Those of us who were working on oil and gas law way back in 2008 remember the heady days of the Marcellus gas leasing boom. Before the major oil and gas companies had shown any interest in the Marcellus, a number of smaller, independent drilling companies were leasing acreage in the core areas as rapidly as possible. The New York Times quoted this Commentator describing the leasing land grab as a “feeding frenzy.”

Thanks to the efforts of the Penn State Cooperative Extension, many landowners were aware of the potential pitfalls in the leasing process and realized that the leasing frenzy created an opportunity to negotiate favorable lease terms. Landowners in the hot spots were often presented with offers to lease from multiple companies, each trying to establish a dominant leasehold position. It was this intense competition for prime Marcellus acreage that placed educated landowners in a fortunate posture from which to negotiate, and those of us working with landowners became accustomed to seeing long lists of landowner-friendly addenda attached to gas leases.

The Times They Are a-Changin’

At this point in 2012 several long-term trends have become apparent that are significantly impacting Marcellus landowners.  The large majority of the land available in the prospective areas of the Marcellus has been acquired by the gas companies; the leasing boom has come and gone. The major oil and gas companies recognize the critical importance of unconventional shale gas for our nation’s energy future and have invested heavily in Pennsylvania Marcellus, with the result that various sections of the core acreage are now held by a handful of dominant players. 

A very significant result of the Penn State educational blitz was that landowners realized the importance of requesting a gas lease with a straight five-year term, with no option to extend the lease for an additional five-year term. In order to keep these leases from terminating, the gas companies need to get the acreage drilled and begin producing natural gas. A key goal of the gas companies now is to keep the acreage that is leased “held by production” so the five-year leases don’t expire.

Residents of the core areas of the Marcellus are living with the results of the race to hold land by production. Drilling activity has taken off in the years following the leasing boom and as wells are completed and go online, natural gas production from unconventional shale has increased significantly. However, as the supply of methane natural gas has increased, the price of natural gas has consequentially dropped. This trend toward lower prices for “dry” natural gas has occurred just as the price of oil and natural gas liquids has spiked.

The Impact on Pennsylvania Landowners

How are these long-term trends impacting Pennsylvania royalty owners? What we see now are strategies from the gas companies to hold more land with less drilling. The standard 640 acre production unit seen in earlier leases has been abandoned for much larger pooled production units, in some cases over 1,200 acres. As the size of the production unit increases, more land is held by production and fewer leases will expire, but each landowner's proportional share of royalties from the unit is diluted.

Landowners with expiring leases who hope to sign a new lease face a vastly different leasing environment. Competition for new leases is no longer the norm. Many landowners will instead be dealing with the one gas company that holds the dominant position in their area. And without competition for leases, landowners will be in a far less advantageous position from which to negotiate. Provisions that landowners and their lawyers have become accustomed to seeing in leases, such as a Pugh clause or royalties paid without deductions for post-production costs, may be difficult to obtain.

Some property owners with land outside the core areas for Marcellus development may find no interest in leasing their acreage. Although the gas companies were willing to lease over a broad area during the height of the leasing frenzy, leasing activity now is much more targeted in the areas where drilling activity is focused.

In fact, Marcellus acreage no longer appears to be the hot commodity. As the market has been flooded with unconventional shale natural gas and the price has plummeted, the gas industry has shifted focus to areas such as Ohio and North Dakota where higher priced oil and “wet” gas with associated liquids such as butane or propane may be found.

A Bright Future

But there may be a silver lining to this dismal cloud of bad news for Pennsylvania royalty owners. Although low-priced natural gas may dim the prospects for Marcellus development in the short-term, the big picture over the long-term looks increasingly bright. We are just beginning to see a huge shift in national policy away from coal and imported oil toward use of domestic natural gas for electricity production and even natural gas vehicles. Energy independence for our nation finally appears within reach. Ultimately, what is driving this shift is cheap natural gas.

Pennsylvania royalty owners need to keep their chin up and look forward to the day when Marcellus natural gas is powering our nation’s energy future.

In an earlier post on this blog I discussed a very significant decision from the Pennsylvania Superior Court in Butler v. Charles Powers Estate, 29 A.3d 35 (2011). A more in-depth analysis of the case written by this Author appeared in the March/April edition of The Pennsylvania Lawyer, a magazine published by the Pennsylvania Bar Association as a service to its members and the legal profession at large.  A copy of the article, Opening Pandora's Box? Calling Shale Gas Rights into Question, can be found here.

