Lawyers: Impact Fees Could Prove Costly for Gas Industry, State

December 1, 2011
The Legal Intelligencer

Legal Intelligencer (November 29, 2011) –MGKF Partner Todd Kantorczyk commented on the proposed "impact fees" on Marcellus gas wells for the November 29 edition of the Legal Intelligencer. Excerpts are below.

...Todd D. Kantorczyk, a partner at Philadelphia-based environmental firm Manko Gold Katcher & Fox, said that while his firm's practice doesn't directly relate to the impact fee legislation, it is affected to the extent that the fees have the potential to discourage development in Pennsylvania.

Kantorczyk said this scenario is not as far-fetched as it may sound.

"Ohio's saying, 'Hey look, we have a bunch of Utica Shale so come on over to our side. We have a friendlier regulatory environment and you don't have to pay a bunch of impact fees. They're a mess over there [in Pennsylvania],'" Kantorczyk said.

...Kantorczyk admitted he can't pinpoint the threshold beyond which gas companies might simply decide to pack up their drills and move to another state, but said it's "not an invalid concern."

"It's expensive to drill a huge Marcellus well a mile down and a mile out horizontally," he said, adding that if the price of natural gas isn't high enough to support the increased costs of operating in Pennsylvania, drillers may simply decide it's not worth it.

"It's not necessarily a foregone conclusion that Pennsylvania is going to be the natural gas capital of the U.S., or even of the East," he said.

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