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PA Trade Group’s Challenge to DEP Permitting Advances; Could Affect New Oil/Gas Rules

The Pennsylvania Independent Oil and Gas Association (PIOGA) can proceed with a lawsuit that alleges the state Department of Environmental Protection (DEP) is overstepping its authority by enforcing permit requirements for oil and gas wells that were invalidated in 2013, the state Commonwealth Court has ruled.

Since June, PIOGA has been battling the DEP in court (see Shale DailyJune 22, 2015). It maintains that the agency continues to require operators to identify impacts to public resources and wildlife in their permit applications. The state Supreme Court threw out the requirements when it deemed parts of Act 13 -- the state's omnibus oil and gas law -- unconstitutional in a broader case that challenged the law, otherwise known as the Robinson Township decision (see Shale Daily, Dec. 20, 2013).

PIOGA wants the court to declare that DEP has no authority requiring operators to identify parks, forests, scenic rivers, national landmarks and other public resources so the agency can determine the impacts and decide whether to issue a permit for wells near them. Late last month, the Commonwealth Court overruled the DEP's preliminary objections to PIOGA's case.

The agency had argued that it should be dismissed because PIOGA has an "adequate remedy" in an administrative appeal with the state Environmental Hearing Board (EHB). The agency also said the organization has no standing in the matter and noted that neither it nor its members have suffered any harm because no permit has been denied over public resource protections.

Under section 3215 of Act 13, DEP has continued to ask operators whether a proposed well would impact a public resource. If so, an operator has to identify those resources in a special form and send clearance letters from applicable state agencies. That part of the law, however, was invalidated, the Commonwealth Court said in overruling the DEP's preliminary objections. The court wrote that "PIOGA need not challenge the validity of section 3215...because our Supreme Court has already found that provision to be unconstitutional and enjoined its application in Robinson Township."

The court also said PIOGA does have standing for declaratory judgement because its members spend a considerable amount of time and money to "simply apply for the permit." It found that the organization has no remedy with the EHB, as well.

"The EHB does not have jurisdiction to consider PIOGA's pre-enforcement challenge or the authority to grant the relief requested and, consequently, the administrative remedy DEP purports is available is not adequate to address PIOGA's challenge," the court said, noting that the EHB addresses post-enforcement issues only.

As PIOGA's challenge to the state's permitting process advances, the case carries with it more weight. On Wednesday, the DEP sent to the state Environmental Quality Board (EQB) a proposed overhaul of regulations and environmental controls for the oil and gas industry (see Shale DailyJan. 6). Provisions included in the package would expand public resource protections and require operators to also be mindful of schools and playgrounds in their permit applications. If the EQB approves the rules, they would then go to the state's Independent Regulatory Review Commission this spring ahead of implementation this summer.

PIOGA "has challenged the public resource protection provisions in this rule," said Deputy Secretary for Oil and Gas Management Scott Perry during a press conference on Wednesday to discuss the new regulations. "Obviously, we disagree with PIOGA's position that the Supreme Court in Robinson Township invalidated our ability to further protect public resources. While this matter is under litigation, we will certainly comply with any final ruling the court may have."

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