The uncertainty generated by the Superior Court decision will hopefully be resolved as the Pennsylvania Supreme Court has now granted the Butlers' Petition for Allowance of Appeal in the case. The issue that the court will review, as stated by the petitioners, is:

In interpreting a deed reservation for “minerals,” whether the Superior Court  erred  in  remanding  the  case  for  the  introduction  of  scientific and historic evidence about the Marcellus shale and the natural gas contained  therein,  despite  the  fact  that  the  Supreme  Court  of Pennsylvania  has  held  (1)  a  rebuttable  presumption  exists  that parties intend the term “minerals” to include only metallic substances, and (2) only the parties’ intent can rebut the presumption to include non-metallic substances.

The Order granting the Petition for Allowance of Appeal may be viewed here.

This case has generated tremendous interest among the oil and gas attorneys in the Commonwealth and has even been reported in the mainstream-media nationally. We will continue to follow developments in this case and post updates here at the Marcellus Shale Law Monitor – stay tuned.

Jeff Marshall is the founding attorney of the firm where I am employed, Marshall, Parker & Associates. He has long been regarded as one of the preeminent elder law attorneys in Pennsylvania and is well known as a passionate advocate for the rights of the elderly. In addition to his work representing older clients, Jeff has always been active with research and writing and he now maintains a high-profile website, the Marshall Elder & Estate Planning Blog.

In a recent blog post Jeff discussed proposed changes to the Estate and Gift Tax laws in the 2013 Obama Administration budget. These changes include lowering the Federal Estate Tax exclusion to $3.5 million and the Gift Tax exclusion to $1 million. In addition, the proposal would eliminate valuation discounts for family-controlled entities, place limits on the use of intentionally defective grantor trusts and require a minimum ten year term for grantor retained annuity trusts (GRATS). The blog post can be viewed here.

Although it is uncertain if any of these proposals will move forward in light of the gridlock on Capitol Hill, the potential exists that some of these provisions could become law. Jeff concludes that “we could someday look back on 2012 as the last golden year for wealth transfer opportunities.”

The possibility that some these proposals could be enacted is very significant for Marcellus landowners. While we see drilling rigs moving from Pennsylvania to Ohio and rock-bottom low prices for natural gas, landowners may conclude that it is unlikely that they will ever realize royalty wealth. Nevertheless, Marcellus gas rights have value today and that value is very likely to appreciate tremendously over the coming years. Despite the uncertainty about when natural gas development may occur, 2012 still presents a fantastic opportunity to plan for those landowners who own significant Marcellus acreage.

In a previous post I discussed the NARO-PA Convention being held in State College next week. Marshall, Parker & Associates will have an exhibit table at the Convention and Jody Lose, Melissa Bottorf and I will be attending. Please stop by to see us and discuss what your royalty planning options may include.

The 2012 Convention of the Pennsylvania Chapter of the National Association of Royalty Owners is being held at the Ramada Conference Center in State College on March 22 and 23.  This is a great event with a great lineup of speakers discussing topics that will be of interest to royalty owners in the Pennsylvania Marcellus and Utica shale areas. More information on the convention can be found at the NARO-PA website here.

I am proud to be a member of NARO and have enjoyed serving as Secretary for the Board of Directors of the Pennsylvania Chapter.  For those who aren’t familiar with NARO, it’s the only national organization dedicated solely to representing the interests of oil and gas royalty owners.

The mission of NARO is to encourage and promote exploration and production of minerals in the United States while preserving, protecting, advancing and representing the interests and rights of mineral and royalty owners through education, advocacy and assistance to our members, to NARO chapter organizations, to government bodies and to the public.

If you are a landowner in the Marcellus, or have an interest in natural gas development in Pennsylvania, please consider joining NARO and attending the convention. See you there!

In an earlier post on this blog I had expressed confidence that the Pennsylvania legislature would enact a Marcellus drilling impact fee. Although the legislative negotiations have taken longer than I had anticipated, the Pennsylvania House and Senate have now passed House Bill 1950 and the bill was signed by Governor Tom Corbett last week. The legislation imposes an annual impact fee on each natural gas well drilled into an unconventional formation such as the Marcellus or Utica shale, and also significantly updates the existing Oil and Gas Law.

