Deal Expected in Pennsylvania Shale Gas Legislation
This post was written by Jennifer Smokelin
As we've discussed, the Pennsylvania House of Representatives and the Pennsylvania Senate passed versions of shale oversight legislation last November. The measures differ in several ways, including how to update the state's environmental rules and method for implementing and distributing a drilling impact fee. The House proposal, which mirrors much of what the governor outlined in his Marcellus Shale policy announcement, would allow for a fee on producing wells of up to $40,000 per well in the first year and decreasing annually to $10,000 in years four through ten. The Senate has offered a fee that starts at $50,000 per well, decreasing through a period of 20 years -- twice as long as the assessment in the House bill. Recent negotiations between Republicans and the Governor appear to have resulted in a proposal that meshes aspects from the bills that passed the House and Senate, with a few new twists. The recent proposal would vary the per-well fee dependent on the price of natural gas. This new proposed system would raise between $190,000 and $355,000 per well over 15 years, compared with the House version's $160,000 over 10 years and the Senate's $360,000 over 20 years. Fees would begin to be assessed this year for wells drilled in 2011 and be due when drilling begins, thus increasing the number of wells subject to the fees. Previous plans would have charged drillers for producing wells.
The proposal would also change zoning and certain Pennsylvania Department of Environmental Protection (DEP) regulations. In particular, the proposal would increase bonding fees and penalties, and require the disclosure of chemicals used in hydraulic fracturing. You can find additional information here.
