Oil and gas permit fees to reap $4.7M a year for PA

June 15, 2014 | By Barbara Vergetis Lundin

The Environmental Quality Board (EQB) has adopted a final rulemaking increasing unconventional well permit fees and went into effect over the weekend, on Saturday, June 14, according to the Pennsylvania Department of Environmental Protection (DEP). The increase is expected to result in additional annual revenue of about $4.7 million, which will support new information technology projects related to oil and gas, including streamlining electronic review, mobile digital inspections, upgrades to reporting systems and modernization of forms and databases. It will also allow hiring of additional Office of Oil and Gas Management staff for inspections, policy and program writing, and permitting.

The final rule fixed the fees for unconventional wells at $5,000 for non-vertical natural gas wells and $4,200 for vertical natural gas wells. Prior to the rulemaking, the fee varied and was charged based on well bore length. As a result, the permit fee for an average unconventional well will increase by about $1,800 per non-vertical natural gas well and $1,300 per vertical natural gas well. The permit fees for conventional oil and gas well operators will remain the same.

"Under the Corbett administration, there has been a strategic, proactive approach to the oversight of this industry," DEP Secretary and EQB Chairperson E. Christopher Abruzzo said. "The efforts to date have been unprecedented, and this fee increase will give us the ability to continue to grow and strengthen our program along with the growing industry."

The DEP's Office of Oil and Gas Management entirely self-sufficient, funded by fees, fines and penalties. The DEP also receives $6 million annually in impact fees paid by operators.

By law, the oil and gas well permit fee must "bear a reasonable relationship" to the cost of administering DEP's oil and gas programs. Department regulations require DEP to evaluate the appropriateness of the fee every three years.

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http://www.fierceenergy.com/story/oil-and-gas-permit-fees-reap-47m-year-pa/2014-06-15