Reaction to the bill that was passed has been mixed. Some organizations with an environmental agenda have labeled the legislation a gift to the oil and gas industry. Other commentators have suggested that the new fee structure, coupled with current low natural gas prices, will drive oil and gas development elsewhere. Aside from the actual impact fee, perhaps the most controversial aspect of the new law is a limitation on the ability of local municipalities to regulate drilling activity and enact zoning ordinances.

An interesting twist added by the legislature is tying the revenue that will be generated to the current price of natural gas. For instance, if the price of natural gas averages less than $2.25, the impact fee will be $40,000 for the first year of the well. On the other hand, if the annual average price of natural gas is $6.00 or more, the first year impact fee will be $60,000. With the recent rock-bottom prices for natural gas, it seems likely that the revenue from the impact fee will be on the lower end of the scale. Sixty percent of the revenues will be distributed to counties and municipalities where wells are located, with the remainder going to the state.

One of the more divisive issues regarding the legislation was who would have the authority to levy the fee. The final version of the legislation requires that the fee be adopted by individual counties, rather than the state government. If a county should choose to not enact the fee, an affirmative vote by fifty percent of the municipalities in the county will override the decision. The legislators’ efforts notwithstanding, Grover Norquist still calls the fee a tax.

Viewed from the perspective of the local landowner, some of the more important provisions in the new legislation are as follows:

Setbacks

The previous regulations require that oil and gas wells be located at a minimum distance of 200 feet from an existing building or water source. Section 3215 of H.B. 1950 increases the minimum setback to 500 feet for an unconventional well, unless the owner of the property consents to a reduced distance. Unconventional wells must also be located at least 300 feet from any spring or other body of water.

H.B. 1950 does, however, provide an exception to the minimum distance requirement when the owner of the building or water well does not give consent and the distance restriction would deprive the owner of the oil and gas underneath the property of the right to share in production. A similar exception appeared in the previous version of the Oil and Gas Law, which provided that a well operator may be granted a variance from the distance requirement upon submission of a plan with additional measures to protect the property. But while the previous regulation states that the well operator may be granted a variance, H.B. 1950 provides that the operator shall be granted a variance. Time will tell whether the change from the permissive “may” to the mandatory “shall” will prove to be significant.

Water Testing

As anyone who even casually scans the news is aware, there have been ongoing concerns about the potential impact on water supplies from Marcellus drilling. Pennsylvania has provided an important protection for landowners with a presumption that a well operator is responsible for water pollution if the water well is within one thousand feet of drilling and the pollution occurred within six months of the completion of operations.

H.B. 1950 significantly adds to this protection by extending the presumption to water wells within 2,500 feet of unconventional drilling operations and increasing the period in which the presumption applies from six months to one year.

Hydrofracturing Disclosure

In an effort to allay concerns about hydraulic fracturing some operators in the oil and gas industry have moved to voluntarily disclose the contents of fracking fluids. H.B. 1950 now requires that a well operator disclose the identity of the chemicals used in hydraulic fracturing on a public chemical disclosure registry. This legislative mandate that the industry disclose the details of fracturing fluids is one of the provisions in the new law that has received the most positive media attention.

But the legislature has also provided the industry with an exception to the rule requiring disclosure if “the specific identity of a chemical or the concentration of a chemical, or both, are a trade secret or confidential proprietary information.” In that case, the operator need only disclose the chemical family or similar description associated with the chemical.

It may be hoped that the oil and gas operators in Pennsylvania will see the public relations benefit from transparency in hydraulic fracturing operations and will not take advantage of the exception to the disclosure rule generously provided to the industry by the Pennsylvania legislature.

Local Municipal Regulation

As discussed above, the restriction on the ability of local municipalities to enact zoning ordinances that regulate where oil and gas drilling activities may occur is probably the most controversial aspect of H.B. 1950. The bill explicitly preempts all local ordinances regulating oil and gas operations and requires that all such ordinances allow for reasonable development of oil and gas resources.

The oil and gas industry has consistently argued that it needs uniformity in terms of regulation across the state; adapting to a patchwork of varying regulations from different municipalities would significantly add to the cost of operations and may drive the industry to shift development to areas with lower operating costs. Governor Corbett and the legislature clearly take this concern seriously and the result is that Section 3304 of H.B. 1950 requires that local ordinances allow oil and gas activities, other than activities at impoundment areas, compressor stations and processing plants, as a permitted use in all zoning districts.

