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Pennsylvania Supreme Court Narrowly Rules to Toss Permit for NatGas Wells in Residential Area

Two families that have fought for years to stop Inflection Energy LLC from drilling several wells near their homes in northeast Pennsylvania won a victory last week when the state Supreme Court found that the company failed to prove oil and gas development is similar to other uses authorized in a residential-agricultural (R-A) zoning district. 

The families had filed an appeal of the Fairfield Township Board of Supervisors’ decision to issue Inflection a conditional use permit in the R-A district. A trial court sided with the residents in 2014, finding that oil and gas drilling does not meet the criteria of the township’s zoning ordinance. The state Commonwealth Court later reversed that decision and upheld the conditional use permit, finding that natural gas development is authorized because it’s similar to a public service facility that can be located in nearly any zoned district where facilities for sewage, water, power and other services exist.

The high court again invalidated Inflection’s conditional use permit last Friday, ruling that the evidentiary record does not support the supervisors’ decision and finding that drilling, completing and operating multiple natural gas wells in the district is not similar to any other uses authorized under Farifield’s zoning ordinance.

The case has been watched closely for years. It’s been at the forefront of efforts by environmental groups and other shale gas opponents that have argued R-A districts, which blanket most of the state, are not compatible with an industrial use like oil and gas drilling.

“The court’s decision makes clear that shale gas development is an industrial land use, and that local government must rigorously consider what other land uses it is compatible with before allowing it to occur in districts designed for incompatible uses, such as a district designed to foster a quiet residential environment,” said attorney George Jugovic Jr. of PennFuture, the environmental advocacy group that represented the families.

Most drilling across the state occurs in R-A districts. An opinion from the high court that would have found it to be incompatible with such zones could have had a deep impact on the industry’s operations. Several townships across the state have faced similar challenges to drilling permits by opponents claiming that natural gas development in residential areas threatens homes, businesses, public safety and the legal rights afforded to residents under an environmental amendment in the state’s constitution.

The high court, however, did not address those issues and instead focused strictly on the Fairfield Township case. Responses to the opinion were mixed as a result. 

“What the court did not say was that oil and gas drilling could never take place in residential and agricultural districts -- as some environmental groups were arguing,” said Kevin Sunday, director of government affairs for the Pennsylvania Chamber of Business and Industry. “Nor did the court say that local governments may never authorize any development for any industry with a conditional use. It is a narrow decision, and the implications will be further borne out as more zoning cases are litigated.”

The justices overturned the lower court’s ruling in a 4-3 opinion. Attorney Christopher Nestor, of the Harrisburg, PA-based law firm Overstreet & Nestor LLC, who was not involved in the case, noted that both the majority and dissenting opinions indicated that municipalities are not precluded from allowing oil and gas activities, regardless of whether they occur in R-A or industrial zones.

“Applying our standard of review, we hold that [Fairfield Township’s] conclusion that Inflection satisfied its burden of proving that its proposed use was similar to a permitted use in an R-A district is not supported by the record,” Justice Christine Donohue wrote for the majority. “In so ruling, this decision should not be misconstrued as an indication that oil and gas development is never permitted in residential/agricultural districts, or that it is fundamentally incompatible with residential or agricultural uses.”

Sunday added that while the court said oil and gas drilling could take place in R-A districts, zoning regulations might have to be structured more precisely in some cases.

In his dissenting opinion, Justice Kevin M. Dougherty suggested that such matters should be left to the expertise of local governing bodies, which the majority acknowledged in noting that state law permits municipalities to amend zoning ordinances to allow oil and gas development in all zoning districts.

It’s unclear what’s next for Inflection, which holds more than 100 permits across Lycoming County where Fairfield is located, according to state Department of Environmental Protection records. There are other wells in the township too, but the high court found that the case record included very little information about previous permits issued there.

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