Range Resources Corp. is threatening to leave a western Pennsylvania township over a dispute with local officials.
"While we have made every effort to establish a positive and robust working relationship with your elected officials, our attempts continue to be rejected," the Texas-based driller wrote in a letter last Monday to the residents of Mt. Pleasant Township, west of Pittsburgh. "As a result, we are sending this communication to inform you that we have revised our future long-term plans in the township due to continuing difficulties with your township supervisors and their unwillingness to work with us."
Range hosted a town meeting last Wednesday to offer locals "a more detailed layout of our plans for the coming year."
According to numerous reports, Range is rethinking its future in Mt. Pleasant because officials won't allow housing trailers at drilling sites, but township officials say the trailer rule is a long-standing element of its existing zoning code and believe Range is trying to influence public opinion on proposed changes that would make the local zoning code more restrictive for drilling.
"I view it as Range's pre-emptive strike prior to our ordinance hearing," Bill Dinsmore, chairman of the Board of Supervisors in Mt. Pleasant, told NGI's Shale Daily, referring to a meeting planned for Tuesday (April 12).
The proposed ordinance would place conditions on drilling, particularly within the more residential parts of the township.
Range did not return several calls for comment, but in other reports, said that the ordinance did not factor into its decision.
Range Resources jump-started interest in the Marcellus Shale with the Renz No. 1 well drilled in Washington County, home of Mt. Pleasant Township, in 2004. Through the last six months of 2010, Range was responsible for 88% of the Marcellus production in Washington County with 33.81 Bcfe, followed by Atlas Resources at a distant second with 6% or 2.4 Bcfe.
The meeting last Wednesday followed two letters the company sent to local landowners and businesses.
On April 2 Range sent a letter outlining its contributions to the community through corporate giving and road improvements, as well as its adherence to a "model ordinance" that "covers nearly all aspects of natural gas production that could possibly cause concern" and "goes further than any legal restrictions we've seen to date, in terms of scope and requirements."
The company said its model ordinance even demanded a higher standard than the existing township ordinance.
Range concluded the letter by writing, "We look forward to seeing you throughout 2011, and beyond," but last Monday the company sent out a second letter suggesting that clashes between it and township officials had reached an impasse.
Because Pennsylvania is home to more than 2,500 municipal entities -- from cities and counties to boroughs and townships -- companies increasingly must deal with a variety of different drilling ordinances from one location to the next, leading both state representatives and industry advocates to call for some measure of standardization (see Shale Daily, March 18).
While debates over drilling ordinances are not uncommon, this is the largest tiff between an active driller and the community where it drills, according to Lou D'Amico, president of the Pennsylvania Independent Oil and Gas Association (PIOGA). "I'm surprised that it's taken as long as it has for something like this to happen," D'Amico told NGI's Shale Daily, adding that while he's heard rumbling from other companies about leaving communities, this is the first public threat he knows about in Pennsylvania.
D'Amico said he believes townships are battling not only drilling companies but also leaseholders through restrictive zoning. "It's an issue across the state and will continue to be an issue until we can get some clarification from state government on what kind of things can be regulated and should be regulated by local zoning ordinances," D'Amico said.
He said that state lawmakers are becoming aware of the issue, but haven't yet proposed legislation to address it. The judicial branch, however, weighed in on the matter several years ago.
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.