Wall Street Journal
September 12, 2011
According to the Wall Street Journal, more than 100 Pennsylvania municipalities have enacted ordinances to limit or regulate fracking in the past 18 months. Local officials say such restrictions fall within a town’s right to enforce zoning, much in the same way municipalities can prevent a chemical plant or prison from being built in the middle of a residential neighborhood. Now challengers to fracking are putting the issue to the voters, by pursuing ballot initiatives to ban fracking. Gas industry officials, however, argue that bans, if enacted, would be unlawful, under at least two legal theories. First, in Pennsylvania, the argument is that a ban would violate the Pennsylvania Oil and Gas Act’s requirement that municipalities must allow for reasonable development of minerals. As noted in a previous Energy Forward post , Range Resources is challenging a South Fayette, PA local zoning ordinance that limits development to “zoning districts” rather than throughout the township, claiming that the restriction, albeit not an outright ban represents regulatory “double dipping” inasmuch as the issue is already regulated under the Pennsylvania Oil and Gas Act. Second, there is a constitutional taking argument if an outright ban is enacted subsequent to a company’s investment in a drilling installation, since the ban would arguably render worthless the company’s investment, requiring compensation to the driller. Northeast Natural Energy of Charleston successfully sued Morgantown, WV, over its drilling ban. In the case of Peters, Township, PA, officials passed an ordinance in August limiting drilling to parcels 40 acres or more, and requiring water testing. But residents want a complete ban and gathered enough signatures to put the issue on the ballot. Given the nature of the law in Pennsylvania, where § 602 of the Oil and Gas Act prohibits municipalities from imposing conditions, requirement or limitations on oil and gas well operations, such bans are unlikely to be successful. In striking down Morgantown’s ordinance to ban fracking, Monongalia County Judge Susan Tucker ruled that the State’s interest in oil and gas development provides for the exclusive control of drilling to be under the West Virginia Department of Environmental Protection. Peters Township is hoping that Pennsylvania law, coupled with its status as one of about 70 municipalities in the state with a home rule charter and its own governing laws, may confer its proposed ban with more authority than a typical ordinance, thereby giving it a better chance of prevailing in the likely legal challenge. This issue will no doubt be litigated in the Pennsylvania courts in the months to come, so the answer will be apparent soon.