API - American Petroleum Institute

06/14/2021 | Press release | Distributed by Public on 06/14/2021 11:37

Over $2 Billion in Natural Gas Revenues Generated from Existing Impact Taxes in PA, Bolstering Communities, Benefitting All Pennsylvanians

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HARRISBURG, PA - June 14, 2021 - American Petroleum Institute Pennsylvania (API PA) Executive Director Stephanie Catarino Wissman 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 2020 reporting year:

'The impact tax has generated new revenue - totaling more than $2 billion since 2012 - for a wide variety of critical transportation infrastructure improvements, public safety projects, water and sewer upgrades and environmental conservation programs, such as Growing Greener grants, for Pennsylvania and its 67 counties,' said Wissman.

In April, the state Department of Community and Economic Development announced a total of $15 million in impact tax funding from last year would support 135 new projects, including flood mitigation; greenways, trails and recreation; sewage facilities; orphan or abandoned well plugging; and watershed restoration and protection.

'This report shows that, despite difficult market conditions over the past year, the natural gas industry has continued to contribute millions in essential revenue to our state and local governments while meeting the high demand for affordable, reliable energy,' said Wissman.

As outlined in Act 13 of 2012, impact fee revenue depends on the average annual price of natural gas on the New York Mercantile Exchange (NYMEX), which dropped in 2020 compared to prior years.

Prices declined in 2020 as the result of reduced demand for natural gas due to a mild winter and the COVID-19 pandemic, according to the state Independent Fiscal Office's June 2021 Impact Fee Update and Outlook. The U.S. Energy Information Administration also reported that national consumption of natural gas declined by 2 percent in 2020, the first annual decline since 2009.

'Like many industries, the energy sector was not immune to the economic impacts of the pandemic,' said Wissman. 'Nevertheless, Pennsylvania's abundant supply of natural gas presents a vast opportunity to continue utilizing these fees for infrastructure and environmental programs throughout the Commonwealth. Combining the billions in impact tax revenue with the billions in other business taxes and investments made by the industry, natural gas development is providing tremendous benefits to communities across the state, even in areas without drilling activity, and boosting our economy.'

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

API Pennsylvania is a division of API, which represents all segments of America's oil and natural gas industry. Our 600 members produce, process, and distribute most 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. The industry supports more than 10 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.