In the heart of the Marcellus Shale gas boom, the fracking industry was dealt a blow this past week when the Pennsylvania State Supreme Court ruled that the state’s sweeping Marcellus Shale law, known as Act 13, was unconstitutional.
The high court’s 4-2 ruling, 14 months in the making, comes just as Marcellus production is poised to exceed 13 Bcf/d this month, skyrocketing from less than 2 Bcf/d pulled from the play just three years ago.
That data from the Energy Information Administration, means the Marcellus is expected to comprise 18% of total U.S. natural gas production in December.
According to the drilling industry, Act 13 would help support such staggering production numbers. In particular, they cited the law’s provision that state regulations would trump local zoning. Before the law was passed in February 2012, drillers needed to navigate a maze of zoning rules that would change from town to town. Act 13 meant certainty: there would be only one set of rules with which drilling companies needed to comply.
But municipalities saw it differently. They wanted to maintain the right to determine where industrial activity would take place within their borders. During court proceedings, the plaintiffs argued that the drilling industry was being singled out for special treatment. The state wouldn’t override local zoning regulations to, say, build a steel mill next to an elementary school, so why should a well pad be any different?
The high court agreed with the municipalities, while citing a unique state amendment called the Environmental Rights Amendment. Only Montana and Rhode Island have such an amendment that puts citizen access to clean air and water on par with political rights, according to the 162-page court opinion.
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“To describe this case simply as a zoning or agency discretion matter would not capture the essence of the parties’ fundamental dispute regarding Act 13,” the justices wrote in their opinion. “Rather, at its core, this dispute centers upon an asserted vindication of citizens’ rights to quality of life on their properties and in their hometowns,” the justices wrote.
Meanwhile, the dust is settling, and all parties are regrouping to decide what this decision means for them.
The legislation was seen as one of the key goals of Governor Tom Corbett’s administration, and the court’s decision to strike down key parts of Act 13 is likely to resurface during Corbett’s election campaign.
Patrick Henderson, energy executive for Corbett, said it’s too early to say what impact this will have on shale development.
“It’s important to note that most of the municipalities in Pennsylvania have acted in a responsible manner,” Henderson said Friday. “The industry has been here for the last five years and has established relationships, hopefully, that will prevail at the end of the day.
“But there’s an uncertainty that’s been created that the legislature and governor tried to settle,” he added. “The core of Act 13 was predictability, and the court has decided to legislate from the bench.”
Meanwhile the question remains of what municipalities will do next.
“The question is, are those municipalities who modified their zoning ordinances to comply with Act 13 going to exercise their authority now to go back and change them to readdress the changes they made?” said George Jugovic Jr., chair of law staff for environmental advocacy group PennFuture.
To be sure, the high court’s decision will not only reverberate in Pennsylvania, but in other states where policies on land use are clashing with the new phenomena of shale drilling.
The Supreme Court rendered a decision, but the debate doesn’t end here.