Pennsylvania Governor Tom Corbett signed into law yesterday sweeping measures to govern the extraction of natural gas from the swath of Marcellus shale underlying the state. The Governor's signature caps a three-year struggle in the Pennsylvania General Assembly to pass meaningful energy regulations and quiets calls for an impact fee on producers.
The Senate approved H.B. 1950 by a 31-19 margin on February 7; it passed the House of Representatives the following day 101-90. The bill allows municipalities to levy impact fees on natural gas wells that could generate millions in annual revenue. The fees would be dictated by a sliding scale based on the price of natural gas. The Public Utility Commission will oversee collection and distribution of the fees levied by municipalities.
Sixty percent of the fees will be distributed to areas upstate that bear the greatest impact from drilling for road repairs and other public safety projects. Other portions of the state, including Philadelphia, will receive the remainder.
The measure also expands environmental regulations including increased penalties and setbacks from waterways and disclosure of chemicals used in the hydraulic fracturing process. The bill also mandates additional procedures for handling spills. In addition, municipalities would be prohibited from disproportionately regulating drilling over other industries or risk loss of fee revenues.
Should you have questions about how the new law will affect your business, please contact me using the information below.