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On Thursday, July 26, 2012, the Pennsylvania Commonwealth Court
issued an order voiding those provisions of Act 13 that would have
required municipalities to change their zoning rules to accommodate
natural gas development activities.1 Act 13, a landmark
piece of legislation in Pennsylvania that became law in February of
this year, imposed impact fees on unconventional wells (e.g.,
horizontal shale gas wells) and established uniform regulatory
requirements throughout the commonwealth for oil and gas
operations, expressly preempting local regulation.2
According to the court, because Act 13 required municipalities to
allow drilling operations, impoundments, and gas compressor
stations, among other things, in all zoning districts, it failed to
protect the interests of neighboring property owners from harm,
would alter the character of municipal neighborhoods, and made
irrational classifications. As a result, the court concluded that
enforcement of those provisions would result in substantive due
process violations under the Pennsylvania Constitution.
In addition to voiding the Act's attempted preemption of
local municipal regulation of oil and gas operations, the
Commonwealth Court's decision also voids the provision at 58
Pa. C.S. § 3215(b)(4) allowing the Department of Environmental
Protection (DEP) discretion to waive statutory setback requirements
applicable to streams, springs, bodies of water and wetlands.
Concluding that the legislation fails to give any guidance to DEP
on how to exercise its discretion, the court reasoned DEP was
therefore granted unfettered power to make "legislative policy
judgments" more properly reserved to the General Assembly. It
is important to note, however, that DEP's ability to grant a
variance with respect to setbacks from buildings, water wells and
water supplies used by a public water supplier is not affected.
The Commonwealth Court's ruling represents a significant
victory for advocates of local control, but a potential major
setback for oil and gas operators, including midstream and
gathering pipelines, who sought the regulatory certainty intended
by Act 13. That being said, the proponents of Act 13 will almost
certainly seek allocatur to the Pennsylvania Supreme
Court.3 In the meantime, and for the foreseeable future,
municipalities will continue to be able to craft zoning ordinances
that determine where oil and gas operations may take place.
Footnotes
1 Robinson Township v. Commonwealth, No. 284 M.D. 2012
(Cmwlth. Ct. July 26, 2012). A copy of the order is available here
2 The court had preliminarily enjoined certain provisions
of Act 13 in April.
3 The court did signal that a legislative remedy may be
available to cure its nullification of § 3215(b)(4) by
providing proper guidance to DEP on when a waiver may be
granted.
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