Ruling on wells helps boost 2018 impact fee collection
Jan 28, 2019, 1:37pm EST
This article reposted from the Pittsburgh Business Times
Marcellus Shale Gas Drilling Tower
The natural gas drilling impact fee is set to reach a record for 2018.
The Public Utility Commission’s pending collection of impact fees will be boosted this year by about $22.3 million by a state Supreme Court ruling over the status of a certain type of well that had been disputed by some natural gas drillers.
The recent ruling in the Snyder Bros. vs. Pennsylvania Public Utility Commission ruling adds so-called stripper wells to impact-fee collections. Stripper wells are oil and natural gas wells that are nearing the end of their operating life, and some drillers said they shouldn’t be counted for impact fees. That was settled earlier this month.
This contributed to what the Independent Fiscal Office estimates will be a new record for annual collections of $246.9 million for 2018 natural gas activity, up $37.4 million from 2017. Counties, municipalities and a housing fund will receive the most with $137.2 million, followed by $91.5 million for the Marcellus Legacy Fund, $10.5 million to state agencies and $7.7 million for conservation districts.
Beyond the contribution from delayed well payments, another $15.1 million was tied by the IFO from the 779 new wells spud in 2018.
“Pennsylvania’s tax on natural gas, the impact fee, is working as designed and an important revenue source for statewide environmental and conservation programs, as well as communities in all 67 counties,” said David Spigelmyer, president of the Marcellus Shale Coalition.
Revenues for the past five years from the impact fee:
2014: $223.5 million
2015: $187.7 million
2016: $173.2 million
2017: $209.5 million
2018: $246.97 million
Here’s the list of estimated payments by driller, according to the PUC earlier this month.
Paul J. Gough
Pittsburgh Business Times
This is a substantial report on the future of the Petrochemical Industry in the Tri-State area of Ohio, Pennsylvania, and West Virginia. This industry provides fantastic opportunities for economic growth in these three states. We must identify funding to make this happen.
How Shell plans to use rail and road to capitalize on opportunities in Beaver County
Nov 27, 2018, 1:43pm EST
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PAUL J. GOUGH
The quench tower almost completely in place around noon.
Shell Polymers — the division of Royal Dutch Shell (NYSE: RDS.A) that will market and ship the polyethylene from the company’s new plant in Beaver County — counts location and transportation opportunities as major competitive advantages over its competitors.
The bulk of the country’s petrochemical industry is based along the Gulf Coast, far away from the shale fields of Pennsylvania. But it’s also more expensive to ship the polyethylene, the building blocks of plastics products, to the customer base in the Midwest and Northeast.
That’s where the Shell plant offers reliably sourced polyethylene and a more nimble transportation infrastructure, said O. Chris Jackson, production unit manager for logistics at Shell Polymers. Jackson said the Shell plant will be within 700 miles of the customer base and will be connected not only by rail but also by road.
“That puts us closer to our customers,” Jackson said.
It means a shorter supply line but also, in the case of pipeline or railroad disruptions, it positions the polyethylene that comes out of Beaver County to be a quicker alternative than supply lines that depend on rail access. Jackson said customers said it could take between four and five weeks to secure a rail car, which forces petrochemical plants to curtail or shutdown production.
That’s where Shell’s new system works well. While the bulk of product transport will be by rail, Shell built 42 loading bays on the Potter Township site that will allow it to offer customers the ability to get the polyethylene by truck in only a day or two. That will allow Shell’s manufacturing customers to not be constrained by traditional supply delays, thanks to the location of the plant and the ability to ship by either road or rail.
“This kind of operation can flourish in this region,” Jackson said. Jackson spoke at the Tri-State Infrastructure Summit in Cranberry Township.
Shell has made significant investments in both rail and road, even moving a state highway that would have cut through the site of the plant.
Paul J. Gough
Pittsburgh Business Times