Highlights of House Bill 1950
(Amending Pennsylvania Oil & Gas Consolidated Statutes)

On February 8, 2012, the House joined the Senate in passing a bill for the Governor’s signature that would overhaul drilling regulations, impose an impact fee on natural gas wells, and diminish the authority of municipalities to zone and generate revenue from drilling.

MAJOR PROVISIONS

Revenue

• Ties fees to the average annual price of natural gas and yearly Consumer Price Index

• Could generate $190,000 to $355,000 per well during the first 15 years after a well is drilled

• Could generate $3 billion for infrastructure repair over the next decade

Protections

• Requires greater notice to communities prior to drilling

• Provides for disclosure of chemicals used in hydraulic fracking fluid

• Imposes greater penalties for non-compliance; better containment for spills; and increased bonding requirements

• Requires water testing before and after drilling; allows Department of Environmental Protection to presume a well is responsible for water contamination at greater distance from a watershed

Processes

• Counties decide on whether to assess the fee, but a majority of municipalities within the county could override the county decision

• The Public Utility Commission (“PUC”) collects fees, to be split between state and municipalities

• The PUC could deny municipalities a share of impact fees if the latter’s ordinances are stricter than drilling guidelines in the bill

• Counties that decline to allow drilling would not receive a share of drilling fees

Other

The bill contains millions in tax incentives for refineries to locate in Pennsylvania.

Click here for the new House-Senate bill on natural gas drilling impact fees and regulations.

Click here for a link to a Pittsburgh Post-Gazette story on the House passage of the bill.

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