Section 3304 also provides that a municipality may not impose requirements or limitations on oil and gas operations that are more restrictive than those placed on other industrial activities.

The final version of this legislation appoints the state Public Utility Commission as the arbiter of disputes between local governments and operators as to whether an ordinance violates the requirements of Section 3304.

The bill appears to be designed to discourage such disputes. Section 3307 provides that a court can award attorney fees and costs if it finds that a municipality enacted an ordinance with willful disregard for the requirements in H.B. 1950. The municipality will also be ineligible to receive funds collected under the impact fee until it amends or repeals the ordinance.

Conclusion

Pennsylvania has been considering some form of a severance tax or impact fee since the Marcellus boom began. H.B. 1950 is the product of extensive negotiations and reflects a compromise between the various competing interests. Though the legislation leaves room for improvement, in the opinion of this Commentator it is nevertheless a significant step in the right direction.

I have met Dr. Sterngold and respect his opinion.

With natural-gas drilling booming in Pennsylvania's Marcellus Shale region, state lawmakers might seem to have chosen the perfect time to impose an impact fee on gas producers. The new fee has been projected to generate $191 million in retroactive 2011 fees, $220 million in 2012, and larger amounts over time.

Unfortunately, though, the legislature may have procrastinated for too long. Natural-gas prices have plummeted from their lofty levels of a few years ago, squeezing industry profits and forcing producers to start scaling back their activity. As a result, the impact fees may generate less revenue than expected and induce some cash-strapped drillers to shift resources to other states.

After years of avid promotion of natural-gas development by the Marcellus Shale Coalition, the industry's chief lobby, it's hard to imagine a slowdown in drilling. As part of its campaign to win public approval, the coalition funded a series of economic impact studies by Penn State researchers. The three studies, released in 2009, 2010, and 2011, forecast increasingly larger jumps in employment, incomes, and tax revenues as a result of shale exploitation. In the most recent study, released last summer, the authors concluded that "the outlook for Marcellus production is remarkable."

While the Penn State researchers were preparing their reports, however, evidence was mounting that the industry was in trouble. From an average of $8.85 per million British thermal units in 2008, natural-gas prices fell sharply to $4.39 in 2010, and $3.94 in 2011. Last month, prices dropped below $2.50, and they are expected to stay under $5 for another decade.

Signs of a slump

Lower gas prices mean smaller profit margins. So it's no surprise that gas producers are scaling back their Marcellus Shale drilling, putting growth on hold, or moving resources to states with lower costs and more deposits rich in oil and other liquid fuels. The companies doing so include Talisman Energy, EQT Corp., Consol Energy, and Occidental Petroleum Corp. Chesapeake Energy, which has the largest Marcellus Shale holdings in the state, has announced the most drastic cutbacks in Pennsylvania and elsewhere.

In a recent Inquirer op-ed, Louis D. D'Amico, president of the Pennsylvania Independent Oil & Gas Association, explained that "low natural-gas prices are bad for producers, many of whom can't continue to spend money on wells that aren't profitable under current and foreseeable conditions. In the coming months, Pennsylvanians can expect to see fewer ... wells drilled."

There have been signs of a coming correction for years. In May 2010, energy consultant Andrew Weissman observed in the American Oil and Gas Reporter that falling natural-gas prices had already caused markets to tumble, warning: "Current price levels will inevitably lead to further cutbacks in drilling." A year later, the Wall Street Journal reported, "With natural-gas profit margins all but disappearing, companies are cutting back on new gas drilling."

The 2009 Penn State study noted that "a prolonged slump in prices could dampen" Marcellus Shale activity. By the time last year's report was released, the slump was obviously in progress, but the researchers made their most optimistic forecast to date. They should have made the possibility of a lull clearer - even if that's not what the Marcellus Shale Coalition wanted to hear.

Boom and bust

It's too early to say how long a gas slowdown could last or how it will affect drilling impact fees. But even if natural-gas development grows at a slower rate than anticipated, people may suffer from having overinvested. Rural residents who decided to fix up family farms rather than move to smaller homes may be hard-pressed if their gas leases aren't renewed. Small-business owners who expanded their operations to serve gas companies may find they can't pay their bills. Let's hope the Marcellus Shale Coalition's relentless boosterism didn't exacerbate a climate of overspeculation and make the pain worse.

