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Thursday, February 12, 2009


Proposed Sliding Scale Structure Better Reflects DEP’s True Cost of Permitting, Inspection Work

HARRISBURG – Beginning Feb. 14, the public can review and comment on a proposal that will better enable the Department of Environmental Protection to cover the increased costs and staffing needs for overseeing Pennsylvania’s booming natural gas industry.

DEP hopes to replace the $100 flat fee for drilling permits—a fee that has not been increased since 1984—with a sliding scale based on well depth and type. The change will help ensure adequate funding to cover program expenses for permit reviews and well site inspections.

“Pennsylvania’s oil and natural gas industry is booming with a record 7,924 permits issued and nearly 4,200 new wells drilled in the past year, yet the cost of a drilling permit has not changed in a quarter century,” Environmental Protection acting Secretary John Hanger said. “Natural gas exploration, particularly in the Marcellus Shale, promises billions of dollars in investment and economic growth for the commonwealth.

This proposed new permit fee structure will allow DEP to hire the staff to help balance this historic opportunity with our responsibility to closely monitor this activity to protect our land and water resources.

“Our goal is to establish a new permit fee that better reflects the true cost of providing timely review of new permits and inspecting well sites and drilling activities.”

The proposed fee structure will be published in the Pennsylvania Bulletin on Feb. 14, beginning a 30-day public review and comment period. Following review and possible revisions based on comments received by the public, the regulatory proposal will be presented to the Environmental Quality Board for final approval later this year.

On Dec. 16, the Environmental Quality Board approved DEP’s request to impose new fees for Marcellus Shale drilling permits that will replace the flat $100 permit fee with a variable fee structure based on well depth

The proposed fee structure sets the base permit cost for vertical wells up to 2,000 feet deep at $250, with increases of $50 for each 500 feet of depth from 2,000 to 5,000 feet. An additional $100 charge will be levied for each 500 feet of well drilled beyond 5,000 feet. Horizontal wells up to 1,500 feet long would have a base permit cost of $900, with an additional $100 for every 500 feet of well bore drilled past 1,500 feet.

Permit applications for vertical wells with a well bore length of 1,500 feet or less for home use will have a flat cost of $200. The fee increase will also allow the department to hire additional staff in Meadville, Pittsburgh and Williamsport to process permits and monitor drilling activities in the north-central and northeastern regions of Pennsylvania.

The state’s Oil and Gas Act established a $100 permit fee in 1984 and gives the department the authority to increase that fee to cover the cost of regulating the drilling industry.

That proposal is currently before the House and Senate Environmental Resources and Energy committees for review and approval and will be considered by the Independent Regulatory Review Commission at its March 19 meeting.

For more information, visit www.depweb.state.pa.us, keyword: Public Participation.


Anonymous said...

Go ahead raise your fees...I got my permit and am ready to go as soon as spring gets here!

Anonymous said...

Hmmmm from a permit fee of $100 to a fee of 250 base plus 300 to go to 5,000 feet is $550. Thats not an increase thats rape! No wonder the drillers have left the state.
Again Govt. get involved and they get greedy.

Solomon's words for the wise said...

You complained when they were not processing permits fast enough, they hired more people to process the permits with our tax money, at present they do not tax production or oil & gas rights in PA. It would be a shame if these drilling companies had to pay some of the costs involved with their operations. A souvenir stand along the highway pays more taxes than a $3 million dollar gas well. The gas is there, they will drill, and they will make billions. I don't want to have to pay their taxes while I'm cutting wood for my wood stove.

Anonymous said...

I will have a gas rig on my land AND cut wood for my wood boiler...the wood heat is so much more constant and warmer with my radiant heat system and it is good exercise!

The less gas I use the more royalties I will receive, and do not forget I will have to pay taxes on that money too! BUT atleast I will have natural gas as my backup if I run out of wood and visa versa.