Marcellus Shale Impact Fee Details Announced

On October 3, 2011 Pennsylvania Governor Tom Corbett announced the details of the Marcellus Shale impact fee originally proposed by the Governor’s Marcellus Shale Commission in July. This fee would be imposed and collected by the counties where the gas wells are located.

The breakdown of the fee over a ten-year period is as follows: $40,000 for the first year; $30,000 for the second year; $20,000 for the third year; and $10,000 for years 4 through 10. The total amount paid over a ten-year period is $160,000 per well. The proposed allocation of the funds is 25% to the state and 75% to the local municipalities. The breakdown among the municipalities is 36% to the county, 37% to the municipalities hosting the wells and the remaining 27% to the municipalities within the county where the well is not located.

A large portion of the state’s share would go to PennDOT for use on infrastructure repairs in drilling counties. The Pennsylvania Department of Environmental Protection would receive 10.5% of the State allocation. PEMA, the State Fire Commissioner, the Department of Health and the Public Utility Commission would each receive shares of less than 10%.

This impact fee proposal also comes with some additional environmental regulations. The Governor would like to increase the minimum distance between a gas well and streams, rivers, or private water supplies. He is also proposing to raise the bonding amounts that drillers pay for their wells, as well as double the penalties for civil violations, from $25,000 to $50,000. Another major proposed change would be to increase the “presumed liability” for people living near well sites from 1,000 feet to 2,500 feet. Therefore, if a person’s water supply is impaired and they live within 2,500 feet of a drilling site, the energy company would assume the legal liability for the problem. This would provide additional safeguards for those individuals and families that reside in the heart of the drilling areas.

Finally, there are incentives for the energy companies to reduce the amount of the impact fees they pay by funding natural gas fueling stations and natural gas public transit vehicles. The details regarding these proposals remain unclear.

© 2011 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Continued Compliance with CAISO SQMD Requirements in Non-Reporting Years
Rock You Like a Hurricane (..Maybe)
President Trump Signs Two Executive Orders to Enhance Pipeline Production
Pennsylvania's New Natural Gas Severance Tax Proposal
Vendor Audit: A Necessary Assessment
ASC 842 Expected to Impact Natural Resource Sector

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102