IFO Projects 2021 PA Impact Fee Revenue Soars, Up 60% to $233M
In early 2021 Pennsylvania raised $144.85 million from its version of a severance tax, called an impact fee, based on drilling activity from 2020 (see IFO Projects 2020 PA Impact Fee Revenue Fell by $55.9M (28%)). It was the lowest amount raised since the impact fee was implemented in 2012. The state’s Independent Fiscal Office (IFO) is out with projections for how much revenue will be raised this year, based on drilling in 2021. The impact fee has soared to its second-highest level ever since it was launched in 2012!
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Yes we predicted it and yes we were right (self-praise stinks, we know). We told you last year when the Pennsylvania Dept. of Environmental Protection (DEP) went forward with an absurd increase in the fee to drill a new shale well–from $5,000 to $12,500 (250%)–it would vastly slow the growth of new shale wells being drilled in the state and fall far short of revenue goals DEP hoped would fund the oil and gas program. Yesterday the DEP confirmed we were right.
Olympus Energy (formerly Huntley & Huntley) drills in the Greater Pittsburgh region, in Allegheny and Westmoreland counties. The company plans to drill a series of new wells (and well pad) in Washington Township in Westmoreland County. However, there’s a snag. Residents along a proposed road accessing the site don’t want the truck traffic on their narrow (18-foot-wide) road. Olympus doesn’t want to use an alternate route due to a sharp turn. Someone else proposed building a new access road, but it would cross a tributary that flows into the Beaver Run Reservoir (lots of red tape). The town is planning a couple of workshop meetings to figure out a solution.
Last week 18 permits were issued to drill new shale wells in the Marcellus/Utica, down from 24 the week before. Pennsylvania had the most new permits with 12, mostly in the northeastern part of the state in Lycoming and Susquehanna counties. Ohio had four permits evenly divided between Columbiana and Harrison counties. West Virginia had just two lonely permits, one in Lewis and one in Wetzel counties.
EQT Corporation, the largest natural gas producer in the United States, announced last Friday that all of its natural gas produced in Washington and Greene counties in Pennsylvania (the majority of its production, some 4 Bcf/d) is now officially certified as “responsibly produced” gas by two different certification organizations: Equitable Origin and MiQ. That 4 Bcf/d of certified gas represents 4.5% of all natural gas produced in the U.S.
Back in December, MDN editor Jim Willis had the delight and pleasure of attending an open house at the new location of the 
A Shell spokesman last week said that the mighty ethane cracker plant the company is building in Monaca (Beaver County), PA is now 80% complete and projected to be operational “sometime this year,” although a more specific date can’t be nailed down. Currently, there are some 8,000 workers who report to the construction site each day. Simply astounding! When the plant is done and operational, it will employ about 600 permanent on-site workers. Shell is now in recruiting mode to find those 600 permanent workers.
Earlier this week MDN told you that Pennsylvania Gov. Tom Wolf swiftly vetoed a Senate resolution sent to him that would block PA from joining the Regional Greenhouse Gas Initiative (RGGI), nothing more than a carbon tax that won’t actually reduce carbon emissions (see 
Yesterday the American Petroleum Institute (API) issued its annual “State of American Energy” report (full copy below). We will say right up front we’ve had our differences of opinion with the API and its direction, particularly over the past year, but there is no disputing the API remains the premier organization representing the oil and gas industry in the U.S. (and beyond). The API is at the top of the O&G food chain. So it’s a big deal that during the annual virtual event to unveil the latest API report the organization featured a young completions engineer who works for Coterra Energy (formerly Cabot Oil & Gas) in Susquehanna County, PA.
Our friends at NGI (Natural Gas Intelligence) are running an excellent series providing expert forecasts for the global natural gas and oil markets in 2022. The latest installment interviews several experts about the prospects for the Marcellus/Utica. With the Shell ethane cracker plant coming online sometime this year, the prospects for NGL sales in the M-U have picked up. Also in the discussion: capping Pennsylvania’s orphaned wells, drilling in the Wayne National Forest, and the Mountain Valley Pipeline coming online.
What is it about leftist Democrats that compels them to want to control everyone else’s lives (but their own)? Pennsylvania State Sen. Katie Muth is one of the worst offenders of this disorder. So too are PA State Rep. Dianne Herrin and Rep. Danielle Friel-Otten. The trio of Dem ladies are asking the odious PA Attorney General, Josh Shapiro (who is running for governor) to “halt construction of the Mariner East Pipeline.” Why? Because they don’t like it.
The Pennsylvania legislature recently passed a resolution against joining the Regional Greenhouse Gas Initiative (RGGI) carbon tax and sent it to Wolf, who had promised to veto it (see 
The Associated Press (better named Dissociated Press) is once again attempting to smear Cabot Oil & Gas, now called Coterra Energy, by playing up a simple legal move by Coterra aimed at resolving an ongoing criminal charge brought by the loathsome Pennsylvania Attorney General Josh Shapiro. Coterra waived a preliminary hearing in the case brought by Shapiro on Friday, and AP is jumping up and down to exclaim this is somehow an indicator of the company’s guilt–that Cabot really did pollute all those water wells in Dimock. Coterra’s move IS NOT an admission of any kind. We will explain.