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LEGAL UPDATE: Pa. Supreme Court rejects reconsideration of Act 13 decision

By: Cressinda D. Schlag

On February 21, 2014, the Pennsylvania Supreme Court rejected lawyers’ arguments on behalf of Commonwealth agencies and officials in Robinson Township regarding their reconsideration request of the court’s holding in Robinson Tp., Washington County v. Com., a landmark decision affecting several core provisions of the state’s Marcellus Shale drilling law, Act 13 of 2012, 58 Pa. C.S. §§ 2301-3504. The lawyers for the Commonwealth argued that the court’s decision had established firm factual findings regarding the impact of Act 13, which were unsupported by the record, and employed a new balancing test that was a strong departure from the Supreme Court’s historical practice.

On December 19, 2013, the Supreme Court in Robinson Tp., Washington County v. Com., held that several core provisions of Act 13 of 2012 violated the Environmental Rights Amendment of the state constitution. The Supreme Court’s determination that provisions of Act 13 were unconstitutional, in effect removed Act 13’s preemption of local zoning ordinances, and restrictions on municipal regulations of oil and gas resources. The Supreme Court’s decision also removed Act 13’s requirement that the PA Department of Environmental Protection (DEP) issue waivers for certain well setback requirements along with the Act’s express limitations on a municipality’s ability to challenge the DEP’s issuance of the waivers. The Supreme Court reasoned that these provisions of Act 13 were unconstitutional because they violated the Environmental Rights Amendment of the state constitution, which guarantees “clean air, pure water,” and “preservation of the natural, scenic, historic and esthetic values of the environment,” by removing environmental protections established by local regulatory authorities. The Supreme Court’s determination that local authorities should be permitted to restrict, define, and limit areas where oil and gas operations can take place for the purposes of environmental protection is expected to have a significant impact on oil and gas exploration and production companies operating in the Pennsylvania region.

While the Supreme Court’s denial of the request for reconsideration means that the Court’s earlier holding will be upheld, Robinson Tp., Washington County v. Com., has been remanded to the Commonwealth Court to determine which additional sections of Act 13 should be eliminated. On remand, the Commonwealth Court will specifically determine whether Act 13’s provisions limiting discussions between doctors and patients concerning certain fracking fluids, authorizing gas companies’ use of eminent domain, and stipulating lease notice requirements containing different procedures for gas well neighbors with public water versus private water, are consistent with the Supreme Court’s constitutional balancing test.

So far, local governmental bodies have responded to the Supreme Court’s ruling in Robinson Tp., Washington County v. Com., with a mixture of enthusiasm and apathy. For example, newly seated supervisors in Robinson, Washington County have already initiated plans to revise zoning and drilling regulations related to oil and gas operations that are near agricultural areas or special conservation districts. In stark contrast to Washington County’s current zoning efforts, counties such as Susquehanna and Bradford have reported that they have no plans to enact any zoning ordinances regarding oil and gas operations. In fact, a State Impact Analysis of Pennsylvania, which used data from the Department of Economic and Community Development, suggests that upwards of 45% or two out of every five municipalities, did not have any zoning laws on the books relating to Marcellus Shale operations.

While it is clear that following Robinson Tp., Washington County v. Com., oil and gas exploration and production companies operating in Pennsylvania will be required to diligently investigate and comply with all local zoning ordinances and land use regulations, the full impact of the Supreme Court’s decision cannot truly be assessed until after the Supreme Court’s list of unresolved issues have been addressed by the Commonwealth Court during remand.

For additional questions or concerns about how the decision might affect Marcellus Shale businesses in the region, contact the Burns White Energy Group.