Transcript LOCAL GOVERNMENT REGULATION OF THE ENERGY INDUSTRY Blaine A. Lucas, Esquire University of Pittsburgh Energy Law and Policy Institute August 2013

LOCAL GOVERNMENT REGULATION
OF THE ENERGY INDUSTRY
Blaine A. Lucas, Esquire
University of Pittsburgh
Energy Law and Policy Institute
August 2013
Pennsylvania Local Government Units
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Number of counties – 67
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Number of municipalities – 2,562
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Cities (1, 2, 2A, 3)
Boroughs
Townships (1 & 2)
Home Rule
Legal Framework: Three Basic Issues
1. Does the municipality have the statutory authorization to
regulate the use?
2. Is this authorization limited or “preempted” by state
environmental regulations?
3. The procedural and substantive content of local
regulation.
Pennsylvania: Local Authority to Regulate
the Energy Industry
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Municipalities Planning Code (MPC)
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Municipal Codes
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Nuisance Law
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Vehicle Code
Primary Forms of Local Government
Regulation
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Zoning Ordinance
Subdivision and Land Development Ordinance (SALDO)
Stormwater Management Ordinance
Noise Ordinance
Seismic Testing Ordinance
Roads
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Excess Weight
Driveway Access
Crossings/Encroachments
Zoning Ordinances:
Washington County
Municipally Zoned
Unzoned
Zoning Ordinances:
Lycoming County
Municipally Zoned
County Zoned
Zoning Ordinances:
Jefferson County
Municipally Zoned
Unzoned
Regulation via Zoning: Permitted as
Permitted Use
(Use by Right)
Zoning
Officer
Conditional
Use
Governing
Body
Special
Exception
Zoning
Hearing
Board
Conditional Uses/Special Exceptions
• More scrutiny in public hearing
• Longer time for decision
• Ability to impose conditions
Regulation via SALDO
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Is the lease or use of all or portion of the property a
“subdivision”?
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Does the facility constitute a “land development” (includes
a single non-residential building)
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If the answer to either is yes, normal SALDO review and
approval process
Preemption: Defined
“The matter of preemption is a judicially
created principal based on the proposition
that a municipality, as an agent of the
state, cannot act contrary to the state.”
Types of Preemption
• Express
• Implied or “field”
• