Pa. Court Upsets Marcellus Shale Zoning Law

Pittsburgh Post-Gazette
27 July 2012
By Laura Olson and Erich Schwartzel

HARRISBURG -- A dispute over Pennsylvania's attempt to establish statewide zoning for Marcellus Shale drilling likely is headed to the state's top court, after an appellate panel on Thursday overturned the new rules.

Judges on the Commonwealth Court ruled that Pennsylvania cannot require municipalities to allow drilling in areas where it would conflict with their zoning rules, siding with several towns challenging the five-month-old law.

That law enacted a sweeping set of changes for how the gas drilling industry operates within Pennsylvania. It created a per-well annual fee, updated dozens of regulations, and, most controversially, dictated which aspects of drilling can and cannot by regulated locally.

The decision grants a reprieve to townships that had about two weeks left to overhaul their ordinances before an injunction delaying that section of the new law was to expire.

In fact, Cranberry planned to hold a hearing Thursday on its revised ordinance.

"It'll make that portion of the agenda very short," said Cranberry manager Jerry Andree after the ruling.

The township's ordinance, adopted in 2010 "in compliance with the then-state law," restricted drilling operations to areas around U.S. Route 19 and other industrial zones, Mr. Andree said. But Act 13 "basically threw our whole ordinance out," he said. "It was a radical change."

That was the message in the challenge filed by municipal officials, who said the broad requirements for where gas wells and compressor stations must be allowed would inhibit their ability to protect the health and safety of residents.

The majority opinion, written by Judge Dan Pellegrini, agreed with the local officials' concerns. He wrote that the required rule changes would alter the character of neighborhoods and make the existing municipal zoning plans irrational.

"If a municipality cannot constitutionally include allowing oil and gas operations, it is no more constitutional just because the Commonwealth requires that it be done," the opinion states.

Three other judges joined Judge Pellegrini in the majority opinion.

Due to a recusal by Judge Mary Hannah Leavitt, who was not on the panel considering the case's merits, there was a tie vote on whether the opinion should be "published," a classification related to whether the opinion can be cited in future cases.

Along with declaring the zoning section null and void, a separate provision on waiving setback requirements for gas wells also was overturned.

The rest of the law, including the impact fee, remains in effect.

A dissent from Judges Kevin Brobson, Robert Simpson and Anne Covey said they agreed with the decision to halt waivers on setback requirements, but strongly opposed the majority's argument on zoning rules.

They argued that the statute's 500-foot setback for gas wells in residential areas -- and other conditions required of compressor stations and processing facilities related to noise and location -- effectively balance the desire to develop resources against the goals of land-use planning.

"Oil and gas deposits can exist in a residential district just as easily as they might exist in an industrial district," Judge Brobson wrote. "What a local municipality allows, through its comprehensive plan, to be built above ground does not negate the existence and value of what lies beneath."

The office of Gov. Tom Corbett, who strongly supported the legislation, issued a statement Thursday afternoon saying the governor was disappointed with the decision and would likely appeal.

"We will vigorously defend this law, which better protects the environment, provides revenue to local communities and regulatory certainty to both landowners and job creators," the statement said.

Due to the legal charges against Supreme Court Justice Joan Orie Melvin, the state's top court currently is divided between three Democrats and three Republicans, clouding the forecasts for what could happen on appeal.

Meanwhile, officials in the municipalities that filed the lawsuit -- including the southwestern towns of Cecil, Peters, South Fayette, Mount Pleasant and Robinson -- were celebrating the decision.

"Certainly today's ruling preserves our right to have reasonable zoning in place," said South Fayette board president Deron Gabriel. "It protects our schools from industrial activities."

Drew Crompton, a Senate Republican staffer who helped write the law, said the opinion confirms that the state has the right to regulate zoning, though he disagreed with the judges' argument against how the state exercised that power.

"Either these local municipalities are creatures of the state and we can tell them what to do, or we cannot," Mr. Crompton said.

Industry officials, who had advocated for more zoning uniformity for years, disagreed with the ruling, but shied away from saying how it might affect their level of activity in Pennsylvania.

"The premise for the General Assembly's action earlier this year was to provide certainty and predictability that encourages investment and job creation across the Commonwealth," said Marcellus Shale Coalition president Kathryn Klaber in a statement, adding that the issue "must be resolved if the Commonwealth is to remain a leader in responsible American natural gas development."

Downtown-based driller EQT Corp. said it would wait for a final decision from the Supreme Court before making changes to its drilling or pipeline plans.

"We think it's a bit premature to try and figure out what, if any, impact there would be," spokeswoman Natalie Cox said. "This isn't final yet, and until it's final we're not speculating."

Harrisburg Bureau Chief Laura Olson: or 717-787-4254. Erich Schwartzel: or 412-263-1455.