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Multiple Marcellus drilling lawsuits expected in Pennsylvania

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By Timothy Puko
Saturday, April 9, 2011

It took six months and a lot of research for North Huntingdon officials to draft a set of laws for the Marcellus gas-drilling rush.

Planners wanted to limit drilling to larger plots, demand escrow payments from drillers to help pay for road damage and craft rules on storm water management at wells. But fearful that deep-pocketed gas companies might fight some of their rules, they had to back down and leave some of them out, said Mike Turley, the township's assistant manager.

"We were worried this would get into a lot of litigation," Turley said.

They're right to worry, two local legal experts said.

The gas in the Marcellus shale formation is bringing untold riches into the area, but it's likely to bring untold court battles. Costly research and court fights are in store for towns trying to craft laws to manage the drilling, experts said. Court precedent is short, meaning judges will likely settle a lot of questions in zoning laws unless state lawmakers intercede with new laws.

"I think the future of this litigation in Pennsylvania is going to be pretty significant," said Gina S. Warren, who teaches energy law and civil procedure at Duquesne University School of Law.

Conflicts were bubbling this week in Washington County. Officials at Cecil-based Rice Energy filed a legal challenge to overturn new zoning laws in North Bethlehem. Officials from Texas-based Range Resources threatened to leave or sue Mt. Pleasant -- the township in which Range discovered the Marcellus -- because of restrictions from its supervisors.

Mt. Pleasant supervisors on Friday asked Range officials to meet with a mediator -- former Allegheny County and federal Judge Donald E. Ziegler -- to settle their differences.

The cases are likely precursors of things to come, said Ross Pifer, director of the Agricultural Law Resource and Reference Center at Penn State's Dickinson School of Law.

At least three dozen municipalities in Washington, Westmoreland and Allegheny counties passed or are contemplating new laws to control oil and gas drilling within their borders. State law and court precedent make it clear they can't control environmental regulation at wells, or make laws so complicated that it outlaws drilling. But they choose which parts of their townships and boroughs are open to drilling and which are not.

They also might be able to set limits on lights, noise, workers living at the sites and whether drillers must pay for road damage. But all of those possibilities are in a legal gray area, the lawyers and municipal leaders said.

"(Town officials) are going to have to do a lot of research and they're never going to get the answer that they need, because it doesn't exist," Pifer said.

A deluge of court fights is likely, but it's not solely the industry's fault, said Matt Pitzarella, spokesman at Range Resources-Appalachia.

"Factor in attorneys and solicitors that the townships can turn to for advice. They have a financial incentive to drag things out," Pitzarella said. "It's never going to end up any place good. It's only going to end someplace good for all the attorneys."

The Marcellus Shale Coalition wants the General Assembly to amend and clarify the Oil and Gas Act and the Municipalities Planning Code, partly to give general permission to drill in every part of every municipality statewide.

That's not what most towns want, said Michael Silvestri, manager in Peters, which recently put oil and gas wells under "conditional use" zoning laws. Other townships are moving toward that law, which means local officials have to give final approval for each well site before work can start.

That's what officials want in Mt. Pleasant, which helped spark the conflict there with Range Resources. Range officials said it makes planning difficult. But it allows local leaders to add restrictions to each site to protect neighbors who aren't making money from the well, proponents said.

"There are so many companies out there. Some are better than others," Silvestri said. "So you have to plan for the worst-case scenario."

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