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Pa. Supreme Court again considers Marcellus zoning

PHILADELPHIA — The state Supreme Court heard arguments March 8 in a Marcellus Shale zoning case that could have broad implications for how municipal governments decide which of their land use districts are appropriate for oil and gas drilling.

The case, Brian Gorsline v. Board of Supervisors of Fairfield Township v. Inflection Energy, has been closely watched because of its potential to influence shale gas development far outside of the Lycoming County community at its center. But during the session the justices appeared inclined to keep a tailored focus.

Four residents, represented by the environmental organization PennFuture, challenged Fairfield Township’s decision to allow Marcellus Shale wells as a conditional use in an area zoned for residential and agricultural uses. They argue that the township disregarded its own zoning commitments by introducing industrial drilling into a residential district designed to preserve its quiet character.

A Lycoming County Court judge sided with the residents, but the Commonwealth Court reversed that decision. The appeals court reasoned that a shale gas well is similar to types of facilities that provide a broad public service — such as a power substation or a water treatment plant — that can generally be located in any zone.

The case offers the high court an opportunity to further define the scope of its 2013 landmark decision in Robinson Township v. Commonwealth that wiped out a provision of the state’s drilling law requiring shale gas development to be allowed in all zoning districts.

The Gorsline case has drawn an array of friend of the court briefs from industry groups, chambers of commerce, environmental organizations and local governments hoping to guide the court’s direction.

Some municipal parties in the Robinson Township case wrote that their case restored to municipalities the power to make local decisions about where to allow drilling, but did not give local governments the discretion to allow it everywhere. They urged the court to declare a bright-line rule that oil and gas development is an industrial land use incompatible with non-industrial zoning districts.

The Pennsylvania State Association of Township Supervisors, on the other hand, asked the court not to curtail municipalities’ authority to make their own local land use decisions, while Allegheny and Beaver counties wrote that if the court excludes shale development from broad areas it could “slam the door shut” on the region’s economic revitalization.

Chief Justice Thomas Saylor took a narrower path. The case may have constitutional overtones, he said, “but it seems to me that this is a land use case.”

“It is nice to talk about constitutional issues and policy issues and shale and gas,” he said to PennFuture attorney George Jugovic. “Could you talk about it like it’s a zoning case?”

Jugovic said the township erred by approving the wells without any substantial evidence that drilling operations are compatible with or similar to the allowable land uses in the residential and agricultural district.

Inflection Energy attorney Susan Smith said the township properly considered the issues and rightly decided that the finished wells would be similar to other allowed uses.

A producing natural gas well “is a land use that is passive, low-impact in nature,” Smith said.

Pressed by Justice Christine Donohue about whether the township should consider as part of its land use decisions the traffic, infrastructure, drilling and fracking operations required to get a well to produce gas, Smith said all of that activity is part of the well’s construction phase that falls outside of the realm of local zoning.

“We are regulating use. We are not regulating construction,” she said.

The justices did not indicate when they would issue a decision.

Drillers: Permit limbo hurts state’s competitiveness

HARRISBURG (AP) — As Pennsylvania’s governor touts the potential for billions of dollars in new investment by petrochemical manufacturers, his environmental agency is struggling to process applications to drill the natural gas wells that will be needed to supply the fledgling industry.

An analysis by the industry-funded Marcellus Shale Coalition shows that approval times for a key permit are going up in two of the three regional offices that review them. The Department of Environmental Protection confirmed that applications are lagging and pledged to do better.

The regulatory logjam is hurting Pennsylvania’s competitiveness with other shale states like West Virginia, Ohio and Louisiana, said David Spigelmyer, president of the Pittsburgh-based trade group.

“We continue to have no certainty in this industry,” he said.

The gas industry’s complaints about permitting come as Democratic Gov. Tom Wolf makes a push to attract plastics and petrochemical manufactures that use natural gas as a feedstock.

