Natural Gas Impact Fee Generates Record $279 Million in 2022 for Communities Across Pennsylvania

Over $2.5 billion in funding allocated for critical state programs, local projects since 2012

HARRISBURG, PA, June 20, 2023 — American Petroleum Institute Pennsylvania (API PA) Executive Director Stephanie Catarino Wissman today offered the following statement on the Public Utility Commission’s (PUC) report on impact fee collection and distribution from the taxation of the natural gas industry for the 2022 reporting year:

“Pennsylvania-produced natural gas benefits families and businesses with access to abundant, reliable energy while injecting millions of dollars annually into environmental programs, infrastructure upgrades, public parks and public safety in both producing and non-producing regions alike,” said Wissman. “Our industry has long invested and operated in the Keystone State with the safety, health and economic growth of local communities in mind.”

In 2022, impact tax revenue reached $278.9 million, over $44.4 million more than 2021, and the highest collection since the tax was imposed in 2012.

As outlined in Act 13 of 2012, the impact fee is based on the average annual price of natural gas on the New York Mercantile Exchange (NYMEX) and the age of the well.

The Act 13 tax also increases in accordance with the price of natural gas. The average annual price of natural gas increased to over $6 in 2022, triggering increased payments from producers. Payments are also adjusted for inflation, and this year’s collections meant that producers contributed $34.7 million in increased taxes for our communities.

Impact tax collections were also higher due to the natural gas industry’s investment in new unconventional wells. In 2022, new horizontal wells totaled 574 an increase of 56 wells, or 10.8 percent more, compared to 2021, and the second consecutive year there was an annual increase in drilling.

“The impact tax, coupled with the natural gas and oil industry’s contribution of more than $75 billion to the state’s gross domestic product, underscores the importance of having a robust energy sector and commonsense policies and predictable regulations to sustain it,” Wissman said.

Under Act 13, the PUC is responsible for collecting and distributing the impact fee to state agencies and local jurisdictions.

According to the PUC’s report, Washington, Susquehanna, Bradford, Greene, Lycoming, Tioga and Butler were the “top receiving counties” in 2022, respectively, with impact tax payments to these counties alone totaling more than $43 million.

The American Petroleum Institute-Pennsylvania (API Pennsylvania) is a state affiliate office of the American Petroleum Institute (API). The API represents all segments of America’s natural gas and oil industry, which supports nearly 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our approximately 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 800 standards to enhance operational and environmental safety, efficiency and sustainability.

###