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Bear in the Woods: Environmental Law Blog

Thursday, April 03, 2014

The Curious Case of DCNR's Streambed Leases

In 2012, we noted a new Department of Conservation and Natural Resources (DCNR) policy statement titled “Shale Gas Development Beneath Publicly Owned Streambeds” and posed this question: How many wells have been drilled beneath publicly-owned streambeds in Pennsylvania without a lease i.e., without permission from the DCNR or compensation for the public?

Yesterday, StateImpact Pennsylvania revealed that since 2012, the DCNR has entered into a total of nine streambed leases for gas well drilling beneath publicly owned streams. The article highlighted four leases executed in 2014 covering more than 1,400 acres of land under four prominent publicly-owned streams – the Susquehanna River, Black Lick Creek, Ten Mile Creek, and Dunkard Creek.

The StateImpact article also revealed that, after discovering around 2009 that some gas companies had illegally drilled under public streambeds without leases, DCNR entered into after-the-fact leases as a form of “enforcement action to collect money owed to the Commonwealth.” The article noted, however, that according to Governor Corbett's press secretary, “the state has not sought to get retroactive payments from the drillers,” apparently meaning that the Commonwealth has not sought to collect royalties for gas extracted before the after-the-fact leases were signed. The amount of foregone royalties is unclear.

Our research indicates that four of the other (reportedly five) streambed leases executed by DCNR since 2012 are as follows:

  • A February 15, 2013 lease to Anadarko E&P Company, LP for 9.197 acres under the East Branch of Wallis Run in Lycoming County, just south of the Loyalsock State Forest; 
  • A February 19, 2013 lease to Anadarko E&P Company, LP for 59.62 acres under Beech Creek in Clinton County;
  • An April 13, 2013 lease to R.E. Development, LLC for 138 acres under Connoquenessing Creek in Butler County;
  • A December 2, 2013 lease to EQT Production Company for 2.55 acres under Ten Mile Creek; 

We could not locate a fifth lease.

The news of these leases raises several questions.

First, is the $5.9 million in bonus money from the four new leases a part of the $75 million to be raised this year from non-surface DCNR leases under Governor Corbett’s proposed budget? Or is the $5.9 million in addition to that $75 million?  

Second, as far as we can tell, the DCNR has issued public notice in the Pennsylvania Bulletin for only one of the nine streambed leases executed since 2012 – the R.E. Development lease.  Why were the others not noticed?

Third, to repeat our question from 2012, how many wells have been drilled beneath the Commonwealth’s publicly owned streambeds without a lease – and how much revenue has the Commonwealth left on the table by not taking legal action against operators who have drilled such wells?

Questions aside, yesterday’s news highlights the continuing lack of transparency in the DCNR’s oil and gas leasing program and the fact that the DCNR’s regulations, which contain thirteen separate provisions regulating State Forest picnic areas, are completely silent on the question of oil and gas drilling on and under State Forests, State Parks, and publicly-owned streambeds.

Mark Szybist is a staff attorney for PennFuture and is based in Wilkes-Barre. He specializes in oil and gas law.

Wednesday, March 19, 2014

DEP's Alphonse and Gaston routine

Alphonse and Gaston were characters in an eponymous early 20th century cartoon strip whose excessive politeness and repeated deference prevented them from so much as getting though a doorway. Inspired by their routine – “After you, Alphonse.” “No, you first, my dear Gaston.” – baseball broadcasters still describe two fielders who both shy away from a catchable fly ball as “pulling an Alphonse and Gaston.”

As baseball season approaches, two units of Pennsylvania’s Department of Environmental Protection (DEP) are pulling their own, bureaucratic version of the Alphonse and Gaston routine. DEP’s version, however, is not funny.

Citizens and regulators from several government agencies have repeatedly observed excessive amounts of sediment being carried into a High Quality segment of the Youghiogheny River adjacent to the Great Allegheny Passage in Fayette County. The sediment is generated by erosion occurring on a parcel of land known as the Curry site, where timbering activities have exposed and disturbed the soil.

Enter Alphonse.

Most erosion and sedimentation problems in Pennsylvania are handled by DEP’s Waterways and Wetlands (W&W) Program, which delegates some regulatory responsibilities to county conservation districts. If you call W&W or the Fayette County Conservation District, however, you are told that they lack jurisdiction (authority) over the Curry site because it is a permitted surface coal mine. W&W suggests that you call DEP’s Greensburg District Mining Office.

Enter Gaston.

DEP’s Mining Program takes exactly the opposite view on the jurisdiction issue: The mining company has not yet activated its mining permit and is not performing the timbering, so the Mining Program has no regulatory authority over the erosion and sedimentation problems. They suggest – as you might have guessed – that you call W&W or the Conservation District.

While DEP performs this regulatory Alphonse and Gaston routine and watches the ball drop, the sediment continues to flow into the High Quality waters of the Youghiogheny.

As in baseball, giving up a “hit” this way is both embarrassing and avoidable. Ultimately, DEP’s W&W and Mining Programs answer to the same Secretary. Like a pitcher who takes charge by calling out which of two infielders should handle a pop-up, DEP Secretary Abruzzo should direct W&W or Mining to step up and make the play. If each unit of DEP has jurisdiction over different responsible parties, the Secretary should direct both units to take action to protect the Yough.

One way or another, somebody should catch the ball.

Kurt Weist is senior attorney for PennFuture and is based in Harrisburg.

Act 13 case: Court sets aggressive schedule, impact fee likely to remain intact

The Pennsylvania Commonwealth Court issued an order last week in Robinson Township v. Commonwealth of Pennsylvania, No. 284 M.D. 2012 (Pa. Commw.), setting briefing and hearing schedules. As we’ve discussed previously on this blog, Robinson Township has been remanded by the Pennsylvania Supreme Court to the Commonwealth Court for further proceedings after the Supreme Court overturned parts of the Commonwealth Court’s original ruling and upheld other portions that invalidated certain provisions of Act 13.

The Commonwealth Court’s order imposes a fairly aggressive schedule on the parties. The Court directs parties to file affirmative briefs supporting their various requests for pre-trial relief by April 1, 2014. Each side will then have the opportunity to respond in writing to the other side’s submission by April 21, 2014. The parties will then appear in court to present their arguments before an “en banc” panel of seven Commonwealth Court judges on May 14, 2014. 210 Pa. Code 3103(a)(2).

During this round of briefing, the parties will address: • Whether the portion of Act 13 regarding which parties are entitled to receive notice of a spill constitutes a “special law” or a violation of equal protection. • Whether portions of Act 13 related to the jurisdiction of the Public Utility Commission must be struck down because they are incapable of standing on their own in the absence of other provisions that have been deemed unconstitutional by the Supreme Court. The parties will also resubmit briefing that they previously submitted to the Court about: • Whether Act 13 effects a ‘taking’ by allowing well operators to take private property for use in its operations. • Whether the ‘gag rule’ covering the ability of health care practitioners to communicate about the chemical composition of fluids used in fracking is constitutional.

The media has reported that the parties and Court have agreed to limit their consideration of severability to several discrete provisions of the law. That suggests that other sections of Act 13 (including the impact fee) not directly implicated in the Robinson Twp. case are likely to remain intact.

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

Wednesday, February 26, 2014

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.

Wednesday, February 05, 2014

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.

Wednesday, January 22, 2014

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.

Wednesday, January 15, 2014

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.

Wednesday, January 08, 2014

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.

Thursday, January 02, 2014

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.