PA Supreme Court Holds Portions of Oil and Gas Act Unconstitutional

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The Pennsylvania Supreme Court recently held that several provisions of Act 13 of the Pennsylvania Oil and Gas Act are unconstitutional as it gives Marcellus Shale and natural gas drillers unfettered access to drilling locations. In Robinson Township, et al v. Pa. Public Utility Commission and Attorney General, the court found that Act 13 removed control from municipalities in determining where drilling could take place. This pre-emption was found to be in violation of the Environmental Rights Amendment of the Pennsylvania Constitution.

Act 13 allowed the state to issue zoning permits when it came to Marcellus Shale drilling until the Pennsylvania Supreme Court affirmed the Commonwealth Court’s ruling that the act was unconstitutional. The justices found that the act violated the Environmental Rights Amendment, which grants the citizens of Pennsylvania a right to clean air, pure water and the preservation of the natural, scenic, historic and esthetic values of the environment.

The court's ruling gives local municipalities the ability to authorize oil and gas operations in all zoning districts throughout the area enabling them to regulate and govern their towns as they once did prior to the enactment of Act 13.

According to the U.S. Energy Information Administration, Pennsylvania is the country’s fastest growing natural gas producer. Fracking-related activities have the potential to create a variety of different claims for insurers, including liability, environmental and property claims as well as insurance coverage issues (for a greater discussion on potential fracking claims see The Fuss Over Fracking). The impact of Robinson Township on insurers is uncertain. With municipalities having the right to dictate the location of the drilling, they will be able to control the number of wells created which, in turn, could curtail drilling activity in Pennsylvania. At a minimum, the Supreme Court’s decision ensures that local governments will be at the center of the fracking debate.

Topics:  Fracking, Oil & Gas, Permits, Preemption

Published In: Conflict of Laws Updates, Constitutional Law Updates, Energy & Utilities Updates, Environmental Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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