Impact Fee and Forced Pooling Recommended by the Marcellus Shale Advisory Commission

This is an important day for everyone who has an interest in Marcellus Shale development. Pennsylvania Governor Tom Corbett’s Marcellus Shale Advisory Commission is completing its final meeting as I type and has unanimously voted to approve a report with a series of recommendations, some of which are destined for controversy.

A link to a live blog following the meeting can be found here.

The debate that we have seen in the Commonwealth over the last year regarding a severance tax and the proposed impact fee has received national attention. Last month the Governor signed a state budget with the impact fee endorsed by leading state republicans noticeably absent. At the time, Corbett stated he intended to wait for the report from the Advisory Commission. That wait is now over as the final report will be released next week and will include the Commission’s recommendation that the state adopt some form of an impact fee. Debate over the details may continue, but it is apparent to this Commentator that an impact fee is on its way.

As contentious as the impact fee has been, this controversy will pale in comparison to that we will see over the Commission’s recommendation that the state adopt a forced pooling law. Whether the state will adopt this recommendation is less clear – it would involve some back-pedaling from the Governor, who has previously stated that he opposes forced pooling.

We can also expect debate over the Commission’s vote to allow further leasing of state forests for natural gas drilling.

It will be interesting to follow the discussion of these issues over the coming weeks and months – stay tuned.

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