Yesterday, Pennsylvania Governor Tom Corbett finally released his new Marcellus Shale oversight plan, much of which is based on the Marcellus Shale Advisory Commission's report provided to him in July. Gov. Corbett's plan provides for a county-assessed annual impact fee of $40,000 per well during the first year of production. The fee would decrease to $30,000 and then $20,000 for the second and third years of production respectively. After that, producers would be assessed at $10,000 per well for the subsequent seven years. The estimated $120 million in revenue generated from the fee in its pilot year would be distributed primarily to counties and municipalities hosting natural gas drilling, with the remainder going to state agencies such as PennDOT, the Pennsylvania Emergency Management Agency, the State Fire Commissioner, the Department of Health, the Public Utility Commission, and the Department of Environmental Protection. The Corbett administration estimates that the fee would generate up to $195 million by the sixth year.
In addition to the impact fee, Gov. Corbett also proposes to increase the minimum setback distance between gas wells and water supplies as well as expand the presumption of liability distance for producers from 1,000 feet to 2,500 feet. In addition, bond payments and penalties for civil violations would be stepped-up. The Governor's plan also incentivizes schools and mass transit systems to convert to natural gas for fuel and provides for natural gas fueling stations every 50 miles along new "green corridors" throughout the state.
The next step is for the plan to go before the Pennsylvania legislature for approval and state agencies for execution.