Pennsylvania’s Impact Fee is ‘Chump Change’

If you take a look at how much Texas nets from its severance tax on oil and gas production, you realize how badly Pennsylvanians are getting screwed with mere ‘chump change’ impact fees. There have been multiple efforts over the years, the latest by Pa Governor Tom Wolf, that have failed to institute a fair severance tax on oil and gas production, even with so much of it being exported out of state, and outside the U.S.

Shale gas wells show rapid production declines leading to a 'drilling treadmill'

Back in January, we read the newspaper story, ‘Marcellus Shale Impact Fees Projected to Rebound After
Pandemic Slump
‘…

A new report from the Independent Fiscal Office credits a surge in natural gas prices for driving impact fees to an estimated $233.8 million for 2021. The total collection is projected to be $87.6 million higher than the previous year, when the pandemic cratered the price of natural gas and the fees paid per well.”

Yesterday, another newspaper story, ‘In U.S., States Struggle to Replace Fossil Fuel Tax Revenue‘ grossly exaggerated the amount of money Pennsylvania counties receive from oil and gas production with this sort of nonsense…
“A per-well drilling fee on the state’s booming Marcellus Shale gas industry has rained cash on rural counties and municipalities for nearly a decade.” Rained cash, really?

I might add, that Associated Press story was generic, in that it didn’t print the reporter’s name for any rebuttal, and went on to reference our Washington County PA with further hyperbole…
“South of Pittsburgh, Washington County reaped over $100 million in the past decade. That’s equivalent to $500 per resident (actually $477) — a “game changer,” said county board chairwoman Diana Irey Vaughan. The windfall paid for park and bridge improvements, among others.” How many other legislators would promote drilling INSIDE a county park, as she has?

Drilling of Cross Creek County Park wells where a spill and fish kill later occurred
PA DEP spill report inside Cross Creek County Park

To really “rain cash” with oil and gas revenues that are actually “game changers” you need to look to all the other states that have a meaningful severance tax. Pennsylvania is second in production to Texas, so let’s compare!

(AUSTIN) — Texas Comptroller Glenn Hegar today released totals for fiscal 2021 state revenues:

There’s a BIG difference between BILLIONS and millions!

Therefore, it’s downright ridiculous to compare the small amount of revenue Pennsylvania receives from a stand alone impact fee, compared to states like Texas, Wyoming, North Dakota, Alaska and New Mexico. You can thank the Republicans who have controlled the Pennsylvania legislature for that sort of ongoing gift to their frackin’ pals!

And while Ms. ‘drill baby drill’ Irey-Vaughan would like you to think that $50 per resident per year is a big deal (actually $47.70), her sort of ciphering completely overlooks the resulting road and bridge damages, as well as added health care costs. Who is going to pay for those? Taxpayers and individuals themselves!

Look at the high cost of Pennsylvania state roadway degradation from drilling activity in this study:

“This technical note provides a first-order estimate of roadway consumptive use costs of additional heavy truck traffic on Pennsylvania state-maintained roadways from Marcellus Shale natural gas development in 2011, estimated at about $13,000- $23,000 per well for all state roadway types, or $5,000-$10,000 per well if state roads with the lowest traffic volumes are excluded.” Source

For one of the newly permitted well pads in Washington County, Pa with 40 wells, that’s $520,000 to $920,000 for that single location! Costs would definitely be much higher now, than they were in that 8-year old study. In another study, depending on the transportation methods and type of roads used, that translates into $106 to $40,000 per mile of roadway!

Health care costs and studies can be found in these links:
Shale & Public Health – Conference Archive


Specific videos from those conferences:

Congenital Heart Defects, Cardiovascular Disease, and Unconventional Gas Development
Lisa McKenzie PhD MPH, Assistant Research Professor, Colorado School Public Health

New Research on Birth Outcomes: 

Lisa McKenzie, PhD, MPH, U of Colorado Anschutz

David Gonzalez, Stanford, at the 8th Annual Shale & Public Health Conference 2020

Lara Cushing, PhD, MPH, UCLA, at the 8th Annual Shale & Public Health Conference 2020

Unconventional Gas Development, Maternal Mental Health in Pregnancy, Birth Outcomes
Joan A. Casey PhD  Assistant Professor, Columbia Mailman School of Public Health  

Shale Development & Childhood Cancer; New Research Tools
Shaina Stacy PhD MPH Postdoctoral Scholar, UPMC Hillman Cancer Ctr, GSPH &
James Fabisiak PhD Associate Professor, Pitt Grad School of Public Health

Perinatal Outcomes and Unconventional Natural Gas Development (UNGD) in Southwest Pennsylvania
Bruce Pitt PhD

Ethane crackers, the Louisiana experience, shale and public health issues  Must watch!
Wilma Subra MS

Air Pollutant Emissions from UNGD and Infant/Child Respiratory Health
Ellen Webb MPH

Compressor Station Emissions and Health  Must watch!
Michael McCawley PhD MSE  Clinical Assoc. Professor, WVU School of Public Health

8th Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking and Associated Gas and Oil Infrastructure (PDF)

UPDATE: Natural Gas Fueling West Virginia’s Revenue Boom
November 15, 2022 – West Virginia is once again bringing in record-breaking tax revenue surpluses, with natural gas severance driving more than 20% of those surpluses. Natural gas severance tax revenue between the start of the 2023 fiscal year in July and October accounted for approximately 20% of the $575 million in total general revenue fund surplus tax revenue during the same time period. Natural gas severance tax collections during the first four months of the current fiscal year of $205 million exceeded the $92 million estimate by the state Department of Revenue. Year-to-date severance tax collections for natural gas, oil, and coal of $341.2 million were 474.5% more than the $59.4 million estimate for a year-to-date surplus of $281.8 million – making up nearly 50% of the total year-to-date surplus. October severance tax collections of $69.1 million were 475.7% more than the $12 million revenue estimate for a $57.1 million surplus for the month.

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