Natural gas producers in Pennsylvania’s Marcellus Shale will have to comply with local zoning codes after a state appellate court struck down a new law that sought to pre-empt municipal ordinances with a statewide land-use standard.
Pennsylvania’s Commonwealth Court said Thursday that the pre-emption provisions in the controversial Act 13 were unconstitutional because they allow incompatible uses in zoning areas and fail to protect the interests of neighboring property owners.
The decision was a big victory for seven townships and an environmental group who sued state officials to block the parts of the law that prevented municipalities exercising control over gas drilling within their jurisdictions.
And it was a blow for the natural gas industry which argued that it needs a uniform statewide land-use standard in order to fully develop Pennsylvania’s shale-gas reserves, some of the richest in the U.S.
A Call for Regulatory Certainty and Uniformity
“The premise for the General Assembly’s action earlier this year was to provide certainty and predictability that encourages investment and job creation across the Commonwealth,” said the Marcellus Shale Coalition, an industry group, after the ruling.
“Lack of uniformity has long been an Achilles’ heel for Pennsylvania and must be resolved if the Commonwealth is to remain a leader in responsible American natural gas development and reap the associated economic, environmental and national security benefits,” the MSC said.
Republican Governor Tom Corbett, who signed Act 13 into law in February, and is a strong supporter of the gas industry, has appealed the ruling to the Pennsylvania Supreme Court.
Corbett said the pre-emption of local land-use regulations is “critically important” for the success of the law, which also charges impact fees to be paid by energy companies to local communities to offset the effects of the gas industry, and to state agencies for environmental protection.
“It is important to note that the provisions casually set aside by the court were the result of months of compromise and negotiation, with significant input and support from Pennsylvania’s local government associations,” Corbett said in a statement Friday. He said the law was backed by more than 1,400 municipalities.
It will be more than just a nuisance,” – Lynch
“It is the General Assembly and Governor’s prerogative to establish policy; it is the court’s job to pass judgment on the constitutionality of this policy, not its merits,” Corbett said.
In a 66-page ruling, the court said the law’s pre-emption provision “violates substantive due process because it allows incompatible uses in zoning districts and does not protect the interests of neighboring property owners from harm, alters the character of the neighborhood, and makes irrational classifications.”
It declared the section null and void, and barred the state from enforcing it.
The ruling, if upheld, may slow the industry’s momentum in Pennsylvania because it strengthens the ability of municipalities to deny gas development if it conflicts with local zoning regulations, one analyst said.
“It will be more than just a nuisance,” said Michael Lynch, president of Strategic Energy and Economic Research, a consultancy in Massachusetts.
He predicted that the decision will encourage opponents of the gas industry in Pennsylvania and New York but is unlikely to have much effect in western gas states like Colorado, where the industry is more mature and opposition more muted.
Still, some producers may see the ruling as a blessing in disguise because it will allow them to avoid drilling in areas that they have leased at a time when prices are low and dry-gas development is already slowing.
On a weekend that sees a major public protest against fracking in Washington DC, the ruling may also boost critics who argue that the practice is contaminating aquifers with toxic chemicals that pose a significant public health risk.
“This is a great victory for the people of Pennsylvania, for local democracy, for property rights, for our public health, and for the clean water supplies on which we all depend,” said Jordan Yeager, attorney for three of the plaintiffs.