Search
Close this search box.

PUC Divested Of Remaining Marcellus Zoning Duties

In Robinson Township v. Commonwealth, 83 A.3d 901(Pa. 2013) the Pennsylvania Supreme Court invalidated key provisions of Act 13, the statute that removed from local zoning control the power to regulate oil and gas operations through restrictions on the placement and operation of  oil and gas facilities.  The Court remanded to the Commonwealth Court to consider whether other provisions of Act 13, including provisions that give the PUC power to review local zoning ordinances and withhold impact fees, remain viable.

The Commonwealth Court on remand has now invalidated and enjoined enforcement of those other provisions that give the PUC jurisdiction to review the provisions of local ordinances to determine whether they comply with Act 13 and, if not, to withhold impact fees imposed on drillers and operatorsto alleviate the “impacts” of drilling on municipalities or to impose attorney fees and costs on the municipalities.  Robinson Township v. Commonwealth, __A.3d __ (Pa. Cmwlth. 2014)(July 17, 2014).

Specifically, the Commonwealth Court enjoined enforcement of sections 3302 and 3305 to 3309 of the statute.  Section 3302 provides that “[n]o local ordinance adopted pursuant to the MPC [Municipalities Planning Code] or the Flood Plain Management Act shall contain provisions which impose conditions, requirements or limitations on the same features of oil and gas operations regulated by Chapter 32 or that accomplish the same purposes as set forth in Chapter 32. The Commonwealth, by this section, preempts and supersedes the regulation of oil and gas operations as provided in this chapter.”  The Court held that the Supreme Court’s invalidation of the Act 13’s preemption of local regulation necessarily invalidates section 3302.

The Commonwealth Court invalidated sections 3305-3309 for similar reasons.  Section 3305 provides that municipalities may seek an advisory opinion from the PUC as to whether a proposed ordinance complies with Act 13, and provides that well operators and residents may seek similar opinions once a local ordinance is enacted.  Section 3306 provides that any person aggrieved “by the enactment or enforcement of a local ordinance that violates the MPC, this chapter or Chapter 32 (relating to development)” may bring an action in the Commonwealth Court “to invalidate the ordinance or enjoin its enforcement” whether or not initial review by the PUC was sought.  The Court determined that the effect of the Supreme Court’s decision “is that the statutory scheme cannot be implemented. Local zoning matters will now be determined by the procedures set forth under the MPC and challenges to local ordinances that carry out a municipality’s constitutional environmental obligations. Because challenges to those ordinances must be brought in common pleas court, it would further frustrate the purpose of the Act in having a uniform procedure.”  The Court invalidated  section 3307 (relating to the award of attorney fees and costs in actions brought under section 3306), section 3308 (relating to the withholding of impact fees for municipalities enacting or enforcing local ordinances that violate the MPC or Chapters 32 or 33), and  section3309(a) (relating to the applicability of Chapter 33) for similar reasons.

A copy of the Commonwealth Court’s decision is available here.

Pennsylvania Supreme Court Held Key Provisions of Act 13 Unconstitutional under the Environmental Rights Amendment (ERA)

The Pennsylvania Supreme Court held key provisions of Act 13 unconstitutional under the Environmental Rights Amendment (ERA) of the Pennsylvania Constitution in a plurality opinion on December 19, 2013.  Act 13 was designed to streamline regulation of the oil and gas industry by setting statewide zoning standards and administrative review procedures, which posed significant financial ramifications for non-compliant municipalities.  The Court specifically held that the provisions mandating municipal zoning standards, such as permitting industrial oil and gas operations as a use of right in every zoning district throughout the state, are unconstitutional. These provisions were overturned because the legislature has abrogated constitutionally proscribed municipal duties to protect the rights guaranteed by the ERA.  The Court also held that provisions of the act imposing a waiver process for mandatory setback from waterways, administered by DEP, also violated the ERA.

The ERA guarantees the people, including future generations, the fundamental right to clean air, pure water, and the preservation of natural resources.  The ERA designates the Commonwealth (which includes municipalities) as the trustee of these resources, to conserve and maintain for the benefit of the people.  This plurality opinion is the first time the Court has addressed how the Commonwealth’s fiduciary duty as a trustee of the environment limits the power of the legislature, in particular its police power to regulate for the general welfare and economic prosperity.

