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The Fake News About Pennsylvania’s Impact Fee

Brittany Ramos
Coordinator, External Affairs
Cabot Oil & Gas

  

Every budget season the fake news about Pennsylvania’s Marcellus Shale Impact Fee starts being spread by advocates of a severance tax who deny we have one.

It’s budget season in Pennsylvania which inevitably means two things will happen:

  1. There will be some sort of budget shortfall our elected officials need to work through – right now estimated to be around $3 billion
  2. Newspapers will suddenly be filled with letters to the editor and columns and op-eds proclaiming “the natural gas industry doesn’t pay their fair share” which tends to be followed by “Pennsylvania is the only state without a severance tax”

I’m already seeing some Groundhog Day familiarity already across the newspaper headlines in this Commonwealth with fake news everywhere on the subject.

What exactly does the phrase “fair share” even mean? Who determines what is “fair” and how that “fair share” will even be spent?

A couple of weeks ago someone told me the only cases they’ve ever heard that phrased used is when the group calling for a “fair share” would stand to benefit by getting more money. Interesting thought.

The way Pennsylvania’s impact fee works is not by having all of the money go to Harrisburg to be used for budgetary purposes. Instead, every single county in Pennsylvania, whether or not drilling is occurring, gets a payout each year from the activity in the Marcellus & Utica. And if drilling activity is happening in a municipality, they receive an additional payout of funds (hence the “impact” part).

What are these funds being used for? Everything from replacing roofs on courthouse buildings, at no cost to the taxpayers to cleaning up acid mine drainage flowing from old coal mines. While these funds are earmarked to specific types of improvements, the point is the distribution of this money is up to the residents who receive it, rather than going into our black-hole of a state budget.

As to the second statement popping up in newspapers, they’re 100% correct – Pennsylvania does not have a severance tax which would be determined on a percentage of the natural gas coming from the ground. Instead, it has an impact fee assessed each time a new well is drilled and for the next 15 years. Here’s a nice breakdown of how these fees are assessed.  Also note how this fee increases as the average natural gas price increases.

Source: Marcellus Shale Coalition

How much does the impact fee collect?

The 2016 drilling activities were assessed $173 million which amounts to a 9.16% effective natural gas tax. To date, $1.2 billion has been collected from activities in the Marcellus and Utica.

But, because the $1.2 billion is called an “impact fee” instead of a “severance tax” it’s not enough? It doesn’t count?

Someone had better tell the hundreds of municipalities and counties across Pennsylvania they’re spending fake money.

Editor’s Note: This article reposted from Well Said Cabot. Also, note a complete list of Marcellus Shale Impact Fees, including grants to counties, to municipalities and for specific projects may be found here. The top 10 counties are as follows:

The top 10 counties by fees paid out to county government are:

The top 10 counties by fees paid out to municipalities are:

The top 10 counties by grants made for legacy projects are:

And, finally, the top 10 individual legacy projects are:

Notice how the Marcellus Shale Impact Fees are spread all across Pennsylvania. Any notion the Commonwealth has no severance tax is pure fake news. It just isn’t in the hands of politicos to pass out as if they created it or to use to cover other spending. Note, too, the presence of Luzerne County as No. 2 on the list of top counties for receipt of Marcellus Shale Legacy Project grants.

Ironically, a few weeks ago there was a pathetic event in Luzerne County to protest the fact Pennsylvania supposedly had no severance tax. You can watch it here, if you can stand it. It was attended by less than a dozen people, including pols and public employees. How many of these folks do you suppose realized their non-shale county was on of the largest beneficiaries of Pennsylvania’s Marcellus Shale Impact Fees; its own special form of a severance tax?

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4 thoughts on “The Fake News About Pennsylvania’s Impact Fee

  1. http://www.nbc29.com/story/35893723/ralph-northam-faces-pressure-from-protesters-for-pipeline-views

    Interesting. In todays news I see a pipeline and politics story involving a democrat running for governor. Last year in July there was news on a pipeline and a democratic party politicians daughter, karenna Gore, getting arrested in a pipeline. By the way karenna Gore was arrested with Tim De Christopher who has a climate disobedience organization with a member associated with the multiple pipeline break in and valve turning stunt from last year. That member was just convicted of a burglary charge for that break. Also in the pipeline ditch was Dave publow who I met in 2012 and who was arrested on on construction equipment in 2012 on the Spectra nynj pipeline. Also arrested with karenna Gore, former vice president Al gores daughter was the young woman Sophia who late protested the dakota pipeline , sustaining a serious injury on a night where protestors decided they would take a bridge in their guerrilla war against the police, army corps, the pipeline company and the pipeline.

    http://www.nbcnews.com/news/us-news/al-gore-s-daughter-karenna-gore-among-23-arrested-pipeline-n602261

    Also a year ago bill mckibben, mark ruffalo, the Bernie nominees to the democratic party platform tried to get a ban on fracking on the platform. Interesting eh? Energy in depth used a headline about how the democratic party rejected the ban. Of course energy in depth isn’t a news org and their headline was ridiculous as the real story was about the attempt to get the ban period. Who covered the antifracking / Bernie Sanders faction’s attempt to put a ban on fracking on the democratic platform?

    https://energyindepth.org/national/democratic-national-committee-rejects-fracking-ban-on-party-platform/

  2. Notice how all those things involved democrats either targeted by antifracking movement or promoting it like Al Gore and his daughter?

    What happened last year during the presidential election season with fracking ? How come fracking and natural gas and energy weren’t major topics throughout the whole election? Well one thing I can tell you from last year is that a nytimes reporter told me he didn’t think anyone would do an expose on the anitfracking pipeline resistance movement and he certainly wouldn’t. Isn’t that amazing? Considering this reporter had put an activist in his reporting who had been lying to the public and in the news doing this and more for years?

    https://www.nytimes.com/2016/03/20/science/earth/environmental-activists-take-to-local-protests-for-global-results.html

  3. https://mobile.twitter.com/billmckibben/status/886629796146532352

    By the way bill mckibben is internationally known on the subject of climate change and he is passing on a petition about a fracked gas power plant in new York written by the actor James cromwell. Bill is also tweeting news about a fracked gas pipeline covered pisspoorly by la times.

    How’s that for interesting? Let me know what the number of times is that bill mckibben has been in the news in the last year whether the nytimes or daily news or politico or new republic or rolling Stone or the guardian either with an opinion, essay or something else?

    A blog cannot compete with the kind of exposure the antifracking movement gets. The truth about the antifracking pipeline resistance (and all infrackstructure) movement must be broadcast in the news where it can reach the largest amount of people.

  4. http://www.nydailynews.com/opinion/schumer-dems-stand-mcconnell-dirty-energy-bill-article-1.3323847

    How does the readership of natural gas now compare with the daily news which is where antifracking activist and leader mark ruffalo just had an opinion published along with fellow actor/documentary celebrity friend Fisher Stevens?

    How does the readership and therefore reach of natural gas now or energy in depth compare to the reach of the nytimes where the former vice president of the United States daughter published her opinion on consittuion pipeline last year? When did karenna then have a letter published about Spectra aim in the daily news?

    Blogging does not reach the number of people that need to be reached on this issue.

    https://www.nytimes.com/2016/04/16/opinion/stop-a-pipeline-for-fracked-gas.html

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