Pennsylvania Supreme Court rejects Application for Reconsideration of Act 13 decision

The Pennsylvania Supreme Court’s December 19, 2013 decision in Robinson Township v. Commonwealth of Pennsylvania declaring portions of Act 13 unconstitutional will remain intact.

Last month, attorneys for the Public Utility Commission (PUC) and the Department of Environmental Protection (DEP) filed an application asking the Supreme Court to reconsider its original decision. (We discussed the opposing positions of the government here and the citizens here.) On Friday, the state Supreme Court summarily denied the DEP and PUC’s application without opinion.

Justice Saylor dissented from the Court’s decision to deny the Application for Reconsideration, stating that the Commonwealth parties were entitled to “a reasonable opportunity to present evidence” on whether Act 13 satisfied the "newly minted balancing test" announced by Chief Justice Catille under Article I, Section 27 of the Pennsylvania Constitution.

The Supreme Court’s denial clears the last remaining obstacle for the case to return to the Commonwealth Court for further proceedings.

Michael Helbing is staff attorney for PennFuture, based in Philadelphia.

People First

Whether we’re talking about policy related to oil and gas drilling, management of polluted runoff, or the development of alternative forms of energy, we at PennFuture believe that the safety of our people and the protection of our environment should always come first. That’s why we’re concerned that Governor Tom Corbett has chosen to sign on to a letter supporting the “States First” initiative, which essentially asks the federal government to stay out of the business of regulating oil and gas drilling operations. Instead of arguing about which level of government should be the “primary” regulator of oil and gas drilling, we believe that regulators at all levels of government should work to create a synergistic web of regulations that complement each other for the protection of the environment and the benefit of all people.

States First is an initiative of the Interstate Oil and Gas Compact Commission and the Ground Water Protection Council. According to its website, the goal of States First is to “support and enhance the role of the states as the primary and appropriate regulators for oil and gas development.” As part of the initiative, the groups have created the State Oil and Gas Regulatory Exchange (SOGRE), which is intended to bring together regulators and experts from different states to encourage the free flow of ideas and information.

Although we commend Gov. Corbett and the leaders of States First for taking the initiative to encourage communication among state regulators, we believe that their view that states should be the “primary” regulators of oil and gas development is short-sighted. State governments do indeed have a role to play in overseeing oil and gas drilling operations, but so, too, do federal and local governments.

The history of environmental regulation shows that local, state, and federal regulation can successfully co-exist. People in all states need clean air, pure water, and a healthy environment, and what happens in one state affects all the states around it. Without federal standards and oversight, it is very difficult for a state’s government to protect its citizens from environmental harms that originate in other states. The federal Clean Water Act and Clean Air Act have shown us that federal regulatory “floors” and state regulatory “ceilings” can work very well together. There is no reason to believe that a similar model would not work in the area of oil and gas. Although it is true that certain types of regulations may be best left to the states, many aspects of oil and gas drilling operations are standard across the industry and across the country and would be appropriately regulated on a federal level. Other areas may require more tailored regulation best provided at a local level.

The federal government can play an important role in ensuring that oil and gas drilling is done safely and responsibly. By establishing national regulations for standard oil and gas drilling operations, federal regulators can set the minimum requirements necessary for safe practices across the country.  National regulations would give industry a degree of certainty by providing a single set of regulations that well operators must comply with nation-wide.  They would also protect citizens by ensuring that states won't engage in a “race to the bottom” by competing with each other for oil and gas jobs by weakening essential environmental protections in an effort to attract business.  As past experience has taught us, states can indeed be ‘incubators of regulatory innovation,’ as States First suggests. But, in the laboratory of oil and gas, this often happens only after states play a different role –  that of guinea pigs for industry practices that state regulations haven’t anticipated. Pennsylvania is a perfect example. And we’re paying a price for it with contaminated water wells, leaky impoundments, and a host of other problems. 

