Marcellus Shale Presentation Explains Options to Municipal Leaders

(Steven McDole)

DUBOIS – An informational presentation on Marcellus Shale was held at the Penn State DuBois Wednesday night.  The presentation was aimed at informing leaders of local municipalities about the topic from a local government perspective.  Director of Agricultural Law Resource and Reference Center Ross Pifer provided the main informational section.

Municipalities have a limited pool of bargaining chips if they wish to limit Marcellus Shale drilling in their communities.  The Pennsylvania Oil and Gas Act limits most of the obvious routes a municipality or county could take to limit the ongoings of drilling.  Most of the regulatory power rests with the Commonwealth of Pennsylvania.  There are exemptions allowed under the Municipal Planning Code and Flood Plain Management Act, but the exemptions cannot be used to single out drilling.  Even through the MPC and the FPMA sub-state level governments are limited as the act bars limitations and regulations through both exemptions if the purpose behind the ordinance is aimed primarily on gas and oil operations.

Pifer briefly went over the only two court cases, and therefor the only precedent so far, to be decided by the Pennsylvania Supreme Court.  He explained the court ruled on both on the same day.  One serves as an example on what to do and another on what not to do when trying to design an ordinance with Marcellus Shale or other similar resource in mind.

Huntley & Huntley v. Borough of Oakmont found that wells and drilling operations could be limited through zoning.  The reason being that zoning takes into effect the objectives, character and nature of portions of a community.

Range Resources v. Salem Township ruled against imposing additional requirements on the operations specific to operations.

The power of localities to have a say in the growing gas industry within the state will only become more concrete as ordinances are written and challenged in court.  An unchallenged ordinance that attempts more than limiting drilling and wells to certain zones does not mean it is an ordinance that is well founded.  It just means the gas companies feel at the moment the effort to fight the ordinance is not worth the gain from going into that municipality.

The royalties from the gas will flow into the communities that allow gas operations at the same rate the gas flows from the ground.  Wells will release the majority of their life long productivity within a year.  While wells are being drilled there will be money coming into the communities through direct gas funds.  The royalties will begin to decline as drilling ends.  No mention of indirect benefits.  Such as through supplying parts for example.

Regulations are tightening on the industry.  Hydraulic fracturing is not a new technology, but its application towards Marcellus Shale did not come about till 2005.  Lawsuits and public attention did not begin to appear till 2008.

It was recommended that any new leases for gas rights be specific of what type of gas was allowed to be brought up.  In Pennsylvania there are three layers of gas.  This includes shallower deposits, Marcellus Shale and the deeper Utika Shale deposits that are now being looked at by energy companies.

Penn State has a website setup to research laws regarding Marcellus Shale.

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