Drilling impact fees OK'd in agreement on Pennsylvania oil and gas law
The impact fee on Pennsylvania's shale drillers is likely to stand under an agreement reached in the challenge of the state's revamped oil and gas laws.
A state Supreme Court ruling in December put the impact fee on unconventional wells in doubt, but municipalities and other groups challenging the law reached an agreement with state lawyers last week to exclude it from the legal debate.
“That's fantastic news. I'm really thrilled about that,” said Shirl Barnhart, supervisor in Morgan, Greene County, and an officer of the Pennsylvania State Association of Township Supervisors. “I think anybody that has to deal with the gas wells and is getting the impact fee is going to be really pleased that it's staying in place.”
The Supreme Court threw out parts of the oil and gas law overhaul, known as Act 13, in December but said that a lower court would have to decide whether the rest of the law — including the impact fee — could legally stand without the parts the court struck down.
Commonwealth Court Judge Dan Pellegrini had said he would let stand whatever remaining portions of the law its opponents and the state agreed not to challenge, the two sides said on Monday. They agreed to keep debating only four elements — and not the impact fee.
Five Pittsburgh-area townships led a challenge against the law. The impact fee was not a part of that challenge.
The fee has produced $200 million a year since it was a central part of the oil and gas law overhaul, passed in February 2012. It charges deep-shale gas well owners a fee of $5,000 to $50,000 per year depending on the age and size of the well and market conditions. The state and local governments divide the money, which is supposed to cover impacts from drilling such as the need for new housing, conservation and roads.
Both the challengers and the state believed that it could stand, said John Smith, solicitor for Cecil and Peters, two of the winning parties in the case, and Joshua Maus, spokesman for the Office of General Counsel, which is helping to coordinate the state's defense. The drilling industry is petitioning to join the case, but that shouldn't affect the impact fee, said Louis D. D'Amico, president of the Pennsylvania Independent Oil & Gas Association.
“That's not an area we're interested in challenging at all,” D'Amico said. “We kind of agree with the concept of the impact fee.”
The Commonwealth Court will review arguments on whether doctors can be prohibited from discussing the types of drilling chemicals that may be affecting their patients, some gas companies can be allowed to take land for their work, drillers can be exempted from alerting public water suppliers of spills and the Public Utility Commission can have jurisdiction over some of the new rules. Written arguments are due in April, and both sides are scheduled to appear before the court May 14 in Philadelphia, according to the order.
Timothy Puko is a Trib Total Media staff writer. He can be reached at email@example.com.