Fracking Supporters Announce Well Fees, Tax Rates

Illinois legislators say they have reached a deal on the taxes and fees companies that use hydraulic fracturing must pay the state.

It was the last major stumbling block of an agreement on how to regulate the oil and gas drilling technique known as fracking.

Mark Denzler, who represents business groups that favor fracking, said the amount of money Illinois will make depends on the productivity of the wells.

"You could see at 200 barrels a day, you could see upwards of about $200,000 per well, per year," Denzler said.

The tax rate starts at 3-percent per well, and over time could step up to 6-percent.

Drillers would also pay $15,000 per well to the Department of Natural Resources, which would enforce state laws on fracking.

Although environmental groups negotiated the regulations, they say they would rather see fracking banned altogether. That has prompted other environmentalists to accuse those advocates of selling out, but they say given that the process is largely unregulated now, some rules are better than none.

On Wednesday, House Speaker Michael Madigan stated he favors a temporary ban on the oil and gas drilling.

"I'm for the moratorium," Madigan told reporters.

State Rep. John Bradley (D-Marion), who is one of Madigan's top lieutenants, said he doesn't expect legislators will ever get the chance to vote on a fracking moratorium.

Bradley and other prominent officials -- including Attorney General Lisa Madigan -- had negotiated with both business interests and environmental groups to agree on the regulations.

A House committee will vote on Friday to move the fracking bill to be considered by the full House.

State Rep. Chad Hays (R-Catlin) said he plans to support the bill.

“You know, this is going on in many, many states,” Hays said. “It’s certainly nothing short of a gold rush in states like South Dakota and Texas. There are a lot of measures in there from a safety perspective.”

The process of hydraulic fracturing uses water, sand and chemical mixtures to crack deep rock formations to release oil and natural gas.