A shale-rich township in southwestern Pennsylvania is proposing mediation to resolve a dispute with a local gas driller.
The Mt. Pleasant Township Board of Supervisors sent a letter to Range Resources Corp. last Friday, offering to delay an upcoming vote on a proposing zoning ordinance if the company agreed to meet with a "neutral third-party mediator." Range is still reviewing the letter, but spokesman Matt Pitzarella told NGI's Shale Daily that the company views it "as a pretty welcome sign."
The Board of Supervisors said state Rep. Jesse White, a Democrat who represents Washington County, home of Mt. Pleasant, suggested mediation and contacted Donald Ziegler, a retired federal and county judge specializing in dispute resolution.
Separately, but related, White is working to get Mt. Pleasant and other local governments involved in a Marcellus Municipal Cooperative to help streamline proposed ordinances and inspections (see Shale Daily, March 18).
"By utilizing a professional mediator who is educated in the law yet has no financial stake in Mt. Pleasant Township or Marcellus Shale, we can cut through the propaganda and focus on the facts," the Board of Supervisors wrote in its letter.
The Board of Supervisors suggested that Mt. Pleasant and Range split the $5,000 mediation costs evenly.
If Range agrees to the mediation by Friday, the Board of Supervisors said it would delay a vote on its ordinance for 60 days, but said that regardless of what Range decides, it would still hold a public hearing on the document scheduled for Tuesday.
The relationship between Range and Mt. Pleasant is as old as the Marcellus Shale boom in Pennsylvania. Range drilled the Renz No. 1 well, the first successful Marcellus well, in Mt. Pleasant in 2004 and remains a major producer in the area.
A dispute between the two sides became public last week after Range sent two letters to area landowners, one touting its self-imposed "model ordinance" and the other complaining about it increasing difficulties with township officials. Range also hosted a public meeting in Mt. Pleasant to discuss the drilling plans in the area (see Shale Daily, April 11).
However, Range said its issues with the township have been brewing for a while and that the meeting was a routine part of Range's community outreach operations, with a clause in its model ordinance that requires meeting with local landowners.
"The meeting and our issues with the township got lumped together, but they're really unrelated," Pitzarella said.
The main thrust of the debate is a proposed ordinance that would making drilling a conditional use, rather than a permitted use. That would create a series of guidelines for how drilling could take place in different parts of the township.
"We don't have a problem with the conditions. It's the process," Pitzarella said, explaining that Range doesn't mind tough regulations as long as it knows about them up front. He said some conditions can extend the permitting process by a year.
Mt. Pleasant believes it is being proactive. "Let us be crystal clear," the Board of Supervisors wrote in its letter to Range. "Mt. Pleasant Township is not trying to stop Range Resources or any other reputable and responsible company from doing business. We are not trying to damage our local small businesses or keep leaseholders from collecting royalty payments."
While Range said it was revising its future plans for Mt. Pleasant over the debate, Pitzarella said that shouldn't be taken as a threat that the company plans to leave its longtime base of operations. But with drilling plans often looking two years down the road, he said Range has been forced to look for nearby municipalities that can handle the rig meant for Mt. Pleasant.
"We have no certainty, because we don't know when we're going to get a permit," Pitzarella said.
As for leaving Mt. Pleasant, Pitzarella said, "We're not at that point...that's the last thing that we want."
In addition to being worried about losing Range, the Board of Supervisors is also worried about being sued.
Pitzarella said talk of an pending lawsuit is false, but added that Range believes some elements in the proposed ordinance supersede state law and, if approved and enforced, could be grounds for a lawsuit down the road. In its letter, the Board of Supervisors said a lawsuit would only serve to delay drilling for years, hurting both the company and royalty owners.
In a pair of landmark cases in 2009, the Pennsylvania Supreme Court ruled that local oversight of oil and gas operations can't conflict with state regulations, but also confirmed that local governments are allowed to zone where drilling can occur.