Decreased demand sinks Pa. drilling impact fee to record low
Friday, December 18, 2020
Pennsylvania’s drilling impact fee will sink to a record low this year due to decreased demand caused by the coronavirus pandemic, according to The Center Square.
The price of natural gas on the New York Mercantile Exchange, which determines the impact fee, declined 21% this year to $2.08, according to the Independent Fiscal Office. The IFO estimates any price below $2.25 would deplete impact fee funding by $53 million.
The impact fee authorizes a tax on unconventional natural gas wells and is distributed across the state’s 67 counties of economic development projects.
Learn more: The Center Square > Pennsylvania’s drilling impact fee sinks to record low amid pandemic losses
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.