Pennsylvania Assembly Passes Marcellus Shale Bill

The House and Senate of Pennsylvania's General Assembly on Wednesday passed a bill that would authorize Pennsylvania counties to adopt a fee for Marcellus, Utica and other shale resource wells.

House Bill 1950 includes 24 of the legislative recommendations offered by the Marcellus Shale Advisory Commission, whose work Pennsylvania Gov. Tom Corbett outlined in his Marcellus shale proposal.

Pennsylvania Assembly Passes Marcellus Shale Bill

Under that proposal, a $40,000 fee per well would be imposed during a well's first year; a $30,000 fee would be required in the second year, then $20,000 in the third year. A $10,000 fee would be imposed for years four through 10. No fee will be assessed if well production drops below 90 Mcf/d.

The fees are payable to the county by March 1 of each year. A county may provide for a fee credit of up to 30 percent for approved investments in natural gas infrastructure, such as gas fueling infrastructure or public transit vehicles.

The proposal calls for 25 percent of revenues from these fees to be allocated to the state, while 75 percent will be retained locally.

Seventy percent of the revenue allocated to the state will be used to fund road and bridge maintenance and repair and other infrastructure improvements within counties where unconventional gas development is taking place.

The breakdown of revenue distributed to the state includes:

  • 10.5 percent to the Department of Environmental Protection's restricted account for the plugging of abandoned and orphaned oil and gas legacy wells and the administration and enforcement of oil and gas program and other permits related to gas development
  • 7.5 percent to the Public Utility Commission for enhancement, inspection and enforcement of pipeline standards
  • 3.75 percent to the Department of Health for investigating health complaints associated with shale development and conducting health, public outreach and education
  • 3.75 for developing and sustaining training programs for first responders and acquiring emergency response equipment
  • 4.5 percent for emergency response planning, training and coordination associated with shale gas development

Corbett had previously said his proposal would help create thousands of jobs for state residents, enhance protection of Pennsylvania's natural resources and move the state towards energy independence.

"This legislation reaffirms our strong commitment to safe and responsible natural gas development here in Pennsylvania," the governor said in a statement on Wednesday.

Corbett will have 10 days to sign the bill into law once it reaches his desk.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at


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krys | Feb. 15, 2012
ha! You guys are too funny! If there is one thing weve learned here in the Rockies, those little fees are less than a day or two of revenue generated from those wells. Your Marcellus is one of the largest shale gas deposits in the world. Those drillers arent goin anywhere. Oh, and welcome to OUR world. You Easterners have been ignoring our problems in the west for decades as long as our fossil fuels feed your energy needs. How amusing that now that its in YOUR backyard, the impacts of energy extraction are suddenly important. Welcome to the club boys!

Dougas Shields | Feb. 11, 2012
And, what about the provisions in Chapter 33? While the legislation deals with fee calculation, collection and distribution, you seem to have given the short shrift to significant preemption provisions of local zoning authority. PUC oversight of local legislative bodies and the like. These are significant departures from long standing public policy. These preemptions are exclusive to matters on Oil & Gas industry. All else, government, institutions, corporations, homes etc. are all bound by local land use standards. Do you see inherent conflicts in this? Any thoughts on that? By the way (to a comment below) they all levy taxes. and Texas does not allow for open frack ponds... Dont let the facts get in the way of a rant eh?

Randy Pochel | Feb. 10, 2012
I couldn't help but notice that although all these revenues go to state organizations who would want to shut oil and gas down, A large part goes to the local EPA.

john weaver | Feb. 10, 2012
Tax the oil companies, kill the goose that layed the golden egg. Its not enough that jobs have been created, the state has created another welfare system

Wyodrill | Feb. 10, 2012
Wake up and smell the coffee! Companies are already pulling rigs out of the state. Weather its from this legislation when it was pending or just low gas prices, blood sucking, something for nothing is the kind of philosophy that stifles activity, revenue and production.

Bill Core | Feb. 10, 2012
This greed will slow drilling, and change drillers plans, with the low gas prices at the well head and this new penalty. Penn will be looked at differently. Perhaps send drillers to other states. My company has hired 8 Penn residents. It appears we will not need anymore.

Josh Bullard | Feb. 10, 2012
The people and government of Pennsylvania need to realize that a taxes like this will do nothing but drive the oil and gas industry out of the state. The people of the state need to realize that this can provide many jobs for them but not a handout. As a coil tubing supervisor we were looked down apon for being in there state and for our work ethic and drive to fuel our household income and well being of our family. In my opinion the people of Pennsylvania will never benefit from this boom as long as they keep there "union" way of thinking. They need to look at the states of Texas, Oklahoma and Louisiana and see how working with the O&G companies can benefit everyone all the around the board.

Mr. H. | Feb. 10, 2012
Im curious- whats industrys take on this? PIOGA website has nothing.

jake | Feb. 10, 2012
Considering the price of natural gas now, this bill will stunt development and make it difficult for local operators to compete.. I don't know if people are aware, but gas is at a 10 year low..

John | Feb. 9, 2012
They need to pass a law like they have offshore to assure the people and environment are safe to imposes strick fines and penalties for every day until the last day an inspection was done. This would also create alot more jobs as well as hold and make them abide by guidelines.

David Deano | Feb. 9, 2012
Why dont you call it what it really is. Another Tax on Marcellus Well production. How is that going to help anything?


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