Although the federal government has not moved to establish broad oil and gas drilling regulations, it has taken a small step by regulating certain areas, such as its requirement that well operators install “green completions” that help to capture methane emissions from wells by 2015. This is a good example of an aspect of oil and gas operations that is standard across the country and is appropriate for federal regulation. The federal government should extend this example to regulate other areas of oil and gas operations that are standard throughout the country.

In addition to the federal government, local governments, too, have a role to play in protecting their communities. As the Pennsylvania Supreme Court recognized in Robinson Township v. Commonwealth of Pennsylvania, certain elements of drilling oversight, especially land-use regulations, require specialized local knowledge best achieved by local governments. 

Good governance results from people at all levels of government coming together to share knowledge and develop appropriate regulatory policies. We applaud the States First Initiative’s efforts at the former; we only hope that its members will overcome their instincts to ‘protect their turf’ to revise the initiative’s goals to focus on the latter as well. When it comes to designing an effective regulatory system, states should not compete amongst themselves or with other levels of government; they should work together to put their people first.

Mike Helbing is a staff attorney for PennFuture and is based in Philadelphia.

It ain't over till it's over: Recent development in the Act 13 Case.

A few weeks ago, we discussed a filing by the Department of Environmental Protection (DEP) and Public Utility Commission (PUC) in the Act 13 case, Robinson Township v. Commonwealth of Pennsylvania. Attorneys for the DEP and the PUC asked the Pennsylvania Supreme Court to reconsider its December 19, 2013 decision striking down portions of Act 13, because they claimed that the Court made improper findings of fact and erroneously determined certain provisions were not severable from the remainder of the statute.

The individuals and municipalities who challenged Act 13 (referred to in the case as "Citizens") filed a response to the state agencies' application, asserting that the agencies failed to present the required compelling reasons in support of their request for the extraordinary remedy of reconsideration. In their brief, the Citizens make several arguments. First, disputing the agencies' claim that the Supreme Court improperly made factual findings, the Citizens argue that the Court properly held various provisions of Act 13 unconstitutional as a matter of law without making any determinations of fact. On this score, the Citizens highlight the agencies’ own prior contentions that this case could be decided as a matter of law, and argue that the Court should not allow the agencies to change their position at this late stage. The Citizens further argue that even if factual findings were necessary to support the Court’s decision, the record was well developed and fully supported any such findings.

On the issue of severability, the Citizens argue that the Court was right to enjoin the implementation of subsections (c) and (e) of Act 13's Section 3215, because they are too closely related to the subsection the Court declared unconstitutional – subsection (b) – to operate on their own. The Citizens point out that halting the implementation of those provisions does not remove DEP’s authority to ensure that the environment is adequately protected.

Finally, the Plaintiffs suggest that by creating uncertainty about the outcome of the case while requiring additional court proceedings, granting reconsideration would conflict with the Court’s interests in the finality of its decisions and the conservation of judicial resources.

No further submissions are allowed, so the ruling on the agencies' application for reconsideration could come at any time. There is no firm deadline for the Court’s decision.

Mike Helbing is a staff attorney for PennFuture, based in Philadelphia.

Passionate supporters come out in the name of stronger oil and gas regulations

It was encouraging to see so many people come out to participate in the Department of Environmental Protection’s (DEP) public hearing about its proposed Chapter 78 regulations regarding oil and gas wells this past Thursday at West Chester University.

Public participation in government decisions is one of the purest and most important features of democracy, and environmental advocates made it clear that they understand the importance of fulfilling their role as educated and informed citizens.

The public hearing at West Chester University was well attended, and the vast majority of speakers spoke in favor of stronger environmental protection. In addition to members of the public and environmental advocacy groups such as PennFuture, Delaware Riverkeeper Network, and the Clean Air Council, a number of elected officials took the microphone to support stronger regulations. Among them was West Chester’s mayor, Carolyn Comitta, who testified that it was important for all citizens, even those who do not live in towns where oil and gas drilling is likely to take place, to concern themselves with drilling regulations because, “we all live downstream.”

