How to Calculate Royalties if Well is Co-Located with Gas Power?
AI data centers are all the rage. The news (local and national) is full of such stories, playing up opposition to data centers. We’ve written plenty about AI data centers on MDN, given the close connection to gas-fired power that’s needed to operate them. We’ve also told you about a developing trend of “behind the meter” gas-fired power plants, built at the same location as a data center. That’s when the data center is built next to a power plant or vice versa. The electricity goes directly to the plant and never flows through the local power grid. Another part of this story is that sometimes the gas-fired power plant that’s on-site powering the data center receives its gas from a well drilled at the same site! The gas flows directly into the gas plant (bypassing gathering pipelines), and the plant produces electricity for the data center. And therein lies a potential, very thorny issue. Read More “How to Calculate Royalties if Well is Co-Located with Gas Power?”
Last October, a seven-member, all-Democrat group of Pennsylvania House of Representatives members announced a six-bill legislative package aimed at regulating the “responsible development” of artificial intelligence (AI) data centers in the state (see 
Constellation Energy Corporation has finalized its acquisition of Calpine Corporation from Energy Capital Partners, becoming the largest electricity producer in the United States, with a generating capacity of 55 gigawatts. This merger integrates Constellation’s zero-emission nuclear fleet with Calpine’s natural gas and geothermal assets. Prior to the merger, Calpine owned 79 energy facilities across the country, generating some 27 gigawatts (GW) of electricity, with a significant number located in the eastern U.S. Many of Calpine’s facilities use natural gas to produce electricity. 
In November, Pennsylvania finally passed a budget—four months late. As part of the deal struck between Democrats and Republicans, the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme was permanently ash-canned (see 
The short answer to the question posed in our headline is, “We sure hope so!” Yesterday, MDN reported that the Pennsylvania Department of Environmental Protection (DEP) has officially adopted a final version of updated Environmental Justice (EJ) regulations (see 
The highly functional and responsible Susquehanna River Basin Commission (SRBC), unlike its highly dysfunctional and irresponsible counterpart, the Delaware River Basin Commission (DRBC), continues to support the shale energy industry by approving water withdrawals and consumptive use for responsible and safe shale drilling. The SRBC also tells shale drillers when to stop withdrawing if low water flow (i.e., drought) conditions exist. Or when a body of water is frozen or blocked by ice. That’s what the SRBC did yesterday. The agency, via its Hydrologic Conditions Monitor, warned shale drillers that, at 58 listed locations (all in Pennsylvania), they must stop water withdrawals until streamflow reaches a specific “trigger flow” target (different for each location) or until the ice thaws. 
Sometimes politics is a game of “chicken” whereby you must keep fighting and wait out the other side when you *know* you are in the right. Such was the case with Pennsylvania Democrats’ insistence that the state join the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme. RGGI aims to force coal- and gas-fired power plants to shut down by making them super expensive to operate. Tax them out of existence on the theory that unreliable renewables like wind and solar would replace them. But Republicans in the PA Senate kept fighting—for seven long years—and finally won (see 
Here we go again. Pennsylvania Democrat State Reps. Chris Pielli, (Chester), and Tarik Khan, (Philadelphia), have introduced a bill that would establish a severance tax on natural gas production. Specifically, the legislation introduces a per-volume severance tax on natural gas operations. The bill would place the new severance tax on top of the existing impact fee (i.e., tax), creating a double tax on the Marcellus industry. Adding a severance tax to the existing impact fee would instantly make PA’s tax on natural gas extraction the highest in the nation. The purpose is not revenue generation but the death of the Marcellus production in the Keystone State. Do the Dems never tire of attacking the Marcellus industry? 
Pennsylvania has a big problem. The state is retiring older coal- and gas-fired power plants faster than it can add new plants. Plus, the state needs to *grow* its electric generation capacity to meet new demand from AI data centers. PA State Senator Gene Yaw has a solution: modify the existing 1971 Economic Development for a Growing Economy (EDGE) tax credit program by adding a provision granting a tax credit for any $400+ million investment in “baseload power generation” (i.e., gas-fired power generation). Yaw wants to make it a no-brainer for power plant builders to make the Keystone State their destination for new projects. 
Pennsylvania assesses an impact fee (PA’s version of a severance tax) on shale drillers, raising revenues that are paid to local municipalities (60% collected) and the black hole of Harrisburg politicians (40%). Yesterday, the PA Independent Fiscal Office (IFO) issued an estimate of how much the impact fee will raise this year, with the funds distributed in April of next year. The IFO says it expects, based on the price of natural gas and the number of new and existing wells, that PA will generate $239.9 million from the impact fee in 2025, a huge $75.3 million (46%) increase from 2024. The average fee per well generated will be $19,056 in 2025, up from $13,560 (41%) in 2024. 
The Pennsylvania Department of Environmental Protection (DEP) published proposed revisions to its Chapter 102 Erosion and Sediment Control permit. The DEP is now accepting comments on the changes until January 20. The primary goal of the revision is “regulatory alignment.” Since the original policy was written in 2012, Pennsylvania passed the Chapter 78a (Unconventional) regulations (in 2016) and updated the ESCGP-4 permit (in 2024). The new draft updates the policy to match these legally binding rules rather than creating entirely new standards. The most significant change coming is an increase in setbacks to”support facilities” from 900 feet to 1,320 feet. 
In October 2024, the Bidenistas announced seven hydrogen hub projects (from 33 finalists) that would receive a collective $7 billion in federal funding (see 
Yesterday, the Pennsylvania Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report for July through September 2025 (full copy below). There were 116 new horizontal wells spud (drilled) in 3Q25, a huge increase of 53 wells (+84%) compared to 3Q24. Natural gas production volume was 1,934 billion cubic feet (Bcf) in 3Q25, up 93 Bcf (+5%) from 1,841 Bcf produced in 3Q24. The average Pennsylvania spot hub price was $2.18, an increase of $0.74 (+51%) from the prior year’s $1.44. All in all, it was a great third quarter for the PA Marcellus. The numbers are going in the right direction. 
Today is data center day here at MDN, given that most of our main stories today revolve around the issue of data centers, facilities full of computers that need enormous amounts of electricity, most of which will be generated by gas-fired power plants. This past summer, Pennsylvania’s newest U.S. Senator, Dave McCormick, convened the Pennsylvania Energy and Innovation Summit in Pittsburgh. Together with the Trump administration, McCormick announced a mind-blowing $92 billion of promised new investment for PA mostly related to AI data centers (see