Show us the revenue!

A few months ago, the Pennsylvania Department of Conservation and Natural Resources (DCNR) issued a policy statement on "Shale Gas Development Beneath Publicly-Owned Streambeds."

The policy begins by stating: "Gas development companies interested in drilling beneath publicly-owned streambeds must obtain a gas lease from [DCNR] prior to drilling[.]" The policy statement notes that DCNR, in consultation with the Pennsylvania Department of Environmental Protection (DEP), has developed a list of publicly-owned streambeds.

Also posted on DCNR's Web page are two maps showing the locations of the publicly owned streambeds on the DCNR-DEP list. The first is a single-frame map dated February 28, 2012 that includes shading that reveals the extent of the Marcellus Shale formation.

The second is an interactive map that allows the viewer to select particular streams and zoom in to see the precise location of the streambed (and underlying gas) claimed by the Commonwealth.

This is a big deal.

First, it's our property, and nobody may enter and occupy our property without our permission. In Pennsylvania, although it is lawful for a well drilled on one property to pull in natural gas from beneath a neighboring property, one may not drill a well into property owned by someone else without permission, usually in the form of a lease. So, a gas company that has drilled beneath a publicly-owned streambed without first obtaining a lease from the Commonwealth is occupying our public property without permission —which is a polite way to say "trespassing."

Second, there is a lot of money at stake. In 2010, DCNR got a $6.15 million bonus payment ($4,000 per acre), plus a 20 percent royalty for a lease with Chesapeake Energy authorizing the extraction of gas beneath 1,500 acres of a seven mile stretch of the Susquehanna River in Bradford County. At the time, DCNR estimated that the Commonwealth owns the mineral rights beneath at least 25,000 additional acres of rivers and streams.

Take a quick look at DCNR's maps. Given the extent of the streambeds claimed by the Commonwealth, the number of wells drilled in the Marcellus Shale, and the extraordinary length of most horizontal gas wells (several thousand feet), it would be a miracle if every horizontal well drilled into the Marcellus Shale managed to avoid areas beneath the streambeds DCNR identifies as publicly-owned.

With our current budgetary straits, this is no time to subsidize rich gas companies by allowing them — for free — to occupy public property, and to collect and sell the public's natural gas.

So we ask:

How many wells have been drilled beneath publicly owned streambeds in Pennsylvania without a lease? In other words, how many gas wells are occupying public property without the public's permission and without compensation?

What is the Commonwealth doing about such wells?

Show us the leases, and (cue Cuba Gooding Jr.) show us the revenue!

Won’t you be my neighbor? Court says no.

A divided federal appeals court (US Federal Court of Appeals for the DC Circuit) handed down its ruling today addressing arguments that federal regulators went too far in adopting the Cross State Air Pollution Rule, which established new regulations to control air pollution throughout portions of the eastern United States.

The regulations at issue were adopted under the federal Clean Air Act's "good neighbor" provision, which requires upwind states to prevent sources within their borders from emitting air pollutants in amounts that contribute significantly to a downwind state's nonattainment of federal air quality standards. Its purpose is to establish a workable approach to interstate air pollution issues that have huge public health implications.

By a vote of 2-1, the court found that the Environmental Protection Agency had overstepped its legal authority in developing the rule. As a result, the Court vacated the offending provisions.

This ruling raises several concerns. First, it creates uncertainty over the timing and magnitude of the emissions restrictions that ultimately will be imposed on sources in upwind states. Also, delays in establishing regulations and requirements to upgrade or build cleaner generation will result in foregone emissions reductions and will fail to send clear market signals to make investments in cleaner generation, such as natural gas, renewable energy, and efficiency.

The EPA must continue administering the provisions of its previously-adopted Clean Air Interstate Rule pending adoption of a valid replacement, or until the U.S. Supreme Court agrees to review this decision and overturns it.

EME Homer City Generation, L.P. v. EPA, No. 11-1302.

In This Case a Tie Does Not Result In a “Push”

In blackjack, typically when the dealer and a player get the same point total the result is a "push," meaning neither side wins.

In Robinson Township, et al. v. Commonwealth of Pennsylvania, 2012 Commonwealth LEXIS 222 (July 26, 2012), the Pennsylvania Commonwealth Court struck down important aspects of Pennsylvania’s new oil and gas law, known colloquially as Act 13. It held that the General Assembly: 1) improperly sought to compel local government to allow industrial gas operations in nearly all zoned -- including residential -- districts, and 2) failed to establish adequate standards for instances when the Department of Environmental Protection (DEP) may waive setback requirements designed to protect streams and other surface waters.

The Corbett administration appealed that decision to the state Supreme Court and is looking for something more than a "push." Here’s why.

The Commonwealth Court is comprised by law of nine "commissioned" judges. One of those nine, Judge Mary Hannah Leavitt, recused herself and therefore did not participate in the decision. By rule, seven judges are impaneled to hear a case en banc, meaning the entire court. Judge Renee Cohn Jubilerer, wife of former president pro tempore of the Senate (R — District 30), was not on the panel of seven. The decision to toss out parts of Act 13 was made by a vote of 4-3, with Democrats in the majority. Internal operating rules of the court provide that any "commissioned" judge not on the panel may file an "objection" to the majority opinion, and if that vote results in a tie of all "commissioned" judges, the opinion has to say so. If one looks at footnote one of the majority opinion, it explains that the opinion was being filed under a specific rule "because ... the vote of the remaining commissioned judges on those Counts resulted in a tie." So, the majority that struck down portions of Act 13 had the votes to do so because of the judges who were impaneled for this particular en banc hearing. The actual vote of "commissioned" judges was 4-4.

The Pennsylvania Supreme Court, on the other hand, is made up of seven justices. One of those seven, Justice Joan Orie Melvin, is currently suspended from participating on the court because of felony charges alleging that her judicial staff improperly worked on her 2003 and 2009 election bids. (Joan, of course, is the sister of state Sen. Jane Orie, who was convicted of ethics violations, theft of services, and forgery, and was sentenced to prison). That leaves six justices — split evenly between Democrats and Republicans — to hear the Commonwealth's Robinson appeal. Since Justice Orie Melvin’s suspension, the Supremes have split evenly on two different cases. It is not inconceivable that the same could happen in the Robinson appeal. A tie vote in the Supreme Court would mean that the majority vote of the Commonwealth Court would be affirmed.

And that is why the Corbett administration, which crafted and pushed through the overbearing zoning provisions of Act 13, is hoping for something other than a "push" before the Supreme Court. If the Supreme Court votes 3-3, the Corbett administration loses.