MARCELLUS SHALE

'Topsy-turvy' legal landscape in aftermath of nixed Pa. drilling law

ALLEGHENY TOWNSHIP, WESTMORELAND COUNTY, Pa. -- Just send over a moving truck, and Bob Taylor will be on his way. After 22 years in rural Allegheny Township, 76-year-old Taylor and his wife Beverly, 71, are afraid the natural gas well slated for their neighbor's land will spell an end to their quiet lifestyle.

"I'm just so disgusted," Taylor said from his house about 30 miles northeast of Pittsburgh. "This is our dream home, and they're ruining it."

It's no surprise that Consol Energy Inc. subsidiary CNX Gas Co. took an interest in the area. Allegheny Township sits atop the Marcellus Shale formation, where hydraulic fracturing and horizontal drilling have sparked a nationwide gas boom. But after judges tossed an industry-friendly state zoning law last year, the Taylors thought the area around their home would be off limits to drilling.

"It's zoned residential and agricultural, not industrial," Taylor said. "And they're going ahead and doing it anyhow."

Neighbor Patricia Hagaman said the well pad would spoil the rustic character of their neighborhood, tucked in the rolling hills of Willowbrook Road.

"When you choose to live out here, you know it's going to be give and take," she said, "but not an industrial brownfield."

The neighbors-turned-activists have worked since July to halt well construction, challenging both the CNX well and the township ordinance that allowed the company to locate the project about 1,000 feet from Bob and Beverly's house.

Their exasperation is a glimpse into the mess of legal uncertainty that has followed the Pennsylvania Supreme Court's recent decision to strike down an industry-favored measure that would have allowed oil and gas development in nearly every corner of the Keystone State.

Hailed at the time as monumental, the December 2013 decision emphasized state and local governments' duty to protect the environment for the public and follow rational zoning laws that keep compatible land uses together. Industry groups called the ruling a dangerous, anti-development precedent, while local groups and advocates across the country celebrated it as a groundbreaking shift toward environmental protection and local control.

But in the wake of the ruling, many municipal governments have struggled to enforce existing zoning plans or craft new ones. Legal challenges are flying from landowners who say the Supreme Court decision means no drilling in their backyards, and disagreement over the judges' intent means local zoning issues are likely headed straight back to the courtroom.

"If you look at municipalities and the topsy-turvy world they've had since Act 13 passed, for a municipal officer, that would make you dizzy," said Christopher Papa, a New Castle-based attorney who has helped the Taylors and other landowners challenge pro-drilling zoning ordinances in western Pennsylvania. "It's sort of created a mess."

'Nothing changes out here, normally'

Robinson Township, the community at the center of last year's big decision from the Supreme Court, is perhaps the most topsy-turvy example of all. In 2012, Robinson Township's three drilling-resistant supervisors led the community to join six other municipalities in filing suit against Pennsylvania Gov. Tom Corbett (R) and state agencies for enacting Act 13, the oil and gas law with the controversial zoning provision.

The lawsuit came to be known simply as Robinson Township, but by the end of 2013, the political winds had changed in the namesake rural community 20 miles west of Pittsburgh.

Pro-drilling candidates overtook two supervisor positions in the November 2013 election, and in August 2014 they passed a new zoning ordinance making it easier for companies to drill in rural residential and agricultural districts. Where drillers previously needed a public hearing and special exception from the zoning board to drill in residential or agricultural areas, they now must simply meet criteria set by the township supervisors.

"The new ordinance makes it easier to construct and operate an oil and gas well in the agricultural district than a seed store," critics said in a September statement when they filed a formal challenge to the local ordinance.

The landowner challenge hinges in part on the Pennsylvania constitution's environmental rights amendment -- a key element of the Supreme Court's plurality opinion -- which requires state and local government officials to maintain natural resources for public benefit. The landowners argue that "sweeping" changes to the zoning rules in the township amount to a violation of the constitutional amendment because the permit criteria do not adequately weigh environmental concerns.

"In contravention of the Environmental Rights Amendment, the [ordinance] fails to conserve and maintain the constitutionally protected aspects of the public environment and of a certain quality of life for all the people," attorney Dwight Ferguson argued in the challenge.

Township officials will review the challenge during the coming months. If they reject it, the landowners may take their case to state court.

Similar battles are playing out in other western Pennsylvania communities. Several challenges are underway in Pennsylvania's Lawrence County, for example, where industry is facing a zoning challenge and a nuisance lawsuit from Pulaski Township landowners concerned about oil and gas activity near their homes. And in Middlesex Township, two environmental groups and a parents group are suing to stop Rex Energy Corp. from drilling near several school buildings.

"You must balance the obligations to protect everyone's right to a healthy environment with the competing other interests," said Jordan Yeager, an attorney who was involved in the original Act 13 litigation and is now representing the Middlesex groups. "You can't have irrational zoning districts."

Back in Allegheny Township, tensions are coming to a boil. The Willowbrook Road neighbors filed their challenge in September and hope to have a hearing next month. Meanwhile, township meetings have turned hostile, and bulldozers continue to clear the woodlands behind the Taylors' house to prep for CNX's well pad.

