Environmental Law Council

A gas drilling action group in Peters Township, PA wants to place an amendment to their home rule charter on the next election ballot. The amendment would ban natural gas drilling within the township’s boundaries. The township sought an injunction to prevent the inclusion of the question on the ballot. However, a judge dismissed the township’s case, holding that the court had no jurisdiction to get involved with elections unless there was “some immediate harm caused.” [Note: This sounds more like standing than jurisdiction. Stay tuned for a more detailed update.]

It has been held that municipalities do not have the authority to ban natural gas drilling through zoning. The twin cases of Huntley and Huntley v. Borough of Oakmont and Range Resources v. Salem Township, when read together, allow zoning ordinances to decide where gas drilling can occur, but not how. Furthermore, they cannot regulate any issue covered by the state’s Oil and Gas Act. Bans have been held to regulate the issue of permission to drill, which is covered by the Act.

However, a curious question remains as to whether an amendment to a township’s home rule charter will be treated the same way as a zoning ordinance. In terms of hierarchy, the Oil and Gas Act – being a state law – should still pre-empt any local laws. But, municipalities are given their authority through other state laws such as the Municipalities Planning Code (on an equal level with the Oil and Gas Act), and through the Pennsylvania Constitution (on a higher level). Does this give any special weight to a home rule charter?

The election in Peters Township happens in November of 2011. If the amendment passes and is enacted, it will almost certainly be challenged in court.

Read news coverage here: http://canon-mcmillan.patch.com/articles/judge-rules-marcellus-shale-question-to-be-placed-on-election-ballots-24249a40

In Butler v. Powers, the Pennsylvania Superior Court created uncertainty about the ownership of natural gas in deeds and leases. Pennsylvania has traditionally held that, when a landowner’s mineral estate is severed from the surface estate, “minerals” includes rocks and solid materials, but not natural gas. By default, that means gas belongs to the surface owner and not the mineral owner. An exception has been carved out for coal bed methane, which is gas trapped in a coal seam. That gas can only be accessed by drilling through the coal, and it must be removed by anyone who wants to mine the coal (for safety reasons), so it makes sense to tie the coal and the gas together under “minerals.”

Enter the sudden (to the Superior Court) realization that Marcellus Shale gas is likewise trapped in a rock formation, and things get tricky. All the logic of coal bed methane seems to apply to the Marcellus. That would mean whoever owns the mineral estate owns the gas. Until now, it has been assumed that whoever owns the minerals does not own the gas, which must be specifically named in a deed or lease to be owned. All Marcellus Shale leases are based on this interpretation.

The Superior Court declined to decide the issue, instead remanding to the trial court with instructions to determine – as a factual matter – whether shale gas is more like coal bed methane or more like conventional gas. The answer to that question would decide the issue.

This decision brings the worst thing possible for the Marcellus Shale industry: uncertainty. It remains to be seen how the governor will react to this surprising development, and whether the Pennsylvania Legislature will be called on to draft a new statute that more clearly defines such ownership. For now, all the drilling companies are left wondering whether they leased land from the wrong people.

For three good summaries, click here:

http://www.mondaq.com/unitedstates/x/146924/Pennsylvania+Superior+Court+Issues+Opinion+In+Butler+v+Powers

http://marcellusdrilling.com/2011/09/is-marcellus-shale-a-mineral-an-important-question-in-pa/

http://www.klgates.com/files/Publication/4cc337e1-87b7-4cb9-b3d7-92631cd5aa1e/Presentation/PublicationAttachment/60721d83-7626-41b6-a9fb-970f131e539b/Alert_Marcellus_Mineral_092011.pdf

In order to meet PA’s Act 537 standards in a cost-effective way, two PA townships are taking steps to jointly operate a sewage treatment facility.

According to an article by the Wyoming County Press Examiner, Tunkhannock Township and Lemon Township have begun taking the necessary steps toward signing a contract for joint operation of the facility. One township has already spent a considerable amount of money in furtherance of the plan, so the other is seeking a loan to reimburse one-third of those funds. In the future, Tunkhannock will continue to pay two-thirds of expenses, and Lemon will pay one-third.

