State Supreme Court rules municipalities can limit what gas drillers can do

| Thursday, Dec. 19, 2013, 2:48 p.m.

After nine years of drilling, three years of debate and 14 months of court deliberation, Pennsylvania is back where it started, with shale gas companies and municipal governments at odds over how to manage the Marcellus shale natural gas boom.

The State Supreme Court ended more than a year of uneasy stalemate on Thursday when it struck down oil and gas law reforms that were supposed to limit municipal powers on drilling. The 4-2 decision allows municipal governments to keep blocking off some, though not all, of their neighborhoods from drilling, and subjecting drillers to reviews before permitting drilling.

The long-awaited decision undoes a key element of Gov. Tom Corbett's signature legislation: It strips the oil and gas law reforms known as Act 13 of the biggest benefit they gave drilling companies. It gives environmentalists and municipal governments a potentially historic precedent to challenge drilling all over the state, reigniting legal battles that were brewing before the case went to state courts last year.

“It's a great day for all the residents here in Pennsylvania,” said Deron Gabriel, commissioner in South Fayette, one of five Pittsburgh suburbs to lead the legal challenge that started in March 2012. “Fundamentally, we're vindicated. ... We're able to continue to zone and keep industrial activities where they should be — in industrial areas.”

Both Corbett and members of the Marcellus Shale Coalition industry group called the decision a disappointment. Officials of the coalition and the Pennsylvania Independent Oil and Gas Association said they want to work with municipal groups to find solutions to their conflicts.

“We must not allow (Thursday's) ruling to send a negative message to job creators and families who depend on the energy industry,” Corbett said. “I will continue to work with members of the House and Senate to ensure that Pennsylvania's thriving energy industry grows and provides jobs while balancing the interests of local communities.”

The passage of Act 13 culminated three years of debate on how to modernize the state's rules to manage the new rush of shale gas drilling. Horizontal drilling and hydraulic fracturing began in the Marcellus shale about nine years ago, booming to more than 7,400 unconventional wells statewide, according to state records.

Passed in February 2012, Act 13 was supposed to have a three-pronged effect. Two — an update to environmental protections and a fee on deep-shale wells — remain. But the effort to help drillers by making uniform land-use laws in all 2,500 municipalities was part of the challenge and the part the court struck down.

The rules would have required municipalities to allow drilling, wastewater pits and seismic-testing explosives even in residential areas, which Chief Justice Ronald D. Castille called a “remarkable ... revolution” on existing law. It would have allowed pads within 300 feet of existing buildings, which Castille said effectively stripped municipalities' ability to plan for development.

Municipalities previously had the power to decide where and when drilling could happen, and South Fayette, Cecil, Peters, Mt. Pleasant and Robinson in Washington County sued to keep that power. The law put them in conflict with a constitutional mandate to protect residents and property rights by not allowing them to keep drilling away from schools, parks and businesses, they argued.

The Supreme Court heard the case in October 2012 and took 14 months to craft a broad, 162-page decision. Castille wrote it for three members of the majority, and a fourth wrote a concurring opinion. Castille, a Republican Vietnam War veteran and former Philadelphia prosecutor, wrote at length about the state's history of environmental degradation.

He quoted a passage on deforestation from the timber industry, listed a series of local environmental disasters including the 1948 Donora smog tragedy and noted the billions needed to repair decades of environmental damage from coal mining, which he later said may be rivaled by shale gas extraction. The state has a “notable history of what appears retrospectively to have been a shortsighted exploitation of its bounteous environment,” Castille wrote.

His argument attempts to re-establish the importance of the state Constitution's Environmental Rights Amendment, the pivotal law cited in his opinion. That amendment empowers municipalities to protect the environment, and the state overstepped its powers by ignoring it, forcing them to accept uniform rules for gas drilling, Castille said.

“A new regulatory regime permitting industrial uses as a matter of right in every type of pre-existing zoning district is incapable of conserving or maintaining the constitutionally protected aspects of the public environment and of a certain quality of life,” he wrote. “Protection of environmental values ... is a quintessential local issue that must be tailored to local conditions.”

The ruling is likely to trigger a flurry of activity from drilling industry lobbyists and lawyers, experts said as they awaited the high court's decision.

The industry may pressure state lawmakers to try again to streamline rules. One option may be to write a model ordinance for municipalities, then pass a law that allows them to collect impact fees only if they use that ordinance, said Ken Komoroski, an attorney at Downtown-based Morgan, Lewis & Bockius LLP.

“If they can't do it with a sledgehammer, they're going to have to do it with a carrot,” attorney Kevin McKeegan, a land-use law expert with Meyer, Unkovic & Scott LLP, Downtown, said last December.

Timothy Puko is a staff writer for Total Trib Media. Reach him at 412-320-7991 or tpuko@tribweb.com.

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