Landowner challenges longtime drilling moratorium in watershed

By Ellen M. Gilmer | 05/18/2016 08:20 AM EDT

Six years after an obscure agency began blocking oil and gas drilling in a huge swath of the Marcellus Shale, a landowner is challenging the move in federal court.

Wayne Land and Mineral Group LLC filed suit yesterday in the U.S. District Court for the Middle District of Pennsylvania. The group owns 180 acres of surface and mineral rights in Wayne County, Pa. — 75 of which are located in the Delaware River Basin, off-limits to drilling since 2010.

The Delaware River Basin Commission, an interstate compact with jurisdiction over development in the 13,539-square-mile watershed, has enforced a de-facto moratorium on drilling for six years while crafting rules for hydraulic fracturing. Before the drilling freeze, many Wayne County residents had already signed contracts with developers.

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"As a result of the Commission’s unlawful assertion of jurisdiction, WLMG is unable to develop a Well Pad on the Property and to thereby recoup its upfront costs and earn a reasonable return on its investment," attorneys for the group wrote in their complaint, adding that the moratorium infringes on landowners’ property rights.

The group’s argument is straightforward: The commission has authority over projects that significantly affect water resources but has adopted an overly broad interpretation of that power to regulate "nearly every form of human endeavor," including oil and gas development.

The well pad that WLMG is seeking to construct would be designed for natural gas exploration, the lawsuit says, not for any project that would involve the commission’s traditional area of oversight: "the conservation, utilization, control, development or management of water resources."

The commission did not respond to a request for comment.

Industry advocate Tom Shepstone called the lawsuit a necessary challenge to the commission’s "power grab."

"If a company proposes a water withdrawal, such an activity can, of course, be regulated, just as it’s done elsewhere, but the simple act of developing a well pad, drilling a gas well or other land use activities per se cannot, especially when the water and wastewater services are being secured from other approved sources," he wrote yesterday on his website Natural Gas Now. "The DRBC was never intended to be a super-agency dictating land use policy to the states. It has no such powers."

A win for the group would mean unlocking natural gas resources throughout Pennsylvania’s portion of the Delaware River Basin — though low commodity prices mean a rush to drill would be unlikely.

The Delaware Riverkeeper Network, an environmental group, last year pushed for a permanent ban on drilling in the basin. In a study released last year, the group found that opening the area to drilling would disturb 18 to 26 square miles of land and affect 40,000 people living near likely well sites (EnergyWire, Aug. 12, 2015).

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