PA Supreme Court Rules on Permissible Local Land Use Regulation of Natural Gas Well Drilling Activity

 

Submitted by
Blaine A. Lucas, Esquire
Babst Calland Clements & Zomnir
2 Gateway Center
Pittsburgh, PA 15222

412-394-5400

 

On February 19, the Pennsylvania Supreme Court issued two landmark decisions addressing the extent to which the Pennsylvania Oil and Gas Act (the “Act”) preempts, or supersedes, local municipal regulation of gas well drilling activity. Both decisions were unanimous.

 

In Huntley & Huntley v. Borough Council of the Borough of Oakmont, the Supreme Court reversed the Commonwealth Court’s decision that a local ordinance was preempted by the Act. The Supreme Court ruled that a municipality has the power to designate zoning districts where oil and gas wells can be permitted or prohibited.

 

In Range Resources – Appalachia, LLC v. Salem Township, the Supreme Court upheld the invalidation of a township subdivision and land development ordinance that extensively regulated gas well drilling operations in the township, on the basis that the township was attempting to enact its own “comprehensive regulatory scheme relative to oil and gas development within the municipality.”

 

The implications of these two decisions are significant for both the oil and gas industry and Pennsylvania local governments. The most notable impact is that as a result of the decision in Huntley & Huntley oil and gas companies will have to comply with municipal zoning ordinances which (1) require an operator to go through a public hearing and approval process as part of a conditional use or special exception application; or (2) in the most aggressive scenario, prohibit the drilling of wells altogether in designated zoning districts. On the other hand, the Range Resources opinion makes it clear that a municipality cannot adopt a “regulatory apparatus parallel to the one established by the Act and implemented by the Department” of Environmental Protection on matters such as well bonding, drilling permits, site restoration and plugging. Whether there are any other permissible categories of municipal regulation between these two extremes remains open to question.

BCCZ’s Natural Resources Development Group closely tracks state and local regulatory and litigation developments. For more information regarding the cases discussed above or their impact on your business, please contact Blaine A. Lucas at (412) 394-5657 or blucas@bccz.com, Joseph K. Reinhart at (412) 394-5452 or jreinhar@bccz.com or Kevin J. Garber at (412) 394-5404 or kgarber@bccz.com.

 

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