During my opportunity to speak on behalf of PennFuture, I spoke about the importance of considering the long-term impacts that drilling would have on Pennsylvania’s environment, and thanked DEP and the members of the Environmental Quality Board who were present for the portions of their proposal that adequately protect the Commonwealth‘s long-term interests. I went on to ask DEP to consider making changes to other proposed regulations that aren’t strong enough to get the job done.

A copy of the testimony I gave is available on PennFuture’s website. Other hearings are scheduled between now and January 27, and information about those hearings is available on DEP’s website.

I encourage everyone to attend one or more of these hearings and make their voices heard. Suggested talking points are available on PennFuture’s website.

Mike Helbing is a staff attorney for PennFuture, based in Philadelphia.

Corbett administration asks Pennsylvania Supreme Court to reconsider Act 13 decision

On January 2, attorneys representing the Department of Environmental Protection (DEP) and the Public Utility Commission (PUC) asked the Pennsylvania Supreme Court to revisit its December 19, 2013 decision that declared portions of Act 13 unconstitutional. A plurality of three justices based their decision on the "Environmental Rights Amendment" to the Pennsylvania Constitution, finding that several provisions of Pennsylvania’s natural gas drilling law known as Act 13 violated both the environmental rights of citizens and the Commonwealth's obligations as a trustee of public natural resources under the Amendment. A fourth justice voted to invalidate the same provisions of Act 13 as a violation of the constitutional right to due process.

DEP and the PUC claim that the Court made two fundamental errors. First, they argue that the plurality opinion improperly made factual determinations on appeal that are essential to the Court's ruling. Asserting that such factual determinations properly may be made only after the presentation of evidence at trial, they ask the Supreme Court to remand those portions of the case to allow the Commonwealth Court to receive evidence, make factual determinations, and apply the legal principles articulated in the Supreme Court’s decision.

DEP and the PUC also argue that the Supreme Court erred when it ruled that certain provisions of Act 13 concerning protection of public resources, while not invalid in themselves, cannot be applied by DEP because they are inextricable from one of the provisions found unconstitutional, which establishes setbacks from streams and wetlands, and the (unconstitutional) process for obtaining waivers of the setback requirements. The agencies claim that the Court should allow implementation of the public resource provisions to go forward because they are separable from the invalidated setback/waiver provisions.

Under the Rules of Appellate Procedure, answers to the application for reconsideration must be filed within 14 days. Although there is no requirement to file an answer, the municipalities, environmental group, and individuals who brought the case are likely to do so.

Mike Helbing is a staff attorney for PennFuture and is based in Philadelphia.

The Act 13 decision: A setback for setbacks?

In writing that Act 13 violated the Environmental Rights Amendment to the Pennsylvania Constitution, did the Supreme Court actually harm the government’s ability to protect the environment? That is the contradictory narrative being spun by some who apparently disagree with the Court’s ruling in Robinson Township.

When the Pennsylvania Supreme Court struck down subsection 3215(b)(4) of Act 13 – the part of the law that allowed the Department of Environmental Protection (DEP) to waive setback protections for streams and wetlands based on a plan submitted by the operator -- it also enjoined the DEP from enforcing the setback requirements that are found in another subsection of 3215(b). The Court reasoned that the waiver and setback requirements were intended to be a “package deal.” “It would appear that the General Assembly did not intend for the setback provision to operate without allowing industry operators to secure waivers from the setbacks.” Because the setback protections were not legally “severable” from the invalid waiver provision, the Supreme Court enjoined DEP from applying any portion of section 3215(b).

It would be inappropriate, and violate the fundamental basis of Justice Castille’s “pioneering” opinion, for the government to conclude that it lacked authority to protect waters of the Commonwealth because of the Robinson Township decision.

It is important to emphasize that the Court found nothing repugnant about the setback protections in the law. The Court held that the law gave DEP too much discretion to waive the requirements without adequate guidance on doing away with the protections. Any suggestion that wells should now be permitted without adequate buffers to protect streams would directly contradict the rationale behind the Court’s opinion.

