by Othniel T. Degahson, Jr.
The Commonwealth of Pennsylvania’s Department of Environmental Protection is proposing an increase in the price of a shale gas well permit from $5,000 per well to $12,500 per well. The Department of Environmental protection justifies this as a necessity to keep the state’s oil and gas oversight program from operating at a deficit, as permit fee revenue has seen a large decrease since 2014-2015. As the DEP gets a large amount of its funding from permit revenue, they have had to decrease the amount of employees in their oil and gas program.
Permit fees for shale gas wells are paid once at a well’s birth and inspection responsibilities continue until the well is plugged decades later.
The state government under Governor Tom Wolf has known that the DEP needed more money, yet they delayed on permit fee increases due to state budget negotiations that had the possibility of a severance tax on shale, which would have a portion of those funds allocated to the DEP’s oil and gas program.
Industry representatives are generally supportive of a fee increase “to provide DEP’s oil and gas program with the resources it needs” but were blind sighted by the size of the fee increase, especially given what they viewed as excessive amounts of time for the permits to become approved. Marcellus Shale Coalition data shows the average permit wait time increase from 57 days in 2016 to 111 days in 2017.