An appellate court in Pennsylvania has ruled that compressor stations fit the legal definition of "gas production" and therefore can't be banned by localities where other aspects of natural gas production are already permitted.
In a ruling filed on May 9, a three-judge panel of the state's Commonwealth Court said a compressor station operated by New Century Pipeline LLC does not run afoul of a Bradford Township zoning ordinance, reversing a decision by a McKean County judge.
"In sum, we hold that operation of the compressor station is 'gas production,' as that term is used in [state law], and, as such, [is] a permitted use," Judge Mary Hannah Leavitt wrote. "Any other interpretation makes 'gas production, including equipment necessary to drilling or pumping operations' impermissible, which contradicts the zoning ordinance's express authorization of gas production in the Forest District."
Judges P. Kevin Brobson and Renee Cohn Jubelirer concurred with the ruling.
At issue is Bradford Township's zoning ordinance for its Forest/Slope Residence District, which the locality enacted to protect steeply sloped forested areas from erosion and development. A township zoning officer issued a notice on Aug. 7, 2009 that a New Century compressor station in the district violated the ordinance's permitted uses and structures clause.
The township zoning board ordered New Century to remove the compressor station. The company appealed, but McKean County Common Pleas Senior Judge William Morgan denied New Century's request for a hearing and affirmed the zoning board's decision on June 18, 2010.
"We always sort of knew intuitively that it didn't make sense for a municipality to have as a permitted use oil and gas production and then not allow you the means necessary to actually produce oil and gas," Matthew Wolford, an Erie, PA-based attorney who represented New Century, told NGI's Shale Daily on Tuesday. "Our view is that the Commonwealth Court reaffirmed the common sense nature of the position that we had."
Wolford added that the most frustrating thing about the legal battle was that Bradford Township had allowed another company's compressor station to operate in another part of the township but within the same zoning district.
"They knew it and they didn't do anything about it," Wolford said. "So this was more about politics than about good policy."
Gregory Henry, Bradford Township special counsel, called the Commonwealth Court's decision "disappointing" because it had prevailed before the zoning hearing board and Morgan.
"The central issue in the case is whether or not the operation of a compressor station falls within the phrase 'gas production,' or whether it's something else," Henry told NGI's Shale Daily on Tuesday. "We had asserted in that it constituted processing, not production. Production is allowed in this particular zoning district but not processing."
Henry said the township had not yet decided whether to file a petition for allowance of appeal to the Pennsylvania Supreme Court, but it was facing a June 8 deadline to do so. He said any appeal would also have to meet certain criteria.
"For example, the township could assert that this decision was in contravention of a Supreme Court decision that was relevant to the outcome," Henry said. He said he believes two cases -- Kilmer v. Elexco Land Services Inc. and Gulf Oil Corp. v. City of Philadelphia -- would provide the township with ammunition in a legal battle, but he added that the provisions contained in Act 13 of 2012 could ultimately make any challenge moot (see Shale Daily, Feb. 15).
"Act 13 essentially stripped [localities] from their ability to govern oil and gas production and processing, pursuant to the municipalities' planning code," Henry said. "Before the act was enacted, a political subdivision couldn't pass ordinances that would bear upon how oil and gas production or processing would take place, but they could proscribe certain endeavors related to resource production from certain areas of the township, as long as they allowed these activities to occur in some area of the township.
"It seems to me that when it comes to oil and gas production and processing, Act 13 obviates the power of local governments to pass legislation like that anymore. Basically these things can take place in any zoning district as long as you follow certain rules."