DEP retains authority under the Oil and Gas law to enact regulations addressing appropriate setback protections for streams and wetlands. Section 3274 expressly provides the Environmental Quality Board with express authority to promulgate regulations under the law. This provisions was not affected by the Court's decision. With the legislature already indicating its intent to establish minimum setback protections, the DEP could use this authority to propose regulations for EQB adoption that would establish setback protections consistent with the General Assembly’s intent.

In addition, DEP has both the authority and obligation under the Clean Streams Law to take a variety of actions, including putting conditions in permits, which would protect Pennsylvania’s streams and wetlands. Indeed, under certain circumstances such as in special protection watersheds, it would violate the federal Clean Water Act for DEP to issue permits that would not protect the existing water quality of streams and wetlands.

As Justice Castille wrote, Article I, Section 27 “requires each branch of government to consider in advance of proceeding the environmental effect of any proposed action,” and it imposes on the Commonwealth “a duty to refrain from permitting or encouraging the degradation, diminution, or depletion of public natural resources.” If anything would be an affront to the Court's ruling, it would be for DEP to use the ruling as a basis for issuing permits that fail to ensure protection of the resources that it holds in trust for this and future generations.

DEP has not announced how it intends to evaluate permit applications in light of the Supreme Court's Robinson Township decision. What should be clear, however, is that even without section 3215(b) of Act 13, DEP has ample authority to require that oil and gas development activities be planned and conducted in a manner that fully protects the waters of the Commonwealth.

Mark Szybist is a staff attorney in PennFuture's Wilkes-Barre office. He specializes in oil and gas issues.

Standing tall: Act 13 decision affirms ability of environmental groups to challenge regulations.

It isn’t the sexiest holding to come from the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth of Pennsylvania, but environmental advocates should nonetheless take note of the Supreme Court’s analysis of the Delaware Riverkeeper Network’s standing in the case.

An important aspect of affirmative environmental litigation is establishing standing necessary to participate in the case. To establish standing, a plaintiff must be able to demonstrate, among other things, that it has “a substantial, direct and immediate interest in the outcome of the litigation.”Fumo v. City of Philadelphia, 972 A.2d 487, 496 (Pa. 2009).

The Commonwealth Court held in Robinson Township that the injuries alleged by Delaware Riverkeeper and its Executive Director, Maya van Rossum, were not sufficiently direct or immediate to confer standing.

On appeal, however, the Pennsylvania Supreme Court reversed the Commonwealth Court’s standing analysis and delivered a victory to environmental advocates. With respect to the Delaware Riverkeeper Network, the Court held that the group had established associational standing, because its members are “likely to suffer considerable harm” to home values and property enjoyment as a result of the oil and gas operations that either have been established or are likely to be established as a result of zoning changes mandated by Act 13. Robinson Township v. Commonwealth of Pennsylvania, J-127A-D-2012, Opinion at 21-22 (Pa. 2013). The Court cited the “serious risk of alteration in the physical nature of their respective political subdivisions and the components of their surrounding environment” as the basis for the environmental group’s standing. Id. The Court further held that Ms. Van Rossum had standing in her capacity as Executive Director of the Delaware Riverkeeper Network.

By affirming that the "likely" harm from "likely" natural gas operations is not too remote a harm to confer standing, the Supreme Court has confirmed the importance of allowing groups to prevent harms to the environment before they happen, rather than reacting to damage after the fact.

Michael Helbing is a staff attorney in PennFuture's Philadelphia office.

Act 13 case: More to come.

In its recent decision in Robinson Township v. Pennsylvania, a plurality of the Pennsylvania Supreme Court made some decisive proclamations in declaring certain portions of Act 13 unconstitutional. But the Court’s decision also left a number of significant issues undecided by “remanding” several issues to the Commonwealth Court – i.e., finding that the Commonwealth Court had decided those issues incorrectly and sending them back (with instructions) – for the Commonwealth Court to re-decide.

