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Royalties from Marcellus gas in Pa. hit $731M in 2012

The Allegheny Institute for Public Policy estimates that Pennsylvania royalty income from Marcellus Shale natural gas development amounted to $731 million last year, a 6,600 percent increase in five years.

The Allegheny Institute for Public Policy estimates that Pennsylvania royalty income from Marcellus Shale natural gas development amounted to $731 million last year, a 6,600 percent increase in five years.

Royalties to mineral-rights owners are a percentage of the market price of natural gas, and the increase is even more remarkable because the average price of natural gas in 2012 was $2.83 per thousand cubic feet, or less than a third the 2008 price of $8.90. Pennsylvania wells produced 2.065 trillion cubic feet of natural gas last year.

While the $731 million in Marcellus royalties amounts to a lot of money, it represents only about 0.13 percent of Pennsylvania's total personal 2012 income of $556.7 billion. - Andrew Maykuth