While Robinson Township v. Commonwealth of Pennsylvania is being reconsidered on remand and certain aspects of Act 13 remain unclear, oil and gas companies in the process of obtaining state permits may take some steps to try to reduce delays and increase the chances of obtaining such permits.
Today, May 14, 2014, the Commonwealth and industry groups will be arguing the remaining unsettled matters in the wake of Robinson Township, including whether the PUC may review zoning ordinances; whether limiting notice of spills to public well owners only is constitutional; whether eminent domain powers are available to those storing, selling or transporting gas; and whether the Act can prohibit health professionals from disclosing fracking chemicals.
In the meantime, here are five practice tips for securing permits and reducing delays in the wake of the Robinson Township decision:
1. Help the DEP Understand the Municipal Landscape
After Robinson Township, the basic authority of the DEP to issue the following kinds of permits remains valid:
well permits for operators;
stream crossing permits (Chapter 105); and
erosion and sedimentation control approvals for operators and midstream companies (Chapter 102).
DEP policy requires notice of permit applications to counties and municipalities and allows 30 days for them to provide comments, including whether the project meets applicable zoning requirements. TIP: Providing an outline or road map for understanding your permit application and supporting documentation as they relate to the relevant municipal ordinances and zoning requirements may ease the agency’s burden to coordinate or interpret municipal ordinances. The extra effort may ultimately prevent delays.
It is important to note that the Supreme Court upheld the validity of Section 3302 of Act 13 (concerning the preemption of local ordinances), which was essentially a restatement of the Oil & Gas Act’ preemption provision. As such, the local regulation of oil and gas operations is to a large extent the same as it was pre-Act 13. While there is no specific preemption provision in the Clean Streams Law, implied preemption may apply depending on the circumstances. Butler Township v. DER, 513 A.2d 508 (Pa. Cmwlth 1986) (DEP order to construct a sewage treatment plant in a specific location preempted local zoning). However, in Taylor v. Harmony Township, 851 A.2d 1020 (Pa. Cmwlth 2004), the Commonwealth Court held that local regulation of timber harvesting and logging was not preempted even though it was also regulated by DEP under Chapter 102. The facts of each application will be dispositive.
2. Affirmatively Provide the DEP with Your Analysis of Environmental Effects of your Permit
The plurality decision in Robinson Township noted that the Environmental Rights Amendment (ERA) “requires…government to consider in advance the environmental effect of any proposed action,” including both “actual” and “likely degradation.”
DEP has historically conducted a harms/benefit analysis in its permit review and decision process. In the wake of Robinson Township, this analysis will certainly receive new attention and may require a permit applicant to redouble its efforts to demonstrate that any degradation is minimal, without creating any significant short-term or long-term adverse environmental impacts. TIP: Articulate with specificity the impacts and the basis for you conclusion, including alternatives and the analyses that led you to dismiss them. For example, in securing the Chapter 102 approvals for erosion and sedimentation control measures, a midstream operator may need to more clearly substantiate the alternative analysis for the approval of a certain stream crossings in pipeline construction activities.
3. Anticipate Review of Your Application by Other State Agencies
Other state agencies, such as the Pa. Fish and Boat Commission, the Pa. Game Commission, the Pa. Department of Conservation and Natural Resources and the Pa. Historical and Museum Commission, are entitled to review and comment on permit applications, and their authority was not directly affected by the Robinson Township decision. Their input to the permit review process, however, may be relevant to the ultimate DEP action, particularly if they assert that environmental harms have not been mitigated. TIP: By including an analysis of the concerns of relevant state agencies expected to provide comment on your application, an operator may be able to frame the discussion in DEP’s relevant concerns, rather than simply reacting to the comments of other agencies as they come in.
4. Address Waterway Setbacks
In the Robinson Township decision, the majority of the Justices enjoined Sections 3215(b)(c)(d) and (e) of the Act as either being unconstitutional or not severable from unconstitutional provisions. Section 3215(b) established setback distances from perennial streams, springs, bodies of water and wetlands greater than one acre and requires that waivers of the distance requirements be granted by DEP upon submission of a plan identifying additional measures necessary to protect waters of the Commonwealth. The Court found that mandating the grant of a waiver amounted to imposing the burden of proof on the DEP, not the applicant seeking the waiver.
Because the Supreme Court’s decision struck down Section 3215(b), it effectively eliminated the statutory setback requirements from the water resources identified in the subsection. Subsection 3215(a), however, was not enjoined and remains in effect. It establishes distance restrictions to buildings, water wells and other water supply extraction points but allows exceptions based on written consent of the owners of such resources. It also provides for waivers issued by DEP if consent is not obtained and the restriction would deprive the owner of the oil/gas rights of the right to the resources.
With regard to Section 3215(b) restrictions, Governor Corbett has issued statements requesting that oil/gas operators continue to voluntarily comply with the Act 13 setback limitations until regulatory or statutory action can be taken to replace them in a manner that complies with the Court’s decision. Operators should anticipate that lawmakers will make another attempt to regulate permitting authority relating to waterway setbacks. TIP: As a precautionary general rule, compliance with the setback limitations is a prudent safeguard to third party claims.
5. Less Scrutiny on Federally Delegated Permits
State permits issued under federally delegated programs, wherein DEP issues the federal permit, are less likely to be subject to attack based on interference with local ordinances because Federal law is generally not subject to state and local restrictions. NPDES permits issued under the Clean Water Act and Title V permits issued under the Clean Air Act are examples of these types of permits. TIP: Operators should focus efforts on state permits issued by DEP, rather than those clearly issued under a federally delegated program.
The post-Robinson Township era is a fluid regulatory environment. It is advisable to develop permit applications with the holdings of the Robinson Township case in mind, including paying more attention to potential conflicts between state law and local ordinances and regulations, taking proactive steps to resolve or minimize those conflicts to the greatest extent possible and providing the DEP with proper support for the requested action.