PA Pays Out $146M in Impact Tax for 2020 – Lowest Ever
Yesterday the Pennsylvania Public Utility Commission (PUC) posted detailed information about this year’s distribution of last year’s impact fees on natural gas producers. PA raised a total of $146 million from Act 13 impact fees (PA’s version of a severance tax). That is by far the lowest annual amount raised and distributed by impact fees–some $46 million less than last year. Given the hit of COVID-19 in 2020 (resulting in less drilling) and the low price of natural gas at Henry Hub (the tax rate assessed for each well was in a lower revenue tier) we’re not surprised. Next year will look far different.
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Finally! This is a red-letter day. The U.S. Energy Information Administration (EIA) Drilling Productivity Report for June (with forecasted numbers for July) predicts natural gas production in the Marcellus/Utica region will swing from month-over-month decreases we’ve seen for the past year and a half (
“A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury.” (See below for the full quote.) Yesterday Pennsylvania Democrats unveiled their latest “generous gifts” they’re promising to bestow on Pennsylvanians from the public treasury if Gov. Wolf gets his way and imposes a Marcellus-killing carbon tax on electric power generation. The Dems figure they can raise about $300 million a year via a carbon tax and they have a wish list bigger than your wildest dreams for where they’ll spend it. One tiny problem for the Dems…
Several weeks ago we brought you the news that landowner Gateway Royalty was sounding the alarm over a new bill quickly advancing in the Ohio legislature. Ohio’s House Bill (HB) 152 would use forced pooling if 65% of a proposed unit’s landowners are leased (too low a bar) and also would force the landowner to accept a 12.5% royalty and force them to accept post-production deductions with royalties in some cases potentially going down to nothing (see 
Keystone Clearwater Solutions, a company that provides water services for shale drillers in the Marcellus/Utica, is buying the Pennsylvania operations of competitor ECM Energy Services. Keystone, which operates primarily in Pennsylvania, is picking up ECM’s Williamsport, PA operation and rebranding it under the Keystone name. ECM says the sale frees them up to concentrate on their operations in Ohio and West Virginia.
The price of electricity and natural gas in New York State is through the roof. Average New York Independent System Operator (NYISO) power prices across major hubs increased by 50% year over year in May, and natural gas prices increased nearly 75% year over year. It’s a train wreck here in New York. And you can directly blame Andrew Cuomo and the Democrats in the NY legislature for blocking new natural gas pipelines. That’s the root cause. No pipelines = obscenely high prices for electricity and gas.
MARCELLUS/UTICA REGION: Bradford Co. to receive 9.3M through Marcellus Shale impact fees; Senate committee eyes vote to shield natural gas from Ohio city bans; Encino Energy wins award from Eastern Ohio Development Alliance; NATIONAL: Hydrogen isn’t as clean as it seems; US natural gas futures hold near 7-month high; How COVID-19 reshaped the future of North American LNG projects; No place for pipelines or affordable energy under Biden’s plan; INTERNATIONAL: Gas is so scarce in Europe that coal is making a comeback.