This decision seemingly restores each local municipality's power to apply zoning ordinances restricting oil and gas operations. As a result, oil and gas operators will likely encounter a more unpredictable regulatory environment in their development.
In a recent decision, the Pennsylvania Supreme Court held as unconstitutional several provisions in Act 13, which, in part, amended Pennsylvania's Oil and Gas Act to permit oil and gas operations in all zoning districts.
In February 2012, Pennsylvania Governor Thomas Corbett signed Act 13 into law. Act 13, inter alia, created a uniform regulatory environment for oil and gas operators by preventing local municipalities from passing zoning ordinances that were more restrictive on natural gas development than other industrial uses. Section 3303 of Act 13 preempted local regulations of the oil and gas industry and provided that Act 13 would occupy the field for regulating this industry. Moreover, Section 3304 of the Act limits local governments' ability to place conditions on the construction of oil and gas operations. The impact of Act 13 was to permit as of right heavy-duty industrial natural gas uses, including storing of wastewater (a drilling by-product), into all existing zoning districts—residential, commercial and agricultural alike. Finally, Section 3215(b)(4) of Act 13 granted automatic waiver of zoning setback requirements upon the submission of a plan identifying the additional measures, facilities or practices to be employed during well site construction, drilling and operations.
In a 4-2 decision, Robinson Township v. Commonwealth, the Pennsylvania Supreme Court majority found these provisions to be unconstitutional. The justices in the majority were, however, split on the grounds for rejecting the law. Justices Castille, Todd and McCaffery ruled it violated the Environmental Rights Amendment of the Pennsylvania Constitution; in a separate concurring opinion, Justice Baer found due process grounds for striking down the provisions. Justices Saylor and Eakin issued separate dissents.
In its opinion, the court confirmed that, under the Environmental Rights Amendment, Pennsylvania residents have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Additionally, it found that the Environmental Rights Amendment appoints the Commonwealth of Pennsylvania as trustee of Pennsylvania's natural resources. The majority further found that by permitting as of right oil and gas operations in all existing zoning districts, Act 13 departed from Pennsylvania's existing zoning conventions and argued that Act 13 required the Commonwealth effectively to abandon its role as trustee of Pennsylvania's natural resources. Specifically, it held that Sections 3215(b)(4) and (d), 3303, and 3304 of Act 13 are incompatible with the Commonwealth's duty as trustee of Pennsylvania's public natural resources and, therefore, unconstitutional.
This decision seemingly restores each local municipality's power to apply zoning ordinances restricting oil and gas operations. As a result, oil and gas operators will likely encounter a more unpredictable regulatory environment in their development. However, there is much to digest in the more than 200-pages of opinions—majority, concurring and dissents—and only time will tell of its full impact upon oil and gas operations in the Commonwealth.
If you have any questions about this Alert, please contact George J. Kroculick, David R. Augustin, any of the attorneys in our Real Estate Practice Group or the attorney in the firm with whom you are regularly in contact.
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