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State Court Rejects PA Legacy Producers Lawsuit to Stop New Oil/Gas Regulations

A state Commonwealth Court judge has denied the Pennsylvania Independent Petroleum Producers Association's (PIPP) lawsuit to stop a package of new oil and natural gas regulations, writing in an opinion that the rules have not yet become law and therefore don’t warrant any action from the court.

PIPP, which represents the state's legacy oil and gas producers, filed its lawsuit last month against the Pennsylvania Department of Environmental Protection's (DEP) overhaul of environmental regulations for the industry, claiming that it would put many of its members out of business (see Shale DailyMarch 28). The organization wanted a declaration from the court that the new regulations are unlawful and unenforceable, requesting that a final hearing set for Thursday before the Independent Regulatory Review Commission (IRRC) be postponed until the court made its decision.

"To obtain relief in this court, PIPP must show that it is aggrieved and that there is an actual controversy between the parties that is not contingent on future events that may never occur," Senior Judge James Gardner Colins wrote in his opinion. "...Where the governmental act that would affect the petitioner has not occurred and it is uncertain whether it will occur, the requirement of an actual controversy is not satisfied and the claim is not ripe for judicial determination."

After more than four years of working on the rulemaking package, which includes separate regulations for conventional and unconventional oil and gas producers, DEP sent the new regulations to the state's Environmental Quality Board (EQB) in January (see Shale DailyJan. 6). The EQB approved them the following month. The IRRC, which is charged with reviewing regulations to make certain that an agency has the statutory authority to enact them and considers economic impact, public health and safety, must now approve the package before it becomes law.

PIPP alleged in its lawsuit that DEP violated a state law passed in 2014 by failing to craft regulations for conventional oil and gas producers separately from those governing shale drillers (see Shale DailyJune 27, 2014). PIPP's members, the organization said, would be subjected to the same rules as "billion-dollar, multinational corporations engaged in large-scale, unconventional drilling for natural gas."

The DEP has continued to maintain that the rules were crafted transparently and are fair and balanced.

While the regulations contain separate rules for both industries, conventional and unconventional producers would still be required to adhere to some of the same rules. Oil and gas wells near scenic river corridors, parks, forests, schools and playgrounds would receive closer regulatory scrutiny, along with other areas deemed resource protection zones. All operators would, among other things, be required to conduct reviews of abandoned and active wells near their pads prior to drilling, and they would be required to develop a monitoring plan to address such risks.

The court said under the state's Regulatory Review Act that new rules can't be published as final regulations until the IRRC approves them. Gardner noted that the IRRC could deny the package or have it changed and added that PIPP has yet to exhaust all its administrative remedies.

PIPP had also argued against finalizing the regulations, claiming they would financially harm its membership immediately after becoming law. But the court said the organization failed to detail those costs adequately. 

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