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Armstrong Commissioners approve impact fees on gas wells

| Friday, April 6, 2012

KITTANNING — The Armstrong County Commissioners on Thursday unanimously passed an ordinance imposing impact fees on Marcellus shale natural gas wells in the county.

State Act 13 signed by Gov. Tom Corbett in February allows counties to enact the fees on unconventional natural gas wells.

The county's unconventional gas well impact fee ordinance makes the county eligible to collect $50,000 for each unconventional well — wells drilled horizontally and vertically. Conventional wells drill only vertically.

The legislation gives 60 percent of the collected fees to counties and its local municipalities and 40 percent goes to the state.

The county could collect as much as $5.6 million and keep about $3 million from the fees.

The commissioners received some public feedback in their approving the fee ordinance.

Dwight Claypoole of West Franklin criticized a provision in the state law that sets the distance from a well to a source of water as 1,000 feet rather than 500 feet. Claypoole said he and other landowners in the county who leased property to drillers will lose wells and compensation because of the stipulation.

Claypoole also questioned the commissioners about whether the county had been paid for a lease it had arranged with a gas driller.

In January, 2011, the former board of commissioners announced they had approved a lease agreement with EXCO Resources for 213 acres of county-owned property for the potential drilling for Marcellus shale natural gas.

County officials at that time agreed to a five-year lease that would pay the county about $639,000 upfront from EXCO, a Texas-base company with offices in Warrendale, for the deep-well drilling rights on property at Armsdale. The land is on both sides of Route 85 in Rayburn. The lease also was to provide for an 18 percent royalty paid to the county if gas is produced there.

Commissioner Rich Fink told Claypoole that there was a problem with the lease and that the county did not receive any money for it. The lease agreement was contingent on a clear title and the county did not have that, according to county records.

County officials had not previously announced that there would be no lease with EXCO nor that there was no compensation.

One audience member asked the commissioners yesterday to earmark money received from the Marcellus well impact fee for property tax relief.

Under the law, money from the fees can be used for water and waste water systems, road maintenance and improvements, emergency preparedness, environmental programs, increased safe/affordable housing, employee training, planning initiatives and for tax reductions.

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