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EQB Publishes Unconventional Well Permit Fee Increase Regulation For Comment

The Environmental Quality Board published notice in the July 14 PA Bulletin inviting comments on proposed regulations increasing permit review fees on unconventional well permit applications by more than two-and-a-half times.

DEP is proposing to increase unconventional well permit fees from $5,000 for nonvertical unconventional wells or $4,200 for vertical unconventional wells to $12,500 for all unconventional well permit applications.

In its background materials on the proposed fee increase, DEP said--

“Although unconventional well permit application numbers are down from original estimates upon which current fees were based, Program obligations and operations remain at least static every year, but more typically expand annually due to the additional well inventory, development activity, and the need for guidance and technical tools to stay current.

“In Fiscal Year (FY) 2015-16, permit application fee and Impact Fee revenues totaled $13.9 million, but costs to run the Program exceeded $21.6 million.

“In FY 2016-17 permit application fee and Impact Fee revenues totaled $15.7 million, but costs to run the Program exceeded $22 million.

“The fee/costs differential has been covered by the Well Plugging Fund reserves.

“The Oil and Gas Program projects further increasing costs with declining revenues in future fiscal years, making the Well Plugging Fund insolvent by FY 2019-2020.

“In response to declining Well Plugging Fund balances, the Oil and Gas Program reduced staff over the past few years from 226 employees to 190 employees today.

“The Oil and Gas Program also reduced operating costs by 38 percent. Operating expenses only account for 10 percent of total program costs, therefore any future cost savings would primarily come from a reduction in staff.

“At the current disparity between fee revenues and expenditures, the Oil and Gas Program would need to reduce its complement by almost 70 additional positions to make up the difference.”

DEP provided the EQB with an overview of the financial condition of the Oil and Gas Program at its April 17 meeting. For additional background documents, visit the EQB’s April and May meetings webpage.

Comments are due August 13. Comments may be submitted on DEP’s eComment webpage, by sending email to: RegComments@pa.gov.

Written comments should be mailed to the Environmental Quality Board, P.O. Box 8477, Harrisburg, PA 17105-8477. Express mail should be sent to the Environmental Quality Board, Rachel Carson State Office Building, 16th Floor, 400 Market Street, Harrisburg, PA 17101-2301.

Questions should be directed to Kurt Klapkowski, DEP, 717-772-2199 or send email to: kklapkowski@pa.gov.

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