On June 10, 2016, the U.S. District Court for the Southern District of West Virginia issued a Memorandum Opinion and Order invalidating those parts of a Fayette County (W.Va.) ordinance that prohibit the use of underground injection wells for the disposal of produced water, and regulate the handling and storage of produced water at conventional oil and gas well sites. The court held that those provisions are preempted by state and federal law, and also struck down a provision that would have allowed local residents to bring enforcement actions under the ordinance. EQT Production Company v. Wender, et al. Civil Action No. 2:16cv290 (S.D.W.Va.).
Earlier today, the Pennsylvania Commonwealth Court issued a unanimous decision in the much-anticipated case of Gorsline v. Board of Supervisors of Fairfield Township, reversing the decision of the Court of Common Pleas of Lycoming County. In reversing the lower court, the Commonwealth Court upheld Fairfield Township’s decision to grant conditional use approval to Inflection Energy, LLC for an unconventional well pad. This case is significant for several reasons. First, the Commonwealth Court made it clear that it is insufficient for objectors to sustain their burden by merely stating concerns or asking questions of the developer’s expert witnesses. Instead, they must present evidence to substantiate those concerns. Second, the Commonwealth Court criticized the lower court for making its own findings of fact when it did not take additional evidence and where the municipality made its own findings of fact. Third, the Commonwealth Court recognized that the lower court erred by focusing on truck deliveries during the construction phase of the project because zoning regulates the use of land and not the particulars of development and construction. Finally, the objectors attempted to raise issues based on the Pennsylvania Supreme Court’s Robinson Township decision, arguing that natural gas development is an industrial use that is per se incompatible with a residential/agricultural zoning district and that approval of the natural gas development violated the Environmental Rights Amendment of the Pennsylvania Constitution. The Commonwealth Court summarily rejected these two arguments and noted that, because the record supported the township’s determination that the proposed well pad was compatible with the permitted uses in the residential/agricultural district and the objectors presented no evidence of harm, the objectors’ claims were unsupported by the accepted evidence of record. This final point is especially significant because many anti-industry opponents cite both the lower court’s opinion and the Delaware Riverkeeper Network’s amicus brief from this case in other zoning proceedings as support for the now rejected view that oil and gas development must only occur in industrial zoning districts.
Citing a recently decided case in Colorado, the bankruptcy trustee for Norse Energy filed a motion in early August urging the New York Court of Appeals to re-hear arguments in the case. In June, the Court of Appeals issued an opinion which affirmed local zoning laws adopted by two upstate towns that prohibited oil- and gas-related activities within their borders. The motion filed by the trustee in August asserted that a Colorado court’s rationale in striking down a voter-approved local law prohibiting hydraulic fracturing provides support for the position that municipal-wide drilling bans directly conflict with New York’s Oil, Gas and Solution Mining Law. In response, the environmental group Earthjustice recently filed a motion urging the Court of Appeals to reject the trustee’s request on the grounds that the motion for reargument was untimely and the Colorado decision was based on different laws and legal analyses.
Today the New York Court of Appeals issued an opinion affirming local zoning laws adopted by two upstate towns that prohibited oil and gas-related activities within their borders. Specifically, the Court ruled that there was nothing within the plain language, statutory scheme and legislative history of the New York Oil, Gas and Solution Mining Law (“OGSML”) that manifested an intent by the legislature to preempt a municipality’s home rule authority to regulate land use. The Court expressly stated in the decision that it was not passing judgment on “whether hydrofracking is beneficial or detrimental to the economy, environment or energy needs of New York,” noting that the cases only “concerned the relationship between the State and its local government subdivisions, and their respective exercise of legislative power.” A copy of the Court’s opinion can be found here.
Yesterday the New York Court of Appeals heard oral arguments in two cases challenging the authority of a municipality to ban certain oil and gas activities within its jurisdiction. The Court is reviewing two lower court decisions from May 2013 which held that New York’s Oil, Gas, and Solution Mining Law (OGSML) does not preempt local zoning laws.
During the oral arguments, Chief Judge Jonathan Lippman stated that both sides present valid public policy issues. “On the one hand, you’re saying yes, we should have a comprehensive strategy to deal with such an important issue to our state–energy,” Lippman said. “And on the other hand, municipalities believe (they can) determine how they’re going to live. They want some voice in how they live.” Attorneys representing the parties challenging the bans argued that New York’s interests in pursuing a uniform energy policy are paramount. In response, the attorneys for the municipalities argued that because the OGSML does not expressly supersede zoning laws, local governments are free to regulate land use within their borders as they see fit. The Court of Appeals is expected to issue its decisions in July 2014.
On April 10, 2014, a federal judge granted a preliminary injunction forcing Hempfield Township to permit ION Geophysical of Houston (ION) to perform seismic testing on the Township’s roads. Hempfield Township argued that it does not specifically permit seismic testing and, that by restricting the seismic testing, it was protecting the rights of property owners who did not have an agreement with ION. U.S. District Court Judge Maurice Cohill disagreed, finding that the Township was preempted by the Oil and Gas Act from prohibiting seismic testing and the Township’s refusal to negotiate an agreement with ION deprived ION of the ability to conduct seismic testing without the ability to appeal. Judge Cohill ruled that the testing will not hurt the Township and that Hempfield would be likely to lose on the merits.
On May 20, 2013, the Town of Canandaigua, New York, adopted a local law to extend by nine months a moratorium on all natural gas exploration and extraction activities within the town. The new local law extends the initial 18-month moratorium passed by the Town Board, which was scheduled to expire on June 22, 2013, until March 22, 2014. The Town Board indicated that the nine-month extension will allow for the development of a local law to permanently ban high volume hydraulic fracturing activities within the town.
By April 15th, local governments in Pennsylvania were required to complete paperwork related to how the shale gas well fee money was spent in 2012. However, millions of the money distributed under Act 13 remains unaccounted for because local governments were confused about how the forms were to be completed, NPR reports. A Public Utility Commission (PUC) spokesperson pointed out that it may be hard to track down and verify all the information, because under the law, the PUC does not have the authority to audit local governments. Next year, the PUC plans to switch from paper to electronic reporting to improve the reporting process.
Range Resources argued in the Court of Common Pleas of Washington County, Pennsylvania this week that it was improperly denied conditional use permits to place well pads in Robinson Township. Counsel for Range Resources argued that the Township Supervisors did not follow the correct process, actively sought members of the public to speak out against Range Resources at public hearings, and held the proposed wells to a higher standard than required by the Township for wells approved in 2010. The Township’s counsel stated in the hearing that Range resources did not provide enough information in its conditional use applications.