham Twp, yet has no wells.
11800-CECIL, a Township in Washington County
Total distribution for year 2023: $317,453.25
Peters Twp gets $31,814.67 more than Cecil Twp, yet has no wells.
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