Marcellus Shale Watch

By Andrew T. Bockis and Joel R. Burcat

Saul Ewing, LLP, Harrisburg, PA

On February 1, 2010, Governor Rendell signed into law House Bill 1847, which amends the Coal Refuse Disposal Control Act, 52 P.S. §§ 30.51 – 30.66.  The amendments, known as the Coal Bed Methane Dispute Resolution Act (P.L. ___, No. 2010-4), establish the Coal Bed Methane Review Board, a quasi-independent panel that will receive administrative and clerical support from the Department of Environmental Protection.  This Board will resolve disputes between property owners over the location of coal bed methane wells and access roads.  Prior to enactment, surface land owners often had little recourse if they did not approve of the location of a coal bed methane well drilled by the mineral rights owner.

Coal bed methane is a form of natural gas that is extracted from a coal seam.  It is typically owned by the owner of the coal rights.  The amendments do not change the ownership of property or mineral rights, but rather create a more timely and less expensive process for property owners to clear up disputes that arise over the location of coal bed methane wells without going to court.

The amendments will give surface property owners the right to raise objections before the Board to a well operator’s proposed well location.  This process would also allow surface property owners to indicate alternative locations at which the proposed coal bed methane well or access road could be placed.

The amendments require well operators to provide notice of the proposed location of the proposed well to all landowners who are within 1,000 feet from the proposed well location.  Landowners will have 15 days from the date they receive the notice to file an objection with the Board.  If no objections are filed within that time period, the Department of Environmental Protection may proceed to act on the proposed well application.  If objections are filed, the Board will typically conduct a hearing within 10 days, and the Board is required to make a decision within 10 days from the time the hearing concludes.  The Board will assist the parties in agreeing upon a location of the well or access road, but if the parties fail to agree, the Board will make its own written determination.  An appeal from the Board’s decision may be taken to the Court of Common Pleas in the judicial district in which the affected property is located.

The Board will be a three member panel made up of individuals appointed by the Governor from a list of nominees submitted by the Pennsylvania Farm Bureau, in addition to nominees submitted jointly by the Pennsylvania Oil and Gas Association, the Independent Oil and Gas Association and the Pennsylvania Coal Association, and nominees submitted by the deans of Penn State University’s College of Earth and Mineral Sciences.  Board members will serve three year terms, and they may be reappointed.

The amendments do not have any direct impact on Marcellus gas production.  They may perhaps, point the way to legislative initiatives that result in cooperative approaches to resolving disputes relating to Marcellus gas.  The Governor will have until early May to appoint the initial members of the Board.  The notice-and-objection provisions of the amendments will go into effect when the Department of Environmental Protection publishes a notice in the Pennsylvania Bulletin that all initial members have been appointed.

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