Last month, Wolf released a report by the research firm IHS Markit that said Pennsylvania can support four additional petrochemical plants beyond the $6 billion facility Shell Chemicals is planning outside Pittsburgh. The Shell plant will convert ethane — a natural gas liquid found in the Marcellus and Utica shale formations — into plastic pellets that manufacturers use to make toys, food packaging, garden furniture and many other plastics products.

“Pennsylvania has a once-in-a-generation opportunity to develop and implement a strategy that will cultivate a manufacturing renaissance and transform our economy across the commonwealth,” Wolf said in a statement accompanying the report.

But IHS Markit also warned Pennsylvania, faced with competition from other gas-producing states, “must begin taking immediate steps” to support long-term economic development. The report called for “aggressive action to address potential developmental and infrastructure constraints.”

Spigelmyer said the permitting delays cost money and complicate efforts to schedule crews to drill and frack.

Drillers working in Pennsylvania’s gas-rich southwest feel the bottlenecks most acutely. The regional office in Pittsburgh takes more than 200 days to process an erosion control permit, up from an average of 139 days in 2015, according to an industry analysis of government data.

The northcentral regional office in Williamsport works far more quickly, taking only 40 to 45 days, even though it handles roughly the same number of permits. A third regional office, in the state’s northwestern tip, also has seen a dramatic increase in permitting time.

Neil Shader, spokesman for the state Department of Environmental Protection, blamed the increasing delays on staff turnover, staffing shortages and enhanced scrutiny of permit applications. He said the agency is working to “enhance permit review consistency across its district offices” and also wants to improve the “quality” of the drillers’ permit submissions, which he said would help staff work more efficiently.

A 2012 policy instituted by Wolf’s predecessor, Republican Tom Corbett, was intended to streamline environmental permitting, requiring erosion control permits submitted through an expedited review process to be handled within 14 business days. But the environmental agency says most applications are disqualified from expedited review because they’re incomplete or deficient.

Wolf’s spokesman said regulators are testing an electronic permitting system — the agency still accepts only paper submissions for many types of permits — and working on other improvements that should make the process smoother.

The governor “recognizes that inconsistent review timelines among regional offices has resulted in frustration,” said the spokesman, J.J. Abbott.

The permitting process has become bogged down even as gas drillers are pulling back. Stung by low prices, operators drilled only 500 wells last year, the fewest since 2008, when the Marcellus Shale industry was in its infancy. Drilling has picked up in the first three months of 2017 but still lags far behind the pace set in the boom years.

Spigelmyer said Pennsylvania, the nation’s No. 2 natural-gas producing state after Texas, has an opportunity to use its natural resources to lure manufacturing jobs “if we get this right.”

“We’re at a tipping point if we are going to be a winner in developing jobs and long-term manufacturing opportunities,” he said.

NY nixes natural gas pipeline from Pennsylvania

ALBANY, N.Y. (AP) — State environmental regulators have blocked development of a second major pipeline that would have carried natural gas from Pennsylvania’s shale fields to New York and other markets.

New York’s Department of Environmental Conservation informed National Fuel Gas Co. April 7 it was denying a water quality permit for the 97-mile Northern Access Pipeline to western New York, saying it endangered wetlands, streams and other habitat.

The permit denial came about a year after DEC derailed the 124-mile Constitution Pipeline from Pennsylvania to eastern New York by denying a water quality permit. Constitution is appealing.

Feds release pipeline statement

WILKES-BARRE (AP) — A proposed 118-mile natural gas pipeline that would snake through parts of Carbon, Luzerne and Northampton counties would “result in some adverse environmental impacts,” the federal government says.

But those impacts would be reduced to “less-than-significant levels” provided the pipeline company follows the government’s recommendations and its own proposed mitigation measures.

That’s the bottom line of the Federal Energy Regulatory Commission’s final environmental impact statement of the PennEast Pipeline Project.


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