New Castle News

Marcellus Shale

February 15, 2012

County introduces shale fee ordinance

NEW CASTLE — The Lawrence County commissioners want the county and local municipalities to reap some royalties from Marcellus Shale.

They introduced an ordinance Tuesday that would impose an impact fee on all unconventional gas and oil wells drilled in Lawrence County.

The ordinance comes directly on the heels of legislation that Gov. Tom Corbett signed into law Monday, allowing counties to impose the fees on drillers.

The fees would be shared by formula among the state, county and all municipal governments in a county, with more of that money going to the municipalities where the wells are located.

The “unconventional” gas well fees referred to in the act would apply to gas and oil wells drilled in the area for Marcellus and Utica shales, commissioner chairman Dan Vogler explained.

The commissioners will conduct a hearing at 9:45 a.m. Feb. 28 for public input before enacting the proposed ordinance at their meeting that day.

So far, two wells have been drilled in the county — by Shell Appalachiaon a Little Beaver Township farm. The company is looking to drill several more wells in the county this year.

 According to an analysis provided by the County Commissioners Association of Pennsylvania, the legislation amends the state Oil and Gas Act and allows counties to levy impact fees by ordinance.

The fee system in a county would be triggered by the presence of even just one spud well — spud meaning the actual start of drilling, Vogler explained.

The impact fees would be collected by the state Public Utility Commission as a per-well fee, Vogler said. Of the amount levied, the state would keep 40 percent and would be able to allocate that money to a variety of agencies for administration purposes related to the sale industry.

The county and municipal governments would receive 60 percent of the fee collected, which could be used for roads, bridges and infrastructure; water, stormwater and sewers; emergency preparedness and public safety; environmental and recreation programs, preservation and reclamation of water supplies; tax reductions including homestead exclusions; availability of safe and affordable housing; records management, GIS and information technology; delivery of social services; judicial services; deposits into capital reserve for use on allowable projects; career and technology centers for training related to the gas and oil industry and local or regional planning initiatives under the state municipalities planning code.

Of the 60 percent of the fees, the host counties receive 36 percent on a pro-rated basis per number of wells, Vogler explained.

Of that 60 percent, host municipalities — those where wells are drilled, will get 37 percent of that, and of the other 23 percent, half will go to host or non-host contiguous municipalities or those within five miles of a well. The other half would be distributed to all municipalities in the county.

For example, Little Beaver is a host municipality because it has two wells, and New Beaver and North Beaver are contiguous, Vogler said.

The fee is levied against all unconventional gas well spuds. The fee is levied annually per well. A well is defined as a bore hole drilled for the production of gas, so each hole on a pad is counted separately, according to the commissioners association fact sheet.

The fee is established on a sliding scale, with a duration of 15 years per well. The rate paid is determined by the average price of natural gas for the prior calendar year.

The fee for vertical wells is 20 percent of the rate for horizontal wells.

Vogler said the two wells drilled last year in Lawrence County could generate impact fees of $40,000 for the state for this year, $21,600 for the county and $38,400 as the municipalities’ share, .

(Email: dmorris@ncnewsonline.com)

1
Text Only | Photo Reprints
Marcellus Shale
  • Our Opinion: New study suggests problem with some state shale gas wells

    A recent study of leaks from shale gas wells raises more questions than it answers. And because of the growing presence of shale gas wells in Pennsylvania, it’s essential that both government and industry provide clarity.

    July 9, 2014

  • gavel.jpg Holdout property owners file for injunction

    Holdout landowners are asking Commonwealth Court to declare that forced pooling violates the state constitution.

    May 5, 2014 1 Photo

  • gavel.jpg Holdout landowners retain Pittsburgh attorney; ask hearings be postponed

    A Pittsburgh attorney is asking that next month’s hearings on forced pooling be postponed. Atty. Omar Abuhejleh also filed a motion with the Pennsylvania Department of Environmental Protection Friday allowing the affected landowners to formally intervene in the case filed by Hilcorp Energy Co.

    April 26, 2014 1 Photo

  • Dangers of fracking the topic at Villa Maria

    Public health concerns about fracking must be addressed, a nurse practitioner told approximately 150 people at Villa Maria on Thursday.

    April 26, 2014

  • Bobosky.jpg Gas holdouts unconvinced of safety

    When Suzanne Matteo and her husband, Martin, bought their house on four acres in Pulaski Township they had a plan. They would grow a huge vegetable garden, raise lots of flowers and a few chickens and enjoy the fresh air and quiet.

    April 17, 2014 1 Photo

  • gavel.jpg Anti fracking group waits for answer to its letter

    More than 20 state environmental groups are asking that March 25 and 26 hearings on proposed “forced pooling” be postponed. They say more time is necessary to allow members of the public to voice their opinions.
     

    March 18, 2014 1 Photo 2 Stories

  • Hilcorp_Energy.jpg DEP seeks extra hearing, more room

    State officials are seeking greater public participation for a hearing on a request that could lead to “forced pooling.” The Pennsylvania Department of Environmental Protection is asking that the hearings be moved to a facility that  can accommodate 500 people, and that an additional day of hearings be added.

    March 17, 2014 1 Photo

  • Hilcorp_Energy.jpg Hilcorp seeks to force drilling on reluctant landowners

    A hearing has been set on a request to force local landowners to allow gas and oil drilling. Hilcorp Corp., a Texas firm with multiple well pads in the area, is asking for the so-called “forced pooling.”

    March 14, 2014 1 Photo

  • shale.tiff Commission reviews 11 well pad plans

    As Marcellus and Utica shale drilling continues and pipelines are laid, plans are in place for more well pads locally. The Lawrence County Planning Commission reviewed land development plans Tuesday for 11 sites for well pads, which are where the drilling rigs are set up.

    December 12, 2013 1 Photo

  • pipe.tiff Natural gas pipeline webs being spun through area

    First of three parts: A few years ago, talk about Marcellus and Utica shales was about drilling and fracking. While drilling for natural gas is now prevalent locally and well pads are dotting the county’s horizon, focus is shifting to the digging for construction of pipelines to transport the gas from the drilling sites to areas throughout the middle and eastern United States.

    October 29, 2013 1 Photo

House Ads
Seasonal Content
Section Teases
Must Read
Poll

Before this weekend's release of the new Marvel film, which previous 'guardians of the galaxy' were your favorite?

The Federation/Star Fleet
The Green Lantern Corps
Jedi Knights
Earth Alliance (Babylon 5)
Space Ghost, Jan, Jace and Blip
     View Results