PA Court Strikes Down Limits on Municipal Zoning for Hydraulic Fracturing

A panel of judges on Pennsylvania's Commonwealth Court overturned two key and controversial provisions in Act 13, the state's major re-write of regulations pertaining to hydraulic fracturing that also authorized "shale impact fees" to municipalities in the Marcellus Shale region. The law, which was passed in February 2012, prohibited communities from passing zoning ordnances to limit or restrict oil or natural gas drilling that were more strict than state standards. The judges also struck down a section that allows the state to waive set-back requirements that limit where wells can be located if it approves a driller's resource protection plan.

The lawsuit against the state began in March 2012, when seven municipalities and community activist groups objected to provisions in Act 13 that limit municipal land-use control and over requirements in the bill forcing them to change local zoning laws to conform to state statute or risk losing funding from shale impact fees. Inclusion of shale impact fees were driving components that helped secure passage of the new law, by providing more than $200 million per year to communities, counties and local governments from new fees assessed on natural gas production to address and mitigate the impacts on roads and services from the rapid expansion of fracking in the Marcellus Shale. Since the original suit was filed, 67 counties and localities have issued their support for the plaintiffs or have passed resolutions proclaiming the ban on using more restrictive local zoning powers to prohibit fracking as unconstitutional. Officials from Governor Tom Corbett’s office counter that Act 13 passed with support from local communities, including the County Commissioners of Pennsylvania and the Pennsylvania State Association of Township Supervisors, and that the legislation is the first major reform of the state’s oil and gas laws since 1984.

Yesterday's ruling, agreed with the major premise of the municipalities' suit that the required changes mandated by Act 13 would alter the character of neighborhoods and would make existing local zoning plans "irrational." The majority opinion written by Judge Dan Pellegrini stated, “the Legislature could make similar findings requiring coal portals, tipples, washing plants, limestone and coal strip mines, steel mills, industrial chicken farms, rendering plants and fireworks plants in residential zones advancing those interests in their development. It would allow the proverbial pig in the parlor instead of the backyard." The court's ruling also threw out a provision that allowed the Department of Environmental Protection to issue waivers on set-back requirements, which set minimum distances a gas or oil well could be located from residences, schools, streams, and wetlands, because it gave the state agency too much discretion over policy directives reserved for the legislature. Many environmental and community advocacy groups opposed the original provision in Act 13 because they believed it provided a loophole for companies to drill next to environmentally sensitive areas.

Reaction to the decision was met by disappointment from industry groups. The President of the Marcellus Shale Coalition, Kathryn Klaber, issued the following statement: "The premise for the General Assembly’s action earlier this year was to provide certainty and predictability that encourages investment and job creation across the Commonwealth. Lack of uniformity has long been an Achilles’ heel for Pennsylvania and must be resolved if the Commonwealth is to remain a leader in responsible American natural gas development and reap the associated economic, environmental and national security benefits.” A spokesman for Governor Corbett also expressed his concern with the ruling in a statement and shared the intention of the administration to challenge the decision, "We will vigorously defend this law, which better protects the environment, provides revenue to local communities and regulatory certainty to both landowners and job creators."