IFO Predicts PA Impact Fees for 2017 Will Soar, Near Record High
Since 2012, Pennsylvania has collected the equivalent of a severance tax from Marcellus Shale drillers via something called an impact fee. Same concept as a severance tax. You drill a well, gas comes out, you pay a tax. Except with an impact fee you pay whether or not anything comes out of the ground, meaning an impact fee is superior to a severance tax, which is based on how much comes out of the ground. The impact fee quickly started to generate hundreds of millions of dollars a year in extra revenue for Pennsylvania–60% of which goes back to the communities where drilling happens (which Philadelphia politicians hate), and 40% of which goes to the black hole of Harrisburg for redistribution (which Philadelphia politicians love). Drilling began to slow in 2014, and crashed in 2015/2016, with low low commodity prices for natgas. The impact fee doled out this year is based on revenues raised last year, in 2016, during the worst part of the downturn. So it’s no surprise that impact fees collected and distributed this year, in 2017 have been the lowest since the impact fee began (see PA PUC Impact Fee Report: Revenue Down Again in 2016). The PA Independent Fiscal Office (IFO) does a pretty good job of guesstimating how much impact fee revenue will get generated in the coming year, based on activity this year. The IFO just released an impact fee update (full copy below) with an outlook for 2017. The IFO predicts next year’s impact fee will generate around $222 million in revenue, which is very close to the highest amount generated thus far. Wow! What a swing in the pendulum–from lowest to near highest in one year…
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Last Thursday some 450-500 supporters, oil and gas industry workers and politicians gathered at the Shadowbrook Golf Course in Wyoming County, PA to express support for Williams’ $3 billion, 198-mile Atlantic Sunrise Pipeline project, most of which will get built in northeast Pennsylvania. The event was organized and sponsored by Cabot Oil & Gas, one of the major beneficiaries of the pipeline, and Williams, which will build and operate the pipeline. The overall purpose of the event was to give a metaphorical kick in the rear-end of Gov. Tom Wolf and his Dept. of Environmental Protection (DEP), which appears to be intentionally dragging its feet with granting stream crossing permits–about the only thing left before the backhoes fire up and start digging. The event, held from noon to 2pm, began with lunch–barbecue pulled pork and chicken–followed by a series of short speeches by political leaders from the region. With people gathered at tables, and some standing, a half dozen speakers stood on a giant flatbed trailer underneath what has to be the biggest American flag MDN editor Jim Willis has ever seen, hoisted and held between two large cranes (see the pic). The upshot of the speeches can best be summarized in a single statement delivered by Alan Hall, Chairman of the neighboring Susquehanna County Board of Commissioners, when he said: “It’s time to kick the politicians in the ass and get this [pipeline] done.” There were some other great one-liners too…
Apparently under pressure from environmentalist wackos, last Friday the Pennsylvania Dept. of Environmental Protection (DEP) issued a statement that says, in essence, we’re on the back of Sunoco Logistics over problems with construction the Mariner East 2 Pipeline. Gov. Wolf and DEP Secretary McDonnell both felt it necessary to voice their “concerns” over some of the episodes that have happened with construction the twin Mariner East 2 NGL pipelines that will stretch from eastern OH to the Philadelphia area. According to the announcement, the DEP has so far issued 4 “Notices of Violation” and 1 “Consent Order and Agreement” with a fine of $87,600 for “inadvertent returns” (what we call leaks) of drilling mud and water at an underground horizontal directional drilling (HDD) location in Cumberland County, PA. To the best of our knowledge, this is the first we’ve heard of that spill. It was actually a series of spills (or leaks) over a number of different days. All told, some 160,000 gallons of drilling fluids came out of the ground at that location. In addition, the DEP released a table outlining 49 incidents–some just a few gallons, others several hundred (or several thousand) gallons of drilling fluid leaks. We have the list of 49 problem areas below, the details on the Cumberland County leaks, and the DEP announcement…