• One of the most significant issues remanded to the Commonwealth Court involves “severability.” When parts of a statute have been struck down, severability enables the remaining portions of the statute to remain and continue as law. In this case, the question is whether the portions of Act 13 not declared unconstitutional remain valid law in the absence of the unconstitutional sections. Pennsylvania law creates a presumption in favor of severability, but it allows judges to declare an entire statute unconstitutional if the remaining portions of the law “are so essentially and inseparably connected with, and so depend upon, the void provision or application, that it cannot be presumed the General Assembly would have enacted the remaining valid provisions without the void one” or “are incomplete and are incapable of being executed in accordance with the legislative intent.” 1 Pa.C.S. § 1925. The Supreme Court’s decision in Robinson Township determined that certain otherwise valid provisions of Act 13 – e.g., section 3215(b), which establishes gas well setbacks from streams and wetlands – were not severable from the unconstitutional provisions, and therefore had to be struck down with them. But, it directed the Commonwealth Court to consider more carefully the broader issue of the severability of the rest of Act 13. This could be a difficult issue for the Commonwealth Court, and it is worth following closely. If the Commonwealth Court ultimately decides that the remaining portions of Act 13 are not severable, the entire act would be struck down – even if no further provisions are deemed unconstitutional.

• The Pennsylvania Supreme Court also remanded the claims of Dr. Mehernosh Khan, who challenged the portion of Act 13 that requires physicians treating patients sickened by fracking fluids to sign a confidentiality agreement in order to obtain the chemical composition of those fluids. Contrary to the Commonwealth Court’s initial holding, the state Supreme Court determined that Dr. Khan was an appropriate person to raise the claim (i.e., had “standing”), and instructed the Commonwealth Court to evaluate Dr. Khan’s claim on the merits.

• Finally, the Supreme Court directed the Commonwealth Court to reconsider the plaintiffs’ claims – initially rejected by the Commonwealth Court – that Act 13 is unconstitutional as a “special law” and an unlawful “taking” of private property. Article III, Section 32 of the Pennsylvania Constitution prohibits “special laws” that apply too narrowly to a particular person or group of people and are not generally applicable, and both the Pennsylvania and United States Constitutions prohibit the government from unlawfully taking private property for private uses.

Considering the stakes of this litigation, it is possible (even likely) that the Commonwealth Court’s resolution of some of these issues will be appealed by one or both parties back to the Pennsylvania Supreme Court. Bottom line: this decision is already a landmark case, but stay tuned. There could be even more excitement to follow.

Michael Helbing is a staff attorney in PennFuture's Philadelphia office.

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.

The devil in chapter 78

Last year, Governor Corbett signed into law Act 13 of 2012, the first comprehensive revision of Pennsylvania’s oil and gas law since 1984.

Soon – perhaps as early as Friday – the Pennsylvania Environmental Quality Board (EQB) will seek public comment on the first major revisions of Pennsylvania’s oil and gas well regulations (which are set forth at 25 Pa. Code Chapter 78) since 1989. The revisions run to some 74 pages.

Generally speaking, Pennsylvania environmental law takes two forms: (1) statutes like Act 13, which are passed by the General Assembly and signed into law by the governor; and (2) regulations, which are promulgated by the EQB, a special governmental body whose sole function is to establish regulations for the Department of Environmental Protection (DEP). Though not technically considered laws, terms and conditions set forth in permits issued by DEP constitute a third variety of enforceable standards and restrictions.

Statutes are the broad strokes of the law – detailed in places, but typically rich in ambiguities and gaps, often due to legislative compromise. Regulations “implement” statutes by clarifying ambiguities and filling gaps; they are the tools that state agencies use to give effect to the statutes they administer. Permit terms apply statutes and regulations to particular activities.

The purpose of the upcoming Chapter 78 revisions is twofold: First, to implement Act 13, and second, to codify a number of regulatory approaches that the DEP has so far implemented only through permit terms, such as design and construction standards for centralized wastewater impoundments.

In the coming weeks, this blog will return to parts of the Chapter 78 revisions that merit particular public attention and comment. We all know who skulks in the details.