Due to the decline in natural gas prices in 2020, Pennsylvania will distribute nearly $46 million less in natural gas impact fees to the state’s counties and municipalities this year. That’s terrible news, especially for rural Towns ships in Southwestern Pennsylvania’s Marcellus shale-rich districts, which are already dealing with pandemic-related income losses. The Towns ship will receive around $129,433 in Act 13 impact fee money, roughly $67,000 less than last year.
Mark Petros, chairman of the Sewickley Towns ship supervisors, said, “It’s tighten your belt time.” Like many other cities, Sewickley spends the money on paving roads, filling potholes, and purchasing anti-skid material to sprinkle on icy roadways. Municipalities like Sewickley, which benefited from a surge in natural gas output, which resulted in increased impact fee money, will experience an extensive reduction in their allocation this year, based on 2020 pricing and production.
The state Public Utility Commission announced Monday that $146.2 million in impact fees on natural gas producers would be dispersed beginning in July. This is $46 million less than what was received from 2019 output. Natural gas prices influence the amount of money the state obtains from natural gas producers. According to the US Energy Administration, which analyses natural gas production and pricing, the average natural gas price year 2020 was $2.05 per million BTUs. It touched rock bottom at $1.66 per million BTUs in June 2020.
The mild winter of 2020 reduced demand for natural gas as a source of heat, and later the economy’s covid-related constraints reduced natural gas output and consumption. From the 2020 reporting year, county and municipal governments directly impacted by drilling will receive $71.5 million. Another $51 million will go to the Marcellus Legacy Fund, which will be used for environmental, roadway, water, and sewage projects, as well as greenway rehabilitation.