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Marcellus Shale & Local Zoning

By: Andrew D.H. Rau

The oil and gas industry’s race to develop the Marcellus Shale across Pennsylvania has brought to the forefront the tension between large-scale development interests and local government.  Pennsylvania boroughs, townships and cities are grappling with the limits of local zoning power as they consider the means of regulating and controlling drilling locations and the related traffic, noise, and other uniquely local impacts.

The appellate courts are helping define this legal landscape, and in a series of recent decisions the dividing line between the state’s oil and gas laws, and local ordinances, is being established.

The Pennsylvania Supreme Court case of Huntley & Huntley v. Oakmont Borough Council, 964 A.2d 855 (Pa. 2009) leaves the door open for local zoning regulation pursuant to the powers granted by the state’s Municipalities Planning Code (MPC).  The Huntley decision expressly recognized the power of the MPC when it comes to zoning prerogatives of the local government.  The court wrote that “the MPC’s authorization of local zoning laws is provided in recognition of the unique expertise of municipal governing bodies to designate where different uses should be permitted in a manner that accounts for the community’s development objectives, its character,” and what was described as the “suitabilities and special nature of particular parts of the community.”  The conclusion—local zoning power lives on in the Marcellus Shale era.

But how far does the municipal power extend?  In Range Resources Appalachia, LLC v. Salem Township, 964 A.2d 869 (Pa. 2009) a case decided at the same time as Huntley, the Supreme Court said that local governments go too far if they try to regulate things already controlled by the state’s Oil and Gas Act, such as detailed technical standards for drilling, oversight of well heads, well casings and capping requirements.

There is more to come.  The case of Penneco Oil Company, Inc. v. County of Fayette, 4 A.3d 722 (Pa. Cmwlth. 2010), was recently issued by the Commonwealth Court, and attempted to further define the limits of local control.  The Commonwealth Court found that appropriate local zoning controls included “preserving the character of residential neighborhoods, and encouraging beneficial and compatible land uses.”  The case also upheld the local government’s right to adopt ordinances requiring special exception applications before a zoning hearing board in some cases.  The gas industry players have asked the Supreme Court to consider an appeal.

Meanwhile, local governments, and oil and gas interests across Pennsylvania, hope for more clarity from the courts.  Contact Andrew D.H. Rau in our West Chester office for more information.

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