In the long run, natural-gas development may be good for Pennsylvania, especially compared with the economic stagnation we lived through before the drilling started. But industries that grow too quickly and then pull back painfully create a toxic boom-and-bust cycle. Pennsylvania needs an energy industry that is economically and environmentally sustainable, guided by academics who provide prudent advice and careful analysis. That would do more to safeguard our communities and natural resources than any amount of impact fees.

A link to a video recording of the panel discussion can be found here.

PAR recognizes that Marcellus development is having a significant impact on the business practices of its members. Working with property subject to an oil and gas lease raises concerns for both the buyers and sellers of real estate and PAR is committed to educating its members about the issues that realtors in the Marcellus region need to have on the radar.

Ensuring that a buyer of real estate is fully informed about the property being purchased is critical and today that clearly includes knowing the status of the gas rights and any oil and gas lease covering the property. Buyers will need to know about the specific rights granted to the gas company in the gas lease, which means that buyers must have a copy of the signed lease available for review. However, buyers of real estate cannot in most cases obtain a copy of the lease from the county recorder of deeds because the gas companies don’t typically record the actual lease; instead, the industry practice is to  record an abbreviated memorandum of lease that doesn’t included all of the information necessary for a buyer to review. Mr. Evenhuis has extensively researched the legality of this practice and discussed his concerns at the PAR meeting.

The primary focus of my discussion was the impact of various terms in a lease on a buyer’s ability to use and enjoy the property, and the property value. The gas lease will in most cases give a very broad grant of rights to the gas company, including the rights to drill wells, construct roads, place pipelines and related facilities, to use the property for underground gas storage and to drill wells for disposal of waste fluids. In many cases the seller will have worked with a qualified attorney to restrict this broad grant of rights, but a buyer of property will obviously need to know these details before entering into an agreement of sale.

There was also a discussion of the general trends that we see in Marcellus development today.

It was a pleasure presenting with Hank Lerner and David Evenhuis and I commend the Pennsylvania Association of Realtors^®  for its educational efforts on behalf of its members.

@NY1weather: Hot in the city? Since 1996, we've broken only 1 record low at Central Park while setting 48 record highs.

Though it’s not my intention to jump into the climate change debate, this struck me as interesting fact which highlights the importance of reducing greenhouse gas emissions. And this naturally leads an oil and gas attorney to reflect upon the advantages of using natural gas for energy production, rather than coal.

Those who follow issues related to Marcellus development are probably familiar with the conventional wisdom that use of natural gas for electricity production results in about fifty percent less greenhouse gas emissions than the use of coal. Aside from the reduction in emissions of mercury, sulfides and soot from coal, the substantial improvement in terms of climate impact has been touted as one of the important benefits resulting from development of domestic natural gas resources.

Or so we thought, until the release of a study by Robert Howarth from Cornell University which reached the surprising conclusion that unconventional natural gas had a larger greenhouse gas footprint than coal. This study looked at the lifetime emissions resulting from a hydraulically fractured gas well and was based on a series of assumptions, including a projection that up to eight percent of the methane from an unconventional gas well leaks into the atmosphere. That would be a very significant factor in the analysis because methane is a more potent greenhouse gas than carbon dioxide.

The Howarth study was widely reported in the news media. Robert F. Kennedy Jr., a prominent environmental activist, has cited the study as a reason for backtracking on his previous endorsement of natural gas development. The study may even form the basis for policy decisions as Howarth has provided testimony for the European Parliament and the New York state legislature.

Now it appears that the Howarth study may have missed the mark. A number of subsequent reports refute the conclusions of the Howarth study and affirm that natural gas is a cleaner fuel than coal. This includes studies by Carnegie Mellon University, the National Energy Technology Laboratory, IHS-CERA and the University of Maryland. The former Secretary of the Pennsylvania Department of Environmental Protection, John Hanger, has summarized these studies nicely on his blog.

The final nail in the coffin may have been driven home by a different team of Cornell researchers in a paper that was recently published online. Characterizing the Howarth study as “misleading,” these researchers conclude that shale gas has a greenhouse gas footprint that is half and perhaps even a third that of coal.

These studies refuting the Howarth report are encouraging for those of us who are concerned about climate change and see hope in the development of domestic shale gas that can reduce dependence on foreign energy supplies while substantially reducing greenhouse gas emissions.

