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Industry Groups Seek Permission to Intervene in Act 13 Case

The top three trade groups that represent the oil and gas industry in Pennsylvania filed a petition with the state's Commonwealth Court on Wednesday, asking that they be allowed to intervene in the ongoing legal battle over Act 13, the state's omnibus Marcellus Shale law.

Last December, the Pennsylvania Supreme Court ruled that parts of Act 13 were unconstitutional and remanded the case, Robinson Township et al. v. Commonwealth of Pennsylvania et al., back to Commonwealth Court (see Shale Daily, Dec. 20, 2013). The high court rejected a state request to reconsider its ruling last month (see Shale Daily, Feb. 24).

In a 23-page document, the American Petroleum Institute (API), the Marcellus Shale Coalition (MSC) and the Pennsylvania Independent Oil & Gas Association (PIOGA) agreed with the lower court's previous position that they collectively have "compelling and legally enforceable interests in the outcome of this case."

But the trade groups argue that with parts of the case now remanded back to Commonwealth Court, they don't necessarily share the same interests as the state.

"This case on remand presents several new issues beyond the constitutionality of Act 13 in its entirety," the groups said. "It now involves the implementation of the Supreme Court's mandate.

"It can no longer be said that [we] are necessarily aligned with the Commonwealth parties. Rather...[we] are potentially directly adverse to the Commonwealth parties...[and] should be permitted to intervene in order to protect [our] unique, compelling and unrepresented interests in the matter."

For example, the groups said the state Department of Environmental Protection (DEP) continues to rely on parts of Section 3215, which covers well location restrictions. But the groups contend those restrictions are not severable from others that were invalidated by the Supreme Court.

"Section 3215, as enacted, contained both setbacks and a corresponding, and longstanding, waiver provision pursuant to which the industry and the DEP agreed to waive certain setbacks provided that the environment was fully protected," the groups said (see Shale Daily, Jan. 17). "As enacted, and as historically applied for over 27 years, the waiver was an integral part of the overall regulatory scheme that recognized and protected property rights.

"Now, however...[DEP] is proposing through the Board regulatory setbacks without a corresponding allowance for a waiver."

The groups also are concerned over several rules codified into Act 13, including the payment of impact fees; the verbiage of permit applications; requirements for the construction of wells, well sites and well casing; recordkeeping and reporting; bonding requirements, and presumptions of liability.

"No current party to this case must actually plan for, finance and comply with Act 13's extensive list of regulatory requirements," the groups said. "Thus, no party has the same interests as the industry parties in how the issues remanded to this court, including severability, are decided."

The groups said that from their perspective, the Supreme Court's ruling "eviscerates the needed reforms that Act 13 provides and interferes with [our] legally enforceable property rights.

"Real and other property has been acquired, substantial investments have been made and thousands of employees have been hired, and materials, equipment and other resources have been deployed across the Commonwealth...the ability of the industry parties to utilize and enjoy their recognized property interests and realize reasonable returns on their substantial investments...has been placed in jeopardy."

The groups added that oil and gas companies have paid, and will continue to pay, the impact fees levied under Act 13. According to the groups, the oil and gas industry paid more than $400 million in impact fees for the 2011 and 2012 reporting periods. Localities, including those that filed the lawsuit against Act 13, will continue to receive payments.

The request was signed by PIOGA Executive Director Lou D'Amico, MSC President David Spigelmyer and API Vice President Harry Ng.

MSC and PIOGA had asked the Commonwealth Court for permission to intervene in the case when it was first introduced in 2012. That request was ultimately rejected, but they were designated as amicus curiae parties in the case, along with MarkWest Liberty Midstream & Resources LLC, Penneco Oil Co. Inc. and Chesapeake Appalachia LLC (see Shale Daily,July 16, 2012; April 10, 2012).

"They tried the same thing before and the court rejected them," Jordan Yeager -- an attorney with the Morrisville, PA-based firm Curtin & Heefner LLP, representing the plaintiffs -- told NGI's Shale Daily on Thursday. "There's no reason for the court to revisit what it has already decided."

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