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Court decision may have big impact on drilling

Three weeks after the Pennsylvania Supreme Court threw out key sections of the state’s oil and gas law, legal experts remain at odds over how much of a wreckage the court made of Gov. Corbett’s signature legislation.

Lawyers acting on behalf of two state agencies asked the court on Jan. 2 to reconsider its decision, which the governor’s general counsel called a “stunning departure” from past practices because the court had made “sweeping factual findings” that had not even been argued in the lower courts.

The ruling struck down provisions in the 2012 law that had stripped municipalities of the power to determine where gas-drilling activity could occur within their boundaries.

Corbett and the gas industry sought the law to sidestep potentially hundreds of different municipal zoning laws, including some that appeared to be designed to stymie drilling altogether.

Legal experts say the ruling doesn’t mean local governments can block drilling now.

The governor’s office went so far last week as to imply that the court’s ruling could actually weaken environmental protections. He implored Marcellus Shale gas producers to abide by measures that were invalidated in the law, formally known as Act 13.

“This action, which could imperil our water quality, is simply unacceptable,” Corbett said in a news release.

Most experts say insinuations that the court’s ruling will lead to a frenzy of unregulated drilling overstate the ruling’s impact.

“No one views the court’s decision as a way to circumvent environmental provisions,” said David Spigelmyer, president of the Marcellus Shale Coalition, the trade group that represents nearly all of the state’s shale-gas producers.

But the decision’s ramifications are still huge.

Local governments argued that drilling was an industrial activity that should be subject to reasonable zoning. That view was upheld.

The Supreme Court sent the case back to the lower Commonwealth Court to decide whether the provisions the top court ruled invalid could be individually severed from the law, or whether the whole act is unconstitutional. No new hearing is scheduled.

More than sought

The plaintiffs who brought the case did not seek to overturn the entire law, said Jordan B. Yeager, a Doylestown environmental lawyer who represented several municipalities.

“That’s not something we asked for,” he said.

Even if the whole act were thrown out — including provisions that created the impact fee that generates about $200 million a year in state revenue — old laws governing oil and gas production would still be on the books, said Ross H. Pifer, a Penn State law professor and Marcellus Shale expert.

“I think it would be a mistake for municipalities to do whatever they want to do with oil and gas,” Pifer said. “There still are restrictions.”

For the short term, the ruling has created much uncertainty. Anti-drilling activists are likely to pressure the 60 percent of Pennsylvania municipalities that don’t have zoning laws to enact them.

“Where this goes is up to the municipalities,” said Blaine A. Lucas, a gas-industry lawyer for the Pittsburgh law firm of Babst Calland. “How are they going to react to this? To be more restrictive?”

Chief Justice Ronald D. Castille’s opinion said the Act 13 zoning restrictions violated the state’s duties to protect public natural resources under the “Environmental Rights Amendment,” an Earth Day-era law that guarantees Pennsylvanians’ access to clean air and water.

“Previously, this amendment had been given little force or substance,” wrote Jeffrey J. Norton, an Eckert Seamans energy-law expert. “Under Justice Castille’s opinion, that is all changed.”

The gamut

Experts anticipate a range of new legal challenges based on alleged violations of the amendment, formally known as Article 1, Section 27. The challenges could run the gamut — mining, landfills, emissions permits.

“The implications of this decision go well beyond natural gas,” said Michael L. Krancer, Corbett’s former environmental protection secretary who now leads Blank Rome L.L.P.’s energy practice. “We’ll be unpacking this for a decade.”

The court’s ruling could have immediate implications for the Pennsylvania Environmental Defense Foundation (PEDF), which has sued the state over the practice of channeling the wealth generated from gas leasing into the state’s general fund, rather than for conservation purposes, as in the past. PEDF’s chief argument is that the practice violates the Environmental Amendment.

Only three of the six justices who heard the case cited the Environmental Amendment as the foundation of their decision — a fourth justice held that the invalidated provisions violated substantive due process. So the “plurality opinion” doesn’t carry the same as a majority of the seven-member court.

John C. Dernbach, a Widener University law professor whose writings on the Environmental Amendment were cited in the Castille opinion, said the court’s ruling was a “huge boost” to the law.

But he is concerned that the victory may not be durable. Castille is set to retire in a year and probably won’t hear any subsequent challenges.

“What some people worry about, including me, is that this is sort of a one-off thing,” Dernbach said.


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