As anyone who even casually scans the news is aware, there are other potential environmental concerns associated with Marcellus development besides green house gas emissions. For landowners who have not yet signed an oil and gas lease, the ideal way to address many of those concerns is by working with a qualified attorney who can negotiate protections for the landowner in the lease. This may include provisions such as an environmental indemnity clause and restrictions on the right to use the property for drilling or disposal of wastewater. The gas planning team at Marshall, Parker & Associates is always committed to helping landowners protect their family and their property in the gas leasing process and also in dealing with the various issues that may arise after signing the lease.

A related issue that has received less attention, but is nevertheless significant, has been regulation of the network of natural gas pipelines that is being constructed to transport natural gas from the Marcellus to the market. The Philadelphia Inquirer has published an excellent series of articles, drawing public attention to the notable lack of regulatory oversight of pipeline construction in the Commonwealth. A link to the series of articles can be found here.

Pipeline regulation is one area where the Governor and our state legislators have recently made progress: Act 127, introduced by State Representative Matthew Baker, was signed by Governor Corbett on December 22, 2011. The Act remedies a significant shortfall in pipeline regulation by giving the state Public Utility Commission (PUC) authority over pipeline regulation that matches the current oversight by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA). An article discussing this pipeline measure can be found here.

PUC involvement with pipeline regulation is nothing new, but prior to Act 127 the PUC only regulated those pipelines also subject to regulation by the Federal Energy Regulatory Commission. These are generally the large, interstate transmission lines that are regulated as public utilities and have eminent domain powers. The only entity that had any regulatory control over the many miles of gathering lines that transport the gas from the wells to the transmission lines in Pennsylvania was the PHMSA. Unfortunately, that oversight has been less than complete as the PHMSA has lacked the resources to fully regulate those many miles of pipelines.

This missing piece of the regulatory puzzle is what was fixed with Act 127; now, the PUC will have the authority to regulate gathering lines in the Commonwealth. To meet its new responsibilities under the Act, the PUC plans to hire 12-15 new pipeline inspectors – good news for the residents of those areas where pipeline construction is taking place.

But one very large piece of the puzzle is still missing. As discussed above, the PUC now has authority over those pipelines currently regulated by the PHMSA. However, the federal regulations break down the locations where pipelines are placed into four classes, from Class 4 high-population areas to the rural areas with low-density population categorized as Class 1. And the federal regulators apparently made the decision that the risks posed by pipelines in the low population areas didn’t justify the added costs of regulation. So, pipelines in Class 1 areas are not subject to regulation by the PHMSA and will thus not fall under the new regulatory requirements of Act 127.

A significant percentage of the new pipelines being constructed to transport Marcellus shale gas are being placed in the rural Class 1 areas. For that reason, the oil and gas industry in Pennsylvania may view Act 127 as more bark than bite. Representative Baker predicts that the federal regulations could be strengthened in two to three years, placing pipelines in Class 1 areas under federal oversight. Pennsylvania could also choose to extend PUC authority, but uncertainty about expanded regulation remains.

The natural gas industry naturally views additional regulation as unnecessary, suggesting that self-policing is adequate. Certainly, the industry has every incentive to ensure that pipelines are constructed in a safe manner. Nevertheless, it’s safe to say that the landowners in rural areas where these gathering lines are placed would prefer to see expansion of PUC regulatory oversight to include Class 1 areas sooner, rather than later.

There are a number of issues that will need to be addressed in reconciling the competing versions of the bills. For instance, the amounts that will be collected by the impact fee vary considerably. Here is a link to an article which includes a chart that nicely summarizes the key differences in the amounts collected and the allocation of the proceeds.

The more critical difference may be regarding who is responsible for collecting the fee; while Governor Corbett and the House agree that the individual counties should asses the fee, the Senate version of the bill gives that duty to the state Public Utility Commission.  

Discussing the Marcellus Shale legislation, the Pittsburgh Post Gazette concludes that “large question marks still loom regarding whether that measure will find its way to the governor's desk by the end of the year”.

The Pennsylvania legislature has been considering some type of severance tax or impact fee since the Marcellus boom began. Whether or not it will happen this year remains to be seen – with only three session days left for the Senate in 2011, our legislators are certainly taking it down to the wire.