A hydraulic fracturing operation. Source: Pixabay

Despite being the most heavily drilled municipality in the state, Cummings Township in Lycoming County received less than half the amount of impact fee dollars distributed to lesser drilled municipalities, according to Public Utility Commission 2018 data.

Cummings Township hosted 248 wells in 2018, the highest well count of any municipality in the state, the PUC reported.

Unconventional wells in Cummings Township produced approximately 72,400 MMcf, according to DEP's 2018 Oil & Gas Report.

Based on the PUC's $3.09/MMbtu average annual price, not adjusted for post-production costs, the gas produced in Cummings Township had a market value of about $218 million.

Yet the municipality received just $536,500 in impact fees. 

Center Township in Greene County hosted 246 wells and received a distribution of $1,163,697. That's more than double Cummings Township's impact fee distribution for two fewer wells.

Unlike a severance tax, the impact fee is a function of the well's age - not the volume of gas produced by it. 

Under the Act 13 bracketed impact fee schedule, older wells pay less. Younger wells pay more. Wells older than 15 years pay nothing. 

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Act 13 Fee Schedule, where the age of the well is the vertical column and the average price of natural gas is the horizontal column. Source: Public Utility Commission

More than half of Cummings Township's wells are 8 years or older, according to PUC's 2018 municipal data. 

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Well counts by municipality. Source: Public Utility Commission

Franklin Township in Greene County hosted 80 wells and received an impact fee distribution of over $1 million, the PUC reported.

Cummings Township hosted triple the number of wells but received 90% less impact fee money than Franklin township.

Franklin Township's unconventional wells produced 47,000 MMcf, according to the Department of Environmental Protection 2018 Oil & Gas Reports. 

Franklin Township's younger wells earned significantly more impact fee dollars despite producing less than municipalities in Lycoming County.

Cogan House Township in Lycoming County hosted 186 wells and received $534,770.50 for 2018. It produced 60,000 MMcf in 2018, according to DEP's 2018 Oil & Gas Report.

Like Cummings Township, Cogan House had wells age into lower fee brackets on the fee schedule.

Pennsylvania is the only major gas producing state without a severance tax, according to State Impact.

Texas has a severance tax rate of 7.5%.


Further sources: DEP's Oil & Gas ReportsPUC Act 13 Distribution Reports