Judges hear debate on sections of Act 13 drilling law

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PHILADELPHIA — Attorneys representing Pennsylvania and the oil and gas industry argued Wednesday for maintaining several sections of the state’s drilling law that are being challenged after the state Supreme Court struck down key aspects of Act 13 last year.

The arguments before the Commonwealth Court focused on narrow issues. The validity of the entire law is not in question.

Instead, the challengers — who include municipalities, local officials, environmental groups and a doctor — argued that four sections of the law should be dropped or changed after the Supreme Court ruled in December that the law unconstitutionally limited local governments’ right to say where oil and gas facilities can be located.

In their questions Wednesday, the judges probed the consequences and limits of the law’s notification and disclosure rules that affect doctors, water well owners and drilling companies. The state’s attorneys emphasized that Act 13 provides for more disclosure than was required before the law was adopted in 2012, but the challengers said the law provides inadequate or unequal protection.

If the court strikes down a section of the law that limits what doctors can reveal about confidential drilling chemicals that affect their patients, the state would return to a situation where doctors and patients are not entitled to any of that information unless a company volunteers it, said Howard Hopkirk, senior deputy attorney general.

“That kind of takes your breath away, that statement,” said President Judge Dan Pellegrini, who repeatedly said that the chemicals used to coax gas from wells are “essentially a big secret.”

The law requires companies to disclose details about the chemicals they inject underground during hydraulic fracturing, but it allows exemptions for trade secrets.

The judges also asked whether the Public Utility Commission should still have a role in reviewing municipal ordinances that regulate oil and gas development now that the universal zoning provisions of the law have been struck down.

“At least two legs of a three-legged stool are gone,” Judge Pellegrini said.

The PUC still has a crucial job in determining whether ordinances meet the surviving standards of the law and whether municipalities are eligible to receive impact fees paid on shale gas wells, said Matt Haverstick, an attorney representing the commission.

“It’s not the weak sister that is left over,” he said.

An attorney for several industry trade groups indicated companies want a streamlined way to challenge ordinances that are designed to curtail development.

“We’re trying to overcome obstruction,” said David Overstreet, an attorney representing the Marcellus Shale Coalition, the Pennsylvania Independent Oil and Gas Association and the American Petroleum Institute.

The challengers said the PUC’s role is too connected to the invalid provisions to function without them and should be eliminated. What might have been a simple ordinance review by the commission would now be very complicated, attorney Jordan Yeager said.

The parties also debated whether Act 13 can require the Department of Environmental Protection to alert public water suppliers but not private water well owners of spills, and whether companies can use eminent domain to take property for gas storage.

The attorneys and judges acknowledged Wednesday that much about the law will be left unsettled even after the Commonwealth Court rules on the issues in front of it. Only future cases and new legislation will provide more clarity.

“We’ll be back here someday,” Mr. Haverstick said.

First Published May 14, 2014 2:33 PM

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