Act 537, administered by the DEP, requires local governments to engage in proper planning for all sewage disposal situations. The process is very comprehensive, and includes a review by the local health department. The DEP approves the plans at every step of the way.

Cooperation between local governments is becoming more and more popular in Pennsylvania, including a recent agreement between our own Pittsburgh and Wilkinsburg to share fire protection. Where regions are too fragmented and consolidation is too burdensome, municipalities are contracting with each other to share costs and improve services to their citizens. Since so many federal and state grants are drying up, cooperation allows local governments to maximize the return on their investments.

Intergovernmental cooperation agreements (ICA’s) are permitted by the Pennsylvania Constitution and 53 Pa.C.S. §§ 2303 and 2304. Municipalities are free to jointly perform “any function” that they could ordinarily do themselves.

To read the original article, click here: http://wcexaminer.com/index.php/archives/news/23709
To read the DEP’s explanation of Act 537, click here: http://www.dep.state.pa.us/dep/deputate/watermgt/wqp/Forms/Act537/Forms_537Plan.htm
To read the provision for intergovernmental cooperation in Title 53, click here: http://www.legis.state.pa.us/WU01/LI/LI/CT/HTM/53/00.023..HTM
And to learn more about intergovernmental cooperation in Pennsylvania, check out these sites:
www.igcsuccess.org
http://www.localgovernmentacademy.org/main.asp?ID=85

According to an article by the Associated Press, DEP Secretary Michael Krancer has suggested tightening certain gas drilling regulations contained in the Oil and Gas Act (58 P.S. § 601.201 et. seq.).

The recommendations include increasing the setback distance from private water wells to 500 feet, contained in § 601.205, and increasing the presumptive liability for drilling companies with regard to pollution of water sources contained in §601.208. Other changes include clarifications to permit conditions, contained in § 601.201.

Because the Oil and Gas Act is a statute, it will take more than a recommendation from the Secretary to get this done. We’ll have to wait and see how the PA legislature responds.

To read the full article in the Pittsburgh Post-Gazette, click here: http://www.post-gazette.com/pg/11154/1151119-100.stm

According to Don Hopey of the Post-Gazette, Governor Tom Corbett has reversed a decision he made in March about Marcellus Shale violation enforcement. On March 23, a memo was distributed by E-mail that required all natural gas well inspectors to obtain final approval from the Secretary of the DEP, Michael Krancer, before taking any action on regulatory issues. That included serving notice of violations.

By the account of John Hanger (former DEP Secretary), “more than 40 environmental and civic organizations” objected to that change. Senator Ferlo of Pittsburgh was also at the front of the line to challenge it. That was enough for Corbett, who quickly responded to restore the public’s confidence in the DEP’s ability to regulate. Objections came from expectations that the new rule would create substantial delays in enforcement, and that delaying notice of violations would encourage unlawful activity to continue.

On his blog, Hanger called the reversal “good news, indeed.”

The Post-Gazette article: http://www.post-gazette.com/pg/11123/1143606-503-0.stm?cmpid=newspanel4
Ferlo’s response: http://www.post-gazette.com/pg/11090/1136068-100.stm
John Hanger’s blog: http://johnhanger.blogspot.com/2011/05/must-read-post-gazette-confirms.html

The DEP is continuing an effort begun by former Secretary John Hanger to end the practice of sending wastewater to municipal treatment facilities. Before, many POTWs (publicly-owned treatment works) were allowed to accept up to 1% of their daily flow as Marcellus Shale wastewater. Now, with a new regulation in place for several months, the current Secretary is taking the next necessary step.

Last fall, Hanger amended Chapter 95, §§ 2 and 10 to require that all discharges into Pennsylvania waterways meet drinking water standards, which are 500 parts per million of total dissolved solids (TDS). In order to avoid conflict with this rule, current Secretary Krancer has called on drilling companies to stop sending wastewater to the POTWs. Fifteen of them were still operating under the old standard.

