Fee hike will put more gas well inspectors in field

BY ROBERT SWIFT
Times Shamrock Writer

State environmental regulators plan to hire several dozen new staffers for gas and oil regulatory duties with revenue coming from a permit fee hike for deep Marcellus Shale wells.

The hires will include gas well inspectors and air quality and water quality specialists and supervisors, Department of Environmental Protection Secretary Christopher Abruzzo told lawmakers last week.

They will be based in the Marcellus drilling regions with an undetermined number in Northeast Pennsylvania.

Currently, DEP’s Oil and Gas Program is staffed with more than 200 employees. Of these, 83 are well inspectors. The additional staffers are needed to provide oversight in coming years for a gas industry that is expanding and maturing with more wells drilled each year and pipelines being developed, said Abruzzo.

“We have enough inspectors in the field right now,” he said.

The oil and gas program is underwritten mainly with revenue from well permit fees. It’s also supported with fines and penalties collected from violations of state drilling laws and a share of annual impact fees paid by gas drillers.

DEP is seeking a fee hike for the first time since 2009 because of several factors coming together.

First, the number of well permit applications have decreased since 2010 so less revenue is coming from that source, according to agency documents.

Meanwhile, DEP has taken on new duties with the impact fee law in 2012.

“The increase in workload coupled with declining permit revenue creates a situation where the incoming permit revenue is insufficient to cover the current operational costs of the program. … As the oil and gas industry continues to expand in Pennsylvania, additional department staff and technology will be critical to ensure the department’s proper oversight of the industry,” according to the agency documents.

DEP hopes to bring in $5 million by changing the Marcellus well permit fee from a sliding fee based on well bore length to a fixed fee. The new fee would be $5,000 for horizontal wells and $4,200 for vertical wells.

Fees for conventional shallow gas wells will remain the same.

The fee increase was approved last month by the Environmental Quality Board and goes next to the Independent Regulatory Review Commission and the House and Senate environmental committees.