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The success of the Marcellus Shale, and the future success of the Utica Shale, has resulted in Pennsylvania Governor, Tom Corbett, signing into law House Bill 1950. This recent law allows counties affected by gas exploration to impose an impact fee on participating companies in that county. The law has a two-fold effect. It helps protect water quality near the wells, and it allow counties to levy fees that they can put into local and county infrastructure. Fayette County adopted the impact fee in April, 2012.
Fayette County Plans to Use Fee for Road Improvements
Fayette County estimates that it will collect $6.9 million from the impact fee in 2012. Some of the money will go to the state, the county will get a share, and about $2.7 million will be split among the municipalities. The funds are likely slated to improve roads and bridges and meet the needs of first responders. Municipalities within Fayette County are rushing to adopt ordinances that allow them to collect a part of the fee. Even cities and towns that have not been affected by activity in the Marcellus Shale are passing the ordinance to get ready for possible growth.
Those areas that are not directly affected by wells often bear the burden of heavy truck traffic. The impact fee helps these municipalities keep the roads maintained. With the early positive results from the deeper Utica Shale, Southwest Pennsylvania is preparing for even more energy activity.
HB 1950 Also Addresses Water Quality Concerns
Along with the option to impose an impact fee on drilling companies in Fayette County, HB 1950 also address water quality concerns that have arisen due to hydraulic fracturing. Both the Marcellus and Utica Shale formations are rich in natural gas, and energy companies are engaging in “fracking” to get more gas from the deep shale formations.
Hydraulic fracturing entails pushing high pressure water mixed with sand and chemicals down the drill hole in order to release the gas from the rock formation. The chemicals are causing concern. Citizens and environmentalists fear these toxins will seep into deep water reserves. The new house bill limits the distance any well can be from the various water supplies.
Although “fracking” has little known impact on water quality, this bill and the impact fee help allay fears while also injecting much-needed revenue into Fayette County and other counties in Southwest Pennsylvania. Energy companies are using horizontal drilling methods to cut the number of well heads, and therefore better protect adjacent surface land in the Marcellus Shale.
It’s common for counties, throughout the nation, to impose fees on energy companies to help keep roads and other necessary infrastructure in good condition. In fact, one of the benefits of energy activity in any county is the financial boost that comes with impact fees.