The plurality decided the legislature, while promoting an industry that will admittedly benefit the state’s economy, failed its fiduciary duty because the Act 13 regime does not adequately fulfill its obligations under the ERA “to prevent degredation, diminution, and depletion of our public natural resources.”  This policy decision is based on the finding that “a new regulatory regime permitting industrial uses as a matter of right in every type of pre-existing zoning district is incapable of conserving or maintaining the constitutionally-protected aspects of the public environment and of a certain quality of life. In Pennsylvania, terrain and natural conditions frequently differ throughout a municipality, and from municipality to municipality. As a result, the impact on the quality, quantity, and well-being of our natural resources cannot reasonably be assessed on the basis of a statewide average. Protection of environmental values, in this respect, is a quintessential local issue that must be tailored to local conditions.”  The plurality instructed that to comply with the ERA, the legislature “must exercise its police powers to foster sustainable development in a manner that respects the reserved rights of the people to a clean, healthy, and esthetically-pleasing environment.”

The court also remanded the issues of whether Act 13 is specialized legislation in violation of Art. III Sec. 32 of the Pennsylvania Constitution, and whether Act 13 permits a “taking” by private corporations in violation of the eminent domain doctrine, for reconsideration by the Commonwealth Court.

The full opinion can be found here:

http://www.pacourts.us/assets/opinions/Supreme/out/J-127A-D-2012oajc.pdf?cb=1

Act 13’s Local Zoning Provisions Put On Hold

Commonwealth Court Grants Preliminary Injunction Halting Zoning Limits in Act 13

The Pennsylvania Commonwealth Court preliminarily enjoined operation of the provision of Pennsylvania’s new Marcellus Shale Law that limits the power of municipalities to regulate the booming natural gas exploration industry.  The court enjoined the effectiveness of Section 3309 of the Act for 120 days, and denied the motion to enjoin the remainder of the Act’s provisions.  The court stated that the original period of 120 days under the Act to amend local zoning ordinances to comply with Act 13 was not sufficient.   “[M]unicipalities must have an adequate opportunity to pass zoning laws that comply with Act 13 without fear or risk that development of oil and gas operations under Act 13 will be inconsistent with later validly passed local zoning ordinances.  For that reason, pre-existing ordinances must remain in effect until or unless challenged pursuant to Act 13 and are found to be invalid,” Senior Judge Quigley stated.  He went on to suggest that the wider challenge to the constitutionality of the local zoning limitations is questionable, saying that he is not convinced that the “likelihood of success on the merits is high.”  The Commonwealth may appeal the ruling as a matter of right to the Pennsylvania Supreme Court, and if it does, the Commonwealth Court’s order will be subject to an automatic stay, thereby nullifying the effect of the injunction, pending further order of either the Commonwealth Court or the Supreme Court.

For the complete text of Act 13, please see:  Act 13.pdf 

Pennsylvania Gets the Cracker

Shell Oil Co. chooses Pennsylvania as home for its new natural gas processing facility.

According to the Pennsylvania Petroleum Marketers & Convenience Store Association, Shell Oil Co. announced today that it will build its $3.2 billion dollar Ethane cracker plant in Beaver County, Pennsylvania resulting in excess of ten thousand jobs while providing a convenient location to convert Pennsylvania Marcellus Shale Gas into ethylene.  Ethylene is used to make the raw material for the production of plastic products.  The Marcellus Shale Gas contains higher quantities of ethane and other thicker liquid gases that can be more valuable than regular methane because of their use in the production of plastics.

The Corbett Administration won the much coveted cracker facility over the strong sales pitches of the Ohio and West Virginia Governors.  Last month’s passage of Act 13 was one of Pennsylvania’s selling points, giving up to five percent of natural gas impact fees to “infrastructure projects related to the natural gas industry.”  Adding to Act 13’s allure was the Keystone Opportunity Zone, which offers tax breaks of up to fifteen years for those companies investing at least $1 billion in new Pennsylvania projects.

In light of the recent refinery closings by Sunoco at Marcus Hook and ConocoPhillips in Trainer, as well as the soon to be closed Sunoco Philadelphia refinery, Pennsylvania could use the Shell Oil cracker facility to replace some of the lost jobs.