2019 Natural gas royalties skyrocket, growth expected to continue

Yesterday the Pittsburgh Business Times reported royalties paid to Pennsylvania landowners in 2018 increased significantly following a trend of lower than average payments, the Pennsylvania Independent Fiscal Office (IFO) found in its annual report.

The IFO reported that growth was well into the double digits for the second consecutive year to bring royalties to a nine-year high for a total of $1.64 billion. The 2018 total is a 56.2% increase from 2017 when payments totaled $1.05 billion, which itself was up 64% from 2016’s $645 million (the lowest in nearly a decade).

Growth of this degree can be attributed to increases in production as well as a slight increase in natural gas prices for the region, because of this Pennsylvania landowners are collecting hefty checks. It is estimated that Washington and Susquehanna counties received royalty payments of $264 and 204 million, respectively.

Royalty data is positive feedback and return on investment from encouraging investment in energy infrastructure projects in the Commonwealth. Second, investment in wells in Western Pennsylvania begets additional investment in Central and Southeastern Pennsylvania.

Without means to market the resources extracted out West aren’t worth much. Thankfully, Pennsylvanians have embraced coordinating on developing an energy infrastructure environment that benefits everyone.

As natural gas becomes an ever more important fuel source, the Pennsylvania Energy Infrastructure Alliance is looking forward to learning of the 2019 royalties.