United States: Fourth Circuit Concludes That West Virginia State Law Preempts Local Ordinance Banning Oil And Natural Gas Wastewater Storage

Last Updated: September 22 2017
Article by Thomas C. Ryan, Travis L. Brannon, Emily W. Weiss and Anthony R. Holtzman

On August 30, 2017, in EQT Production Company v. Wender, the United States Court of Appeals for the Fourth Circuit affirmed a federal district court's invalidation of a West Virginia county's ordinance banning oil and natural gas wastewater storage at horizontal drilling sites and underground injection control ("UIC") wells. The Fourth Circuit concluded that the West Virginia Oil and Gas Act (the "Oil and Gas Act") and West Virginia UIC Program preempted the ordinance. 1The Fourth Circuit's ruling is the latest development in the evolving caselaw regarding whether, in the Appalachian Basin, local governments are preempted from regulating oil and gas operations.2

The Wender Decision

In its decision, the Fourth Circuit ruled in favor of EQT Production Company ("EQT") by affirming the U.S. District Court for the Southern District of West Virginia's holding that Fayette County's (the "County") ban on wastewater disposal is preempted by the state and federal laws under which West Virginia issues injection well permits.3

In January of 2016, Commissioners of Fayette County, West Virginia (the "County") enacted an "Ordinance Banning the Storage, Disposal, or Use of Oil and Natural Gas Waste in Fayette County" (the "Ordinance"), which explicitly prohibited the use of UIC wells for purposes of permanently disposing of natural gas waste and oil waste. 4Immediately afterwards, EQT challenged the Ordinance in the district court, asserting that it was preempted by the comprehensive state and federal regulations that are associated with West Virginia's UIC permit program, the federal Safe Drinking Water Act, and the Oil and Gas Act. 5 EQT asked the court to enjoin the enforcement of the Ordinance. 6 In response, the County argued that the savings clause in West Virginia's Water Pollution Control Act ("WPCA") gives it the authority to abate anything that its commission determines to be a public nuisance, including UIC wells. 7

The Fourth Circuit explained that, in West Virginia, county commissions have only the powers that are granted to them by the state, meaning that when a "provision of a municipal ordinance is inconsistent or in conflict with a statute enacted by the Legislature the statute prevails and the municipal ordinance is of no force and effect." 8 The Fourth Circuit stated that, as a result, "West Virginia law simply does not permit a county to ban an activity—here, the permanent disposal of wastewater in Class 2 UIC wells—that is licensed and regulated by the state pursuant to a comprehensive and complex permit program." 9

The Fourth Circuit also explained that the County's reliance on the savings clause in West Virginia's WPCA was misplaced because West Virginia regulates UIC wells not only under that statute but also under its Oil and Gas Act, which does not contain a savings clause. 10 Rejecting the County's broad interpretation of the WPCA's savings clause, the Fourth Circuit stated that the purpose of the clause is to preserve private citizens' rights to bring a nuisance action against a state-permitted activity, not to ban that activity altogether. 11

Finally, the Fourth Circuit held that the Ordinance's restriction on wastewater storage at conventional well sites was preempted because it conflicted with the Oil and Gas Act.12 Explaining that, under the Oil and Gas Act, "the legislature has vested in the state DEP the exclusive authority over regulation of the state's oil and gas resources," the Fourth Circuit concluded that by banning wastewater storage unless the storage was temporary and the wastewater would be permanently disposed in another county, the Ordinance was in fundamental conflict with the Oil and Gas Act and DEP regulations, which do not prohibit or impose temporal limits on wastewater storage. 13

In applying West Virginia law, therefore, the Fourth Circuit struck down a local ordinance that purported to regulate the mechanics of oil and gas operations. The court, however, did not address whether local ordinances may impose restrictions on where oil and gas operations may occur. 14

The Future of Local Regulation of Oil and Gas Operations in West Virginia

Generally speaking, under the evolving preemption caselaw in West Virginia, local governments cannot enact ordinances that regulate the development of UIC wells. However, oil and natural gas production and associated companies operating in the Appalachian Basin should continue to monitor these issues so that they have a full understanding of their rights and obligations in relation to local government actions that impact their operations.

Footnotes

1 See EQT Prod. Co. v. Wender, No. 16-1938, 2017 WL 3722448, at *1 (4th Cir. Aug. 30, 2017).

2 The caselaw on this topic has been evolving not only in West Virginia, but also in Ohio and Pennsylvania. In Ohio, although a local ordinance may not restrict oil and gas operations that the state has specifically authorized, it is unclear whether and how "traditional goals of zoning" may be used to affect those operations. See State ex rel. Morrison v. Beck Energy Corp., 37 N.E.3d 128, 131 (Ohio 2015) (J. O'Donnell, concurring). In Pennsylvania, moreover, statutory provisions that first appeared in the state's 1984 Oil and Gas Act, which are once again controlling on the issue of preemption of local ordinances after the decision in Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013), expressly preempt local ordinances that attempt to regulate well site procedures and operations but not local ordinances that regulate well location. See Robinson Twp., 83 A.3d at 977–84 (invalidating portions of Pennsylvania's Act 13).

3 Wender, 2017 WL 3722448, at *1.

4 Id. at *3.

5 Id.

6 Id.

7 Id.

8 Id. at *7 (internal citations omitted).

9 Id.

10 Id. at *8.

11 Id. at *9.

12 Id. at *10.

13 Id. at *10–11.

14 Several years before Wender, the Circuit Court of Monongalia County, West Virginia, invalidated a ban on hydraulic fracturing that the City of Morgantown had imposed, ruling that the state's interest in oil and gas development and production provides the DEP with exclusive control over this issue. See NE Natural Energy, LLC v. City of Morgantown, W. Va., No. 11-C-411 (W. Va. Cir. Ct. Monongalia Aug. 12, 2011). About a year later, the Morgantown City Council passed six ordinances that are unique in West Virginia in that they limit gas drilling to a certain area, namely, a 600-acre area surrounding the city's airport. Those ordinances have not been challenged in court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions