Range Resources Corp. and a shale-rich township in southwestern Pennsylvania plan to enter mediation to resolve their difficulties.

“We have agreed to accept their meeting,” Range spokesman Matt Pitzarella told NGI Friday.

The Mt. Pleasant Township Board of Supervisors proposed mediation in early April, after Range said it was revising its drilling plans in the Washington County municipality because of existing and proposed zoning restrictions on Marcellus Shale activities. Mt. Pleasant is considering a new zoning ordinance that would making drilling a conditional use, rather than a permitted use. That new distinction would come with 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.

Range is also upset over an existing ordinance that forbids temporary housing in work areas, including drilling sites. Range wants to house supervisors at well sites during drilling operations. Pitzarella described the housing issue as “a must” for Range.

The dispute is notable not only because Range is talking about moving investment dollars to other townships, but because the relationship between Range and Mt. Pleasant is among the oldest in the Marcellus. Range drilled the first successful Marcellus well, the Renz No. 1, in the area in 2004, and as of the last six months of 2010 produced 88% of the Marcellus gas in Washington County.

Although apparently brewing for some time, the debate between Range and Mt. Pleasant only became public after Range sent two letters to local landowners in early April, one touting a model ordinance and the other hinting at problems 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. 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 wrote on April 4 (see NGI, April 11).

Range held a local meeting on April 6 to discuss the issues. Range said that the meeting was simply an element from its model ordinance, a community relations effort that it undertakes in all its areas where it operates, but because the meeting came less than a week before a public hearing on the zoning ordinance, township officials accused the company of trying to sway public opinion.

Following the meeting, state Rep. Jesse White, a Democrat who represents Washington County, suggested mediation and contacted Donald Ziegler, a retired federal and county judge specializing in dispute resolution. The Board of Supervisors ran with the idea, offering to delay a vote on the ordinance for up to 60 days if Range agreed to meet with a “neutral third-party mediator.”

“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 an April 8 letter to Range.

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.

With more than 2,500 local governments in Pennsylvania, though, some in the industry want more consistency.

“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,” Lou D’Amico, president of the Pennsylvania Independent Oil and Gas Association, said, adding that although lawmakers are aware of the issue, none have proposed legislation.

Meanwhile, zoning ordinances continue to pop up across the Marcellus fairway.

“I think you’re going to see more of those,” Martin Fritz, president of EQT Midstream said at a conference in Pittsburgh in March, adding that industry should be open to discussing a statewide standard, even though it might mean additional regulations.

But Township groups believe the law is fine.

“We feel that municipalities and townships should have the right and authority to propose zoning for this activity like they do any other activity,” Elam Herr, assistant executive director for the Pennsylvania State Association of Township Supervisors, told NGI.

Herr noted that the association created a model ordinance, drafted with some industry input, for its members to use.

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