Skip to comments.Oil companies pay $630M in Pennsylvania drilling fees
Posted on 04/09/2014 5:35:05 AM PDT by thackney
Anadarko Petroleum, Chesapeake Energy and others will pay the state of Pennsylvania about $225 million in fees this year for drilling in the gas-rich Marcellus Shale too little, according to critics of the state law setting the fee say.
The fees, enacted in 2012, flow to local governments to fund basic needs like bridges, roads, firefighting equipment and environmental programs. By the end of the year, the recurring charges on nearly 6,500 natural gas wells will have brought more than $630 million to state coffers.
We are building a stronger Pennsylvania by harnessing our abundant resources to create jobs for working families, reinvest in our local communities, and protect our environment for generations to come, Pennsylvania Gov. Tom Corbett said in a written statement last week, saying the fees are making sure our world-class energy industry grows in a responsible way.
According to SNL Energy, Corbett said at an industry conference earlier this year he wants to see oil companies invest more and even build headquarters in Pennsylvania. He added the state wont roll over to the industry, but wants to buy in to the increased investment in the states Marcellus and Utica shale plays.
Calls for higher fees
Fort Worth-based Range Resources paid the most with $27 million in fees last year, followed by Oklahoma Citys Chesapeake with $26.6 million. Anadarko, which is based in The Woodlands, paid $12.3 million in fees last year. Two Houston-based oil producers, EOG Resources and Cabot Oil & Gas, paid $4.5 million and $13.2 million, respectively, last year.
But Corbetts political opponents, including state lawmakers, want the oil and gas companies to pay more. They point to a report from the states independent fiscal branch that found Pennsylvanias drilling fees were lower than severance tax rates on gas production in Texas and other states, which do not have drilling fees.
Severance taxes are based on production volumes. Pennsylvania levies a fee for each well that is drilled. But critics of the fees havent acknowledged the state also requires companies to pay one of the largest corporate income taxes in the nation and other levies, Corbett spokesman Patrick Henderson said in an interview with FuelFix.
The report, he said, did not draw out an apples-to-apples comparison between Pennsylvanias fees and severance taxes in other states. The fees, which recur on individual wells over 15 years, are also based on variables like natural gas prices. Many in the states two legislative chambers believed they should charge more for shale drilling.
Our argument all along is that they dont take a look at other taxes that Pennsylvania assesses, Henderson said. Were competing for capital investment with other shale plays. All of those are a factor in our business climate.
The state law that created the drilling fees in 2012 has stirred controversy among local governments. State courts have erased provisions that required local governments to allow oil and gas development in any zoning area. Though some aspects of the law remain in different stages of appeal, the fees have remained untouched so far.
All the Democraps running for Governor are screaming it isn’t enough.
They want them to pay umpity-ump BILLION dollars in order to “fully fund” our public schools.
Give ‘em time and the political vermin will F this up too.
Government: there is never enough of “ other people’s money “ .... or there is never enough reasons to tax the people to death, and there is never any good reason for the government to live with in it’s means.
They are trying really, really hard to kill the goose that laid the golden egg.
They might succeed too...
And they seem to go into orgasmic fits of glee every time they point out that Sarah Palin raised extraction taxes when she was Governor.
Well thank goodness...NY gets their ed bucks from lotteries.
Sure they do. But only after every bureaucrat at every level slices off his portion.
And what do the local governments do with it? Not any of the high-minded projects listed. When it comes to roads and bridges the locals shrug their shoulders and say it's up to the state DOT.
Environmental programs? Don't make me laugh. What, exactly, is Podunk, PA doing in the so-called environmental sector? Putting up a wind turbine to light the city hall restrooms?
Instead, they put a couple more bureaucrats on the payroll and/or hire a cop or two strictly to write speeding/DUI tickets. The cops get their training and experience under their belt at taxpayer expense then fly the coop to a larger department, the sheriff's office, state police, etc.
Liberals stompin’ on those green shoots.
As usual they will kill the golden goose.
You can’t fix retarded.
I recall one of Corbett’s opponents had an ad which featured the line “Corbett kept his promises to the oil companies”, as if keeping promises were a bad thing. To a Democrat, I suppose it is.
Maybe somebody realized the bad optics, as I haven’t seen this McCord ad in recent days.
With the exception of the older urban schools, Pa has modern and re-newed buildings, electronics and 'programs' galore.
Any money gleaned from the drillers should go into infrastructure .... build another Anchor Hocking .... build a modern steel mill ... build blue collar factories.
We have the opportunity to bring back the labor of the 50's with the pay of the 2000's