Playing ping pong with important issues: Where is Governor Corbett on forced pooling?

The Pennsylvania Environmental Hearing Board issued a decision yesterday rejecting the Corbett administration's attempt to have the EHB decide whether a gas company could use forced pooling in the Utica Shale formation.

Forced Pooling
"Pooling" enables companies to combine adjacent tracts of leased land into one unit from which they can develop the gas. "Forced pooling" generally allows a company to access minerals beneath private property even if the landowner opposes drilling, and without having to independently reach a financial agreement with a willing landowner. Many, including Governor Corbett, have described "forced pooling" as "private eminent domain" because it allows the company to forcibly take away one of the bundle of rights commonly associated with private property ownership.

The Pennsylvania Oil and Gas Conservation Law is a 50-year-old statute that was enacted before horizontal drilling made development of the Marcellus and Utica Shale economically feasible. The Conservation Law only applies to wells that penetrate the Onondoga formation - which lies beneath the Marcellus and above the Utica Shale. Before drilling a well that penetrates the Onondoga, gas drillers must obtain a permit from the Department of Environmental Protection (DEP). Once a well has been drilled into the Onondoga, the operator can apply for a well spacing order from the DEP, which has the ability to limit wells that will be located in the spacing unit within a ten-square-mile area.

The Conservation Law further allows that when a spacing unit includes multiple real estate parcels that are owned separately, the owners may voluntarily integrate their parcels for the purpose of developing the resources within the unit. But if the landowners do not reach a voluntary agreement, "an operator having an interest in the spacing unit" can apply for an integration order with "terms and conditions that are just and reasonable." In other words, for wells that penetrate the Onondoga such as Utica Shale wells, the Conservation Law seemingly allows companies to obtain government orders that require "forced pooling" of parcels within the unit.

DEP Sends Hilcorp To The EHB
In July 2013, Hilcorp Energy Company submitted an application to DEP asking it for a well spacing order regarding the Utica Shale formation for 3,267 acres in Lawrence and Mercer counties – all but 35 acres of which the company has under lease. Hilcorp's request included a forced pooling order regarding the 35 acres of private property that the company does not have under lease. But the Corbett administration apparently wanted nothing to do with it, as its DEP directed the company to apply to the Environmental Hearing Board for relief instead.


The EHB Punts It Back To DEP
At DEP's direction, Hilcorp filed an application to the EHB either for a well spacing order under the Conservation Law, or an order requiring DEP to act on its application. On Wednesday, the EHB rejected DEP's arguments that it, and not the agency, had the responsibility for making forced pooling decisions. Judge Mather's stinging concurrence described the DEP's position as "Orwellian" and counter to the agency's forty-two year history of implementing the Conservation Law. Though the EHB directed Hilcorp to file its application with the DEP, it stopped short of an order directing DEP to act on the application.

Corbett's Next Move
It is understandable why the administration sought to avoid its responsibilities under the Conservation Law. Gov. Corbett has been, at best, inconsistent on forced pooling.  On the one hand, he made public statements opposing the very concept, calling it "private eminent domain." And yet, in July he signed a bill that allowed companies to force pooling on property owners where the companies hold leases that did not otherwise give them that right. In that instance, the administration seemed completely ignorant that the law takes away the right of property owners to negotiate a fair price for the company to pool the mineral rights - the very definition of "forced pooling."

So the question is, what is the administration's next move? Does it direct the DEP to do its job under the Conservation Law? Does it appeal the EHB's decision? Does it enlist the legislature to amend the Conservation Law? Or does it try to find another governmental agency other than the EHB that will make the decision?

Stay tuned. Forced pooling is back in the news and its not likely to go away anytime soon.

Local Right to Zone Gas Development Hangs in the Balance

In March 2012, seven municipalities, the Delaware Riverkeeper and a local health professional filed suit to declare portions of Act 13, Pennsylvania's oil and gas law, unconstitutional. The Commonwealth Court struck down the portion of the law that sought to preclude local municipalities from adopting zoning ordinances that applied to oil and gas operations. An appeal of that decision is before the Pennsylvania Supreme Court.

