Some oil and gas drillers have been hiding impact fee deductions in their leases, a move that some argue is illegal according to Pennsylvania’s Act 13, a law that established the impact fee in February 2012.

The Pittsburgh Post-Gazette reports that Chesapeake Energy wanted landowners to deduct impact fees from their royalty payments in proportion to the percentage of royalties they were to receive. For example, if a landowner was to receive 15 percent in royalties, that landowner would pay 15 percent of the impact fee.

Impact fees

Impact fees were enacted with the passing of Act 13 in February 2012. The law places a fee on every well dug for gas in the Marcellus Shale. In 2012 drillers paid $45,000 per well.

According to State Impact, the fees brought in $204 million to Pennsylvania in 2011 and $202 million during 2012. 

Some of the money earned with the fees goes to local governments, the remainder of the money is used for statewide programs.

The fees brought $14 million for conservation and environmental projects in 2012. 

Chesapeake isn’t the only company

According to the Post-Gazette, Chesapeake Energy isn’t the only company that has inserted impact fee deductions into leases.

Read it:

“Chesapeake isn’t the only company whose leases aim to deduct fees from landowners’ royalties. Chevron has had similar language in its leases since at least October 2011, before Act 13 was passed. The California-based company’s leases allow it to “deduct from payments … lessor’s pro-rata share of any taxes, charges or fees imposed by any government body.””

» Via: Pittsburgh Post-Gazette › Marcellus gas leases pushing impact fees on landowners