Shale Energy Law Blog

Allocation of Act 13 Well Fee Announced

Last week, Governor Tom Corbett announced that county and municipal allocations of the Act 13 well fee, which totaled $225 million for calendar year 2013, were available for review on the Pennsylvania Public Utility Commission’s website.  The $225 million disbursement represents an 11% increase from 2012 and is in addition to the nearly $2 billion in corporate and personal income tax revenue paid by oil and gas companies in the past seven years.  Approximately $123 million will be distributed to county and municipal governments that host shale activity.  The county and municipal governments can use the money received from the Act 13 well fees on various expenses such as construction and repair of roads, emergency response preparedness, and sewer system construction and repair.  Additionally, state and county agencies responsible for overseeing the natural gas industry, including the Department of Environmental Protection, will receive $17 million in funding from the well fee revenue.  Another $82 million will be distributed by the Marcellus Shale Legacy Fund to counties for parks and recreation as wells as competitive grants awarded to local governments and non-profit organizations for environmental projects.

Well Fee County and Municipality Disbursements for 2013 (B1612296xAB63C)

2013 PA Act 13 Well Fees Expected to Generate $224.5 Million

Governor Tom Corbett announced on Friday that the state of Pennsylvania expects to collect $224.5 million in 2014 through Act 13’s well fee assessed on unconventional wells.  This figure represents an 11% increase over the previous year.  Since Act 13 became law in 2012, the total amount collected from the fee accounts for more than $630 million in revenue.

 The majority of the Act 13 well fee funds are directly distributed to counties and municipalities for a variety of authorized uses.  A portion of the funds are also distributed to commonwealth agencies such as the DEP and conservation programs like Growing Greener and Marcellus Legacy Fund.

 Act 13 imposes a 15 year fee for companies drilling into the Marcellus Shale formation.  The annual fees can range between $5,000 to $60,000 per well, depending on the current price of natural gas and the age of the well.