Pennsylvania counties seek to keep floating impact fee on shale wells, as Wolf wants cap

EnergyAssociated Press

An organization of Pennsylvania's county commissioners is lining up against Gov. Tom Wolf's proposal to replace a fee on Marcellus Shale natural gas wells with a flat annual payment to the same recipients, primarily governments where wells are hosted.

Keeping the three-year-old impact fee is a top priority of the County Commissioners Association of Pennsylvania, its executive director, Doug Hill, said Monday during the group's annual spring conference.

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Wolf was asked about his proposal during the gathering at a downtown Harrisburg hotel. The $225 million annual payment he is proposing would allow public schools to benefit from the new money that is gathered from the severance tax he wants to impose on the industry.

The majority of the existing impact fee revenue goes to the local governments where the Marcellus Shale wells are drilled. But Wolf said that directing revenue from a bigger severance tax to public schools around the state would give more Pennsylvanians a stake in the industry. He also referred to part of his proposal to use some of the money from the severance tax to help extend natural gas pipelines.

"We want it to work for Pennsylvania and Pennsylvania's economy, not for the economy of Texas or Louisiana or someplace else," Wolf said. "So, to do that, we need to make sure all Pennsylvanians feel partnership, a sense of ownership in this industry and I think a modest severance tax, which I'm proposing, would do that."

Under Wolf's proposal, the money for local governments would no longer rise and fall with the number of wells drilled and the price of natural gas.

Hill said the organization wants the fee to continue to float, even if it takes the risk that the fee revenue could drop below $225 million.