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Some 17 shale gas producers took one on the chin recently from the Pennsylvania Supreme Court.
The court ruled against them in a dispute centered on what counts as a “stripper well” or a well that is nearing the end of its life. Such wells are exempt from annual impact fees paid to areas where natural gas drilling is going on.
Drillers argued for a more expansive definition of the term, meaning more wells would be exempt from fees.
The state Supreme Court disagreed.
And that means the companies are on the hook for millions of dollars in unpaid impact fees. Pennsylvania utility regulators are in process of generating bills to the 17 companies that challenged the fees.
We are strong backers of the natural gas industry in Pennsylvania and believe natural gas drilling is among the relatively cleanest forms of energy generation. We are weary about the push for a natural gas severance tax that would amount to a double-tax on an industry that is highly competitive in multiple surrounding states.
But we also are strong backers of a fairly but firmly regulated industry, both environmentally and legally.
We don’t want to see practical environmental regulations skirted in any way.
We don’t want to see the royalties of property owners whose land is being used for drilling bilked by even a penny.
And we don’t want short cuts taken - innocently or purposely - that keep communities from getting the maximum impact fees legislation allows.
Under the assumption the court weighed the dispute fairly, its decision supports these priorities.