The vast majority of the Marcellus Shale industry recycles its flowback water. “Recycling” in this case usually means leaving the wastewater in huge rubber-lined pits until the solids settle out. (Other methods use filtration or evaporation technologies.) While the recycling process often leaves behind a small portion that is so saturated that it can’t be dealt with (sometimes called “produced water”), this still removes the bulk of the problem. On average, about 20% of drilling fluid flows back, and less than 25% of the flowback is “produced water.”

This growing trend allowed Secretary Krancer to support Hanger’s rule without causing friction with the industry. Also, Hanger’s rule still allowed those POTWs with older permits to continue under the pre-2010 standards; since those permits are now up for renewal, they will necessarily be “grandfathered” into the new 500 ppm rule. Krancer’s message acknowledges this automatic shift forward.

To read the DEP press release, click here:

http://www.portal.state.pa.us/portal/server.pt/community/newsroom/14287?id=17071&typeid=1

To read the 2010 Chapter 95 amendment, click here:

http://pabulletin.com/secure/data/vol39/39-45/2065.html

According to recent reports, Governor Corbett issued a new directive on March 23 to the DEP. It was sent via E-mail to members of the DEP staff, and was subsequently leaked to the press. The new rule says that any actions taken against Marcellus Shale drilling companies – including routine notice of violations – must be approved by top-level DEP officials. The catch is that those top-level officials are Mr. Corbett’s political appointees.

Democratic legislators reacted angrily. Jim Ferlo, a Pittsburgh state senator, is one of the lead voices against this new missive. His objections are several. First, announcing a rule through E-mail seems sneaky, especially since Corbett pledged “transparency” throughout his election campaign. Second, there has been no subsequent explanation of his reasons, except for a vague one-liner from his staff about increasing the consistency of enforcement.

Third, and most importantly, Ferlo predicted that the rule would have “a chilling effect on enforcement.” If a drilling company doesn’t receive notice of a violation, then – in all realistic probability – the illegal acts will continue without pause. And sending paperwork to the Secretary of the DEP for every single notice of a violation (of which there were about 1400 in the past year) could lead to unbelievable delays.

Corbett has not made a statement on the issue, and his staff has not offered an explanation as to why – as Senator Ferlo alleges – Marcellus Shale gas drilling is being given different treatment than all other industries in Pennsylvania.

Read the Post-Gazette story here: http://www.post-gazette.com/pg/11091/1136172-113.stm and here: http://www.post-gazette.com/pg/11094/1136931-503.stm

The Delaware River Basin Commission has proposed new rules for regulating natural gas drilling within its jurisdiction. Since the DRBC is a compact commission signed onto by PA, NY, NJ, DE, and the federal government, it has specific authority to do so. Some of the regulations are a dramatic departure from Pennsylvania’s rules, including a 400-foot setback distance, a much bigger financial assurance paid by the drilling company, and the requirement that the site must be problem-free for two growing cycles after the well is plugged before the financial assurance will be refunded.

Read the proposed regulations here: http://www.state.nj.us/drbc/naturalgas-draftregs.pdf

And find out how to comment here: http://www.state.nj.us/drbc/notice_naturalgas-draftregs.htm

http://www.schweitzerfellowship.org/features/us/

It’s a 13 month long commitment from April 1st 2011 – April 30 2012, so (1Ls, 2Ls, and joint degree students are encouraged to apply) for graduate students, during which a fellow develops a service oriented project serving a vulnerable community. If you’re interested, the deadline is Friday, February 11th.

Fifth, and finally for now, Environmental Law Institute student memberships are now free! Check out the information at http://www.elistore.org/member.asp.

That’s it for now. We hope you can take advantage of some of these great opportunities. As always, if you have any questions or comments just send us an email. Please keep an eye out for an email about our resume/cover letter workshop, movie screenings, and ELC activities, which will be coming soon.

We’re changing our Facebook site to a “page” instead of a “group.” The change is an important one, because a “page” is what companies use, and it gives us a lot more tools for reaching out to people and keeping our members up to speed on our events. So, this means you’ll need to join the new one as soon as possible. The old one will be deleted soon.

The address is: http://www.facebook.com/home.php#!/pages/University-of-Pittsburgh-Environmental-Law-Council/184368291594286?v=wall