"Nothing changes out here, normally," said Dee Frederick, who lives next door to the Taylors and is involved in the challenge. "Since July, the whole atmosphere has changed. It's like a plague of drilling coming in."

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In a statement provided to EnergyWire, Consol said it is committed to cultivating good relationships with neighbors to oil and gas operations.

"As a 150-year old company with deep roots in Western Pennsylvania, the partnerships we enjoy with the communities where we live and work are very important to us," the statement said. "We work every day to ensure that we are operating in a responsible manner and complying with not only the letter, but also the spirit of all laws and regulations governing our operations."

Supreme meaning

So, is drilling near homes legal? Pennsylvania lawyers are still parsing the Robinson Township decision to figure that out.

The Supreme Court's rationale was two-pronged: Three judges formed a plurality opinion holding that Act 13 violated the Pennsylvania Constitution's environmental rights amendment because it weakened existing protections enforced through local zoning. A fourth judge agreed with the result, clinching the case for local governments, but on the grounds that Act 13 violated due process by effectively requiring towns to violate their own zoning plans and prioritize industry access over property rights.

Interpretations of the decision vary widely. Many landowners, such as the Taylors, see it as a straightforward declaration that drilling is not compatible with residential areas. They view local ordinances that allow drilling in all zones as "mini-Act 13s" just as unconstitutional as the state law.

"Here we are, we win a really important case, and yet we have this fight on our hands on the local level because the gas industry has chosen to ignore it like it never happened even," said anti-fracking activist Ron Slabe, who lives just outside Allegheny Township in Upper Burrell, which is considering its own zoning changes for oil and gas.

Slabe and many of the Allegheny Township challengers want drilling to be permitted only in industrial zones, a notion industry has dismissed as unrealistic.

"If that proposition were accepted, most oil and gas development in the Commonwealth would come to a halt," said Blaine Lucas, an attorney representing industry and local governments in several zoning challenges. "Those areas are so limited that it would effectively preclude most oil and gas activity."

Lucas added that many industrial zones are located near rivers or adjacent to dense residential areas, making the zones a worse fit for gas wells than rural areas.

Other challengers focus on the due process factor, arguing that municipal governments with ordinances that allow drilling in all districts have rendered their own zoning rules irrational.

"We're not against industry; we're not against job creation," said Papa, the Allegheny Township lawyer. "But once upon a time, we came up with the idea of zoning. We just don't see how you can permit one industrial use, to the exclusion of all others, in nonindustrial zones. If it goes on like this, zoning itself becomes incoherent."

Again, industry disagrees. Lucas argues that the Supreme Court decision simply entrusted zoning decisions to local officials, removing the state from the process and allowing local governments to decide where drilling fits best in their communities.

"The notion that oil and gas development isn't compatible with, for example, agricultural uses is refuted by the fact that they have coexisted for decades and by the fact that most of those agricultural lands have been leased by farmers to oil and gas operators," Lucas said.

Clarity on the issue is a long way off. Following township-level challenges, lawsuits go before the Court of Common Pleas and then to the Commonwealth Court -- a time-consuming process that will last well into 2015 and beyond. In the meantime, some local zoning ordinances lack clear language on whether oil and gas operators have to halt operations during appeal proceedings.

Even if the case lands back before the state Supreme Court justices, a decision building on Robinson Township is unpredictable. One justice from last year's environmental rights-focused opinion has retired and another is stepping down at the end of the year -- leaving the plurality opinion's argument open to scrutiny from the new court.

But at least one Pennsylvania judge has already used Robinson Township in favor of landowners. In August, a judge in Lycoming County found that Fairfield Township leaders failed to follow the environmental rights amendment and consider the impact proposed well pads would have on nearby landowners. Attorneys representing the landowners said they hoped the ruling would be the first of many (EnergyWire, Sept. 4).

'It all hinges on money'

Legal arguments aside, landowners say money is sure to be a deciding factor in the outcome of the various zoning challenges.

"If we can get the financial backing, we can beat them. I'm convinced of it," said Slabe, who is helping the Allegheny Township group reach out to potential backers. "That's the problem today. It all hinges on money."

Challengers in some townships have attracted the support of environmental groups. The Clean Air Council and Delaware Riverkeeper Network are involved in the Middlesex Township challenge, and Environmental Integrity Project lawyers are assisting in the new Robinson Township challenge.

But industry supporters are quick to note that they have steep investments at stake, too. In Middlesex Township, for example, Rex Energy has had to halt well pad construction while township officials consider the challenge there. An Allegheny Township ordinance also requires that development stop during proceedings but makes an exception for work necessary to protect lives and property. As of last week, CNX Gas was still working.

Down the hill at the Taylor house, the neighbors are tallying the number of industry lawyers handling the case versus their one lawyer.

"They have eight lawyers; how are we going to go against eight lawyers?" Bob Taylor asked, while Hagaman and Frederick chimed in that the number had risen.

The handful of neighbors have already put up more than $7,000 to fund their challenge against the township ordinance and are unsure whether they can cover further proceedings.

"The real problem here is that some of these people who are challenging, they don't have the means to carry this to where it will eventually get to higher court," Slabe said. "They're up against the gas industry, and, holy smokes, they will bankrupt you."

Twitter: @ellengilmer | Email: egilmer@eenews.net

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