Archive for April, 2009

News Item: Shale Development a Bright Spot in a Difficult Price Enviroment

If you don’t already read the Fort Worth Star-Telegram you’ll benefit from this article summarizing recent comments bearing on Marcellus Shale production and related issues.  Prices are low but interest in Marcellus Shale persists.  Pipe capacity could be a problem going forward.  Speculation on the likelihood of severe tax changes in the gas production realm.  You can read the article by clicking here.

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House Committee Considering Expansive Surface Owner’s Protection Act

On March 31st the Pennsylvania House Committee on Environmental Resources and Energy began consideration of an expansive piece of legislation imposing new requirements on gas drilling operators in relation to the rights of land surface owners.  The Bill proposes:

  • prior notice to surface owners prior to entry upon land for certain pre-drilling activities, 
  • notice to surface owners within one half mile of a proposed well prior to submission of a Well Permit application, 
  • plan and notice content requirements,
  • a mandatory offer to enter into a “surface use and compensation agreement”,
  • required contents of a surface use and compensation agreement,
  • a definition of required compensation to surface owners,
  • provisions for enforcing compensation obligations, 
  • a requirement to post security for compensation,
  • obligations for the restoration or replacement of polluted water supplies and a presumption of operator responsibility for pollution of water supplies within 2,500 feet of a well occuring within six months after completion of drilling or alteration,
  • a provision for recovery of attorneys fees and for treble damages in certain instances of failure to comply with the Act.

The PaDEP would be prohibited from issuing a Well Permit or renewing an existing permit if the operator is not in compliance with with the Act, placing DEP squarely into a role of protecting surface owner rights established by the bill, if enacted.

The full text of HB1155 can be viewed by clicking here.

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Pennsylvania Supreme Court Declares Gas Wells Not Exempt from Zoning

In a carefully reasoned decision the Pennsylvania Supreme Court has erased the decades-long assumption that gas wells were exempt from zoning.  The Oil and Gas Act contains a provision which has long been assumed to provide that municipal zoning was superseded or preempted from regulating the location of gas wells.  More than half of Pennsylvania’s 2,500+ municipal government exercise zoning power.  It was previously believed that, due to the wide-ranging regulation of the gas exploration industry by the Pennsylvania Department of Environment Protection, municipal governments were left with little control.  Now, every gas well must be reviewed for its conformance to the zoning district and use provisions of municipal zoning ordinances.  Read a fuller explanation of the case, Huntley & Huntley v. the Borough Council of the Borough of Oakmont,  here.

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Court Limits – But Did It Preclude – Municipal Regulation of Gas Exploration

The Pennsylvania Supreme Court has stricken an extensive municipal regulation of gas exploration, but what are the new limits of municipal authority over gas drilling and related exploration activities?   Read a full article on this case here.

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