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Drilling decline in Pennsylvania hurts funding for DEP regulators

Low natural gas prices that have companies dispatching fewer drilling rigs to Pennsylvania’s fields and forests are taking a toll on the industry’s regulators, too.

The state Department of Environmental Protection is exploring additional funding options for its oil and gas regulatory program because permit applications to drill shale gas wells — the program’s dominant revenue source — are down about 30 percent compared to this point last year.

DEP uses permit fees, fines and $6 million each year from the state’s impact fee levied on Marcellus Shale and other unconventional wells to pay for the oil and gas program’s roughly $21 million annual budget. That means the program has not had to rely on the fickle state general fund budget process each year to support its work.

But now its primary funding source has turned out to be equally fickle, as natural gas operators have responded to low oil and gas prices by reducing their capital spending and improving efficiency by coaxing more gas from fewer wells.

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