The “most serious remaining legal challenge” to Sunoco Logistics’ Mariner East 2 Pipeline project is a challenge by the odious Big Green group, the Clean Air Council, based in Philadelphia. CAC claims in a court case in Common Pleas Court in Philly that ME2 violates the federal and state constitutions. The case takes up constitutional claims that have “not yet been addressed in other litigation.” It dawned on us when reading an account of the case and who says what about whether or not Sunoco has the right to use eminent domain and whether or not ME2 is a public utility, is why does the CAC even care? Why are they the ones bringing the lawsuit? After all, pipelines don’t pollute the air! Well, technically that’s not 100% true–pipeline compressor stations do emit some air pollution, depending on how they are powered (diesel engines). But at the end of the day, pipelines pollute the air far less than other forms of transportation, like trucks and trains. How does CAC even have “standing” to bring such a lawsuit? Of course the fact that CAC is litigating is a tip-off that there is Big Green money behind the effort–and CAC is just a tool being used in a wider collusion (conspiracy?) to stop the pipeline…
In December 2015, Pennsylvania’s felony-indicted Attorney General, Kathleen Kane (now gone), brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
Not long after Michael Krancer was appointed Secretary of the Pennsylvania Dept. of Environmental Protection in 2011, he “requested” (which was more order than request) that municipal sewage treatment plants still accepting and processing Marcellus drilling wastewater stop the practice. At the time there were 15 plants accepting Marcellus wastewater. Under pressure from Krancer, they ended the practice in May 2011 (see 
While we wrote about a Penn State research study today that appears legitimate, but seven years too late (see New Penn State Frack Wastewater “Study” Beats a Dead Horse), there is another recently published Penn State study that is also legit that is not yet a huge issue, but certainly has potential to be a big deal. Penn State’s College of Agricultural Sciences has found that invasive, non-native plants are making significant inroads with shale gas development in Pennsylvania, with negative consequences for PA forests. How so? The invasive, non-native plants are hitching a ride on gravel and equipment used to create roadways in forested areas, and once those plants take root, they crowd out local, native plants. The study, titled “Unconventional gas development facilitates plant invasions” and published in the Journal of Environmental Management, concludes that more monitoring and early detection can help put a lid on the problem…
Once again it’s necessary to counter the false narrative in Pennsylvania media that “Pennsylvania is the only state without a severance tax” and “a severance tax will magically fix our over budget mess.” Last week MDN brought you news that 12 so-called Republicans in the PA House were behind an effort to force a vote on a severance tax (see 
Anti fossil fuelers believe they have a new angle in their years-long war to prevent Sunoco Logistics Partners from building the Mariner East 2 twin pipelines across the state: drilling mud spills. When a pipeline company installs a new pipeline, the vast majority of pipe is laid in trenches. However, there are places (creeks, rivers, wetlands, roadways) where you can’t just dig a trench to lay the pipe. In those cases, you drill underground horizontally, something called horizontal directional drilling (HDD). When you drill through rock, you need drilling mud to cool the drill bit as it chews away. Drilling mud is typically bentonite, a non-toxic clay substance used to manufacture things like toothpaste, cosmetics and kitty litter. The only threat from bentonite is that it can smother aquatic life if enough is spilled. Or it can foul a water aquifer–making the water in your well cloudy for a period of time, until it settles. Such an instance recently happened in Chester County, when Sunoco’s drilling for ME2 fouled an aquifer, causing well water for some 15 homes to become temporarily unusable (see 
For the past two years running, the Delaware River Basin Commission, a cooperative organization with five members–Pennsylvania, New York, New Jersey, Delaware and the U.S. Army Corps of Engineers–has received more than half a million dollars per year from PA as its dues to support the anti-drilling organization. The problem is, PA pays its full share, but states like NY and NJ consistently short-change the DRBC. PA Gov. Tom Wolf is a big DRBC fan. Wolf supports the DRBC’s ongoing ban of drilling in the Delaware River Basin–which unfairly denies landowners in Wayne and Pike counties (PA) from benefiting from Marcellus Shale drilling–Wolf’s own constituents. However, the DRBC’s gravy train from PA is now over. Gov. Wolf recently allowed the PA budget to pass, without his signature. Part of the budget bill whacks PA’s contribution to the DRBC to just $217,000 this year–less than half of what is has been getting. The effort to whack the DRBC came from PA representatives in northeastern PA, tired of the ongoing drilling ban. Looks like layoffs are coming to the DRBC. They don’t do a heck of a lot, so why not? Time to toss the bureaucrats out on their rear-ends…
We’re not quite sure how to present this news. In some respects, we want to roll around on the ground laughing. In other respects, we’re angry at the semi “racist” overtones of a new “research” paper. We’ll report, you decide. A couple of researchers from the University of Maryland’s Dept. of Economics have published a so-called “working paper” via the National Bureau of Economic Research that finds a link between fracking and more babies. The paper, titled “Male Earnings, Marriageable Men, And Nonmarital Fertility: Evidence From The Fracking Boom,” says for every extra $1,000 of money earned by those working in the fracking industry, the pregnancy rate goes up by 6 births per 1,000 women. However, marriage rates don’t go up. The researchers say that people in rural pockets of Texas, Oklahoma, California and Pennsylvania who are connected to the fracking industry are “reproducing at a rate that far exceeds the national average.” In other words, those ignorant rednecks can’t get enough sex–IF they have lots of money coming in. However, those same rednecks feel no need to marry the women they knock up. Rednecks find it perfectly acceptable to shack up. That’s the MDN summarized version of the research…
Last November MDN brought you the delicious news that Pennsylvania would shift $24 million away from a boondoggle program called the PA Alternative Energy Investment Act and into a new program called the Pipeline Investment Program, or PIPE (see 
The Gas Technology Institute (GTI), based in Illinois, is doing the Marcellus/Utica region a huge favor. GTI has launched a pre-employment training program to introduce folks to natural gas pipeline operations. The four-week program provides a basic understanding of natural gas, the utility and pipeline industry, and different equipment, procedures and operations used. The program is aimed at students, veterans, displaced coal workers and others with an interest in getting a job with utilities, midstream (i.e. pipeline) companies and their contractors. Here’s the best part: The program is fully funded, so there is no tuition cost for those who qualify. The program is delivered via classroom at three participating colleges: Westmoreland County Community College and Butler County Community College (both in PA), and Washington State Community College (in OH). Here’s the lowdown..
Totally biased, Big Green-backed mouthpiece StateImpact Pennsylvania, funded in part by taxpayers via PBS (a travesty), as well as funded in part by anti-drilling organizations like the Heinz Endowments and the William Penn Foundation (which appear to control StateImpact’s “reporting”), is targeting a PR agency because the agency has the audacity to do good work for Sunoco Logistics and the Mariner East 2 Pipeline project. You see, in liberal anti-drilling land, it’s OK for antis to smear and lie and fabricate all sorts of falsehoods about pipeline projects–but it’s not OK for the object of those smears (i.e. Sunoco LP) to fight back and to present its side of the issue. As soon as you fight back and tell your side of the story, you’re “targeting” innocent people, you’re attempting to bully the little guy. You’re mean. You’re pedaling fossil fuel death. That’s how it works in Big Green land. A recent article on StateImpact PA attempts a smear job on PR agency Bravo Group because Bravo has the gonads to say this on their website: “We’re helping Sunoco Logistics build public and policyholder support for its Mariner East projects, an infrastructure investment of more than $3 billion. The goal: secure regulatory approvals, neutralize opposition and develop the Mariner East projects on budget and without capital losses.” The “neutralize opposition” phrase in particular set off the anti-pipeline crazies, so StateImpact created an entire story focused on that phrase. You know you’re being effective when they attack you with a smear campaign…