Pennsylvania High Court Rules on Amended Oil and Gas Act

by Morgan Lewis
Contact

Decision on Act 13 strikes down Pennsylvania’s attempt to establish a standard set of rules governing development and operation for the oil and gas industry.

On December 19, the Pennsylvania Supreme Court issued its ruling in Robinson Township v. Commonwealth,[1] striking down and enjoining many of the core components of the amended Pennsylvania Oil and Gas Act. In so ruling, the court blocked the state legislature’s efforts to improve regulatory predictability for the state’s oil and gas industry and allow consistency in the development of shale gas resources.

In Robinson Township, the court was tasked with deciding a challenge to Pennsylvania’s Oil and Gas Act, which was amended in 2012 in response to the burgeoning development of the state’s unconventional shale resources, including the Marcellus Shale, the Utica Shale, and the Upper Devonian Shales. These shale resources lie beneath more than 1,000 municipalities, townships, and cities. Many of these local governments have proposed and passed ordinances that impose restrictions on and require approvals for oil and natural gas operations. The amended Oil and Gas Act (known as Act 13) incorporated a combination of these land-use restrictions and provided for impact fees to allow consistent and responsible development of shale gas resources. The townships and organizations that challenged Act 13 claimed the law was unconstitutional because it unduly limited municipal authority to enact local ordinances—including zoning laws—that affect the development of shale gas resources. The Pennsylvania Supreme Court agreed with the challengers.

Featured in the court’s decision was the view that section 27 of the Declaration of Rights in the Pennsylvania Constitution (the Environmental Rights Amendment) would be violated if the court upheld the challenged provisions of Act 13. Section 27 of the Pennsylvania Constitution states the following:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

A plurality of the court expressed its concern for the legacy environmental impacts of coal mining and other industrial activities and opined that section 27 was added to the Pennsylvania Constitution to prevent further environmental degradation. In reaching its conclusion, the Pennsylvania Supreme Court appeared to accept certain allegations raised by the challengers of air and water contamination resulting from oil and gas development, even though these allegations are unsubstantiated. The majority invalidated the Act on substantive due process grounds.

The challengers also claimed that Act 13 was an unconstitutional enactment of special laws (i.e., those that unjustifiably apply to a particular member or members of persons or entities in the same situation). In addition, they challenged provisions of the law relating to eminent domain and the authorization of private companies to acquire real property interests to store natural gas. The Supreme Court ruled that the lower court improperly dismissed these claims and remanded these issues for further consideration. The lower court will also address whether the Supreme Court missed any portions of the law that should have been invalidated under the ruling. If additional sections of Act 13 are found to be so intertwined as to be unseverable, they too can be struck down.

Implications

Unfortunately, this decision presents a missed opportunity to establish a standard set of rules governing the responsible development and operation of natural gas resources and could allow some local communities to attempt to discourage such development and operation. The decision does not completely eliminate the concept of preemption as it exists to protect the integrity of statewide oil and gas and environmental laws, but it does leave open the scope of such preemption. While the Commonwealth Court considers and decides the remanded issues, natural gas operators will need to work closely with cities, counties, municipalities, and townships to collaborate on approaches to allow and encourage responsible development of these important shale resources. This will present additional challenges simply because the rules will likely be different from each local government authority and the scope of the authority remains unsettled, and it will certainly add to the complexity, scheduling, and costs involved with natural gas development efforts.


[1]. No. 63 MAP 2012 (Pa. Dec. 19, 2013), available here.

 

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.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis
Contact
more
less

Morgan Lewis on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.