MARCELLUS SHALE

Drilling boom costs Pa. thousands per well in road damage -- report

Each shale gas well in Pennsylvania contributes between $5,400 and $10,000 in damage to the state's roads, according to researchers at the Rand Corp.

The damage is largely unseen and may shorten the life span of the highway system.

The report comes as the state Legislature is looking for ways to offset the impact that gas drilling produces in Pennsylvania, which has become the third-biggest gas-producing state thanks to drilling in the Marcellus Shale.

While the costs are significant, "they look like they're manageable with the right policies," said Constantine Samaras, who led research as a senior engineer at Rand and now teaches engineering at Carnegie Mellon University.

Pennsylvania lawmakers voted this year to raise the state's fuel taxes in order to fund a backlog of highway and public transit repairs. The plan, known as Act 89, will pump an additional $2.3 billion annually into the system within five years. Critics have pointed out that the cost will fall mostly on individual drivers, though there's also an increase in the heavy truck registration fee.

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Some legislators and all the Democratic candidates for governor have pushed for a severance tax on natural gas production as a way to make sure the industry pays its full share for state services.

Assessing a road's life

The February report, "Estimating the Consumptive Use Costs of Shale Natural Gas Extraction on Pennsylvania's Roadways," focused only on the cost to state-maintained roads and didn't recommend a way to pay for the damage. It excluded smaller local roads, where gas drillers typically have bonding and maintenance agreements that require them to pay for any visible damage.

Typically, engineers measure a highway's useful life in the number of vehicle trips it can withstand before it has to be rebuilt. Heavier vehicles put exponentially more strain on a road than lighter vehicles, so a single pass in a heavily loaded truck can create the same amount of damage as thousands of trips with a lighter vehicle, the report said.

Each new gas well in Pennsylvania requires between 625 and 1,148 loaded one-way truck trips for drilling and hydraulic fracturing, or fracking, the report said, using data from a New York study on gas drilling. The researchers calculated the cost of each well using the number of truck trips and the cost of reconstructing different types of roads -- from interstate to rural highways.

The paper assumes that each trip covers 20 miles one way and that half the trips were in four-axle trucks and half were in six-axle trucks. The researchers also used calculations to account for the proportion of different types of highways -- from interstates to regional roads -- since the cost to replace each type is different.

The full impact of each well on all types of roads -- including local roads -- may be as high as $23,000. The researchers lowered the estimate to $5,400 to $10,000 on the assumption that gas drilling companies would fully pay for damage to local roads. The cost could vary if drillers took steps to reduce truck traffic, such as piping water to and from sites. Conversely, refracking wells would lead to more truck traffic.

The damage figure may be too conservative, because it doesn't include the impact of pipeline construction, which accompanies nearly all gas drilling, said Mike Wood, research director at the Pennsylvania Budget and Policy Center, which wasn't involved in the report.

"We have roads that were designed for very limited traffic in the first place -- when you put very heavy trucks on them, you end up with a significant amount of damage," he said.

Impact fee

Pennsylvania began assessing an impact fee on shale gas wells in 2011. The fee varies based on the price of natural gas and other factors. The amount of revenue it brought in decreased from $204 million in 2011 to $202 million in 2012, even as gas production grew, according to a report from the Budget and Policy Center. That amounts to a lower tax rate than what most oil-and-gas-producing states impose, Wood said.

About 60 percent of the impact fee revenue goes to local governments that are affected by drilling; about $20 million of the state's share is used for road and bridge repair, Wood said.

Republican Gov. Tom Corbett, who pushed for the impact fee, has opposed a severance tax.

A group of legislators in the state House of Representatives are preparing a bill that would impose a 4.9 percent tax on gas production. The bipartisan proposal would dedicate about 40 percent of the severance tax to local communities and 60 percent to state spending, said Rep. Gene DiGirolamo, a Republican from Bucks County.

"My bill will actually be better for the local communities," because it would raise more money, DiGirolamo said. "If we're going to get it passed, the governor's going to have to change his position on the issue."

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