The Supremes have been operating since last May with six justices - three Dems and three Repubs. On May 1, the seat of convicted Justice Joan Orie Melvin will become open and Governor Corbett will be able to appoint a successor to fulfill her term with the concurrence of 2/3 of the Senate.  Since the Senate is split 27 (R) - 23 (D), Corbett will need 7 Dems to vote for confirmation of his nominee. Whoever is confirmed could be the deciding vote in the Act 13 litigation.

Senator Daylin Leach, Dem Chair of the Senate Judiciary Committee, sent a letter to Corbett appealing for a bi-partisan approach to the opening.  He offered five names of sitting Republican judges that would be acceptable. Here they are:

Judge Cheryl Allen, the only African American in the group, currently serves on Pennsylvania's Superior Court (an appellate court that largely handles criminal matters). She has a BS from Penn State and law degree from Pitt (presumably she would recuse herself from any case arising out of revival of the Pitt/Penn State football rivalry). She was a public school teacher right out of college and eventually got appointed to the Allegheny County Common Pleas Court, where she spent 12 years in the Juvenile Division working with children and families before election to the Superior Court. Judge Allen ran for the Republican nomination to the Supreme Court in 2009 but, coincidentally, she lost that race to none other than Joan Orie Melvin. 

Judge Correale Stevens, is the President Judge of Superior Court - where Judge Allen sits. He received a BA from Penn State (go Lions - that's two in a row), and JD from Dickinson. He hails from Hazelton in Luzerne County, where he was a city solicitor, state representative, district attorney and, eventually, a Common Pleas Court judge. Judge Stevens apparently enjoys outdoor challenges, as he lists graduation from the Outward Bound Adventure program on his official biography. He also has a bit of a sense of humor - when someone tried to break into his Hazleton Office, he quipped “Why would someone want to break into a court office? I don’t know unless he wants to read how long he’s going to be in jail." Not only that, he actually has his own television show where he is interviewed by a guy named Sam Lesante - apparently a Northeast Pennsylvania fixture reminiscent of the great Joe Franklin. 

Judge Kathrynann Durham is from Delaware County and another nominee with experience on Common Pleas Court. Durham got her BA at Widener and JD from Delaware Law. She spent seventeen years in the State House representing the 160th District before being nominated to the Court by Gov. Tom Ridge. Like Allen, Durham spent time teaching in public school after college. She does not appear to have practiced law outside of her court experience. When nominated in 2001, Durham credited her mother, Catherine T. Walrath, a widow who raised five children while operating a flower shop in Parkside. "She had a reputation for being able to get things done. . . . She never turned anyone away," 

Judge Thomas Branca is another Common Pleas Court Judge - this time from Montgomery County. He got his BA from Ursinus College, and JD from Pitt. Before being elevated to the bench and unlike any of the other four, Branca worked on the public defender side of the aisle from '73-'76, and served as chief public defender for Montgomery County from 2000-02. Between stints as a PD, Judge Branca worked in private practice doing civil and criminal trials. It's not believed that the Judge is related to Ralph Branca, the former Dodger's pitcher who gave up the "shot heard round the world" to Bobby Thompson in the bottom of the ninth to hand the New York Giants the 1951 National League Pennant. 

Judge Carmen Minora rounds out Sen. Leach's list, the third Common Pleas Court Judge who hails from Lackawanna County.  Judge Minora got his BS from the University of Scranton, and is the only Duquesne University Law School grad amongst the five. In 2010, US Senators Casey and Specter submitted Minora and two others to the White House to fill vacancies on US District Court for the Middle District of Pennsylvania, but he was not eventually nominated for that position. Several years earlier, Sen. Specter asked George W. Bush to consider Minora for a position on the D.C. Circuit Court, but there was no opening at the time and he was not eventually nominated for that position either. Judge Minora was reportedly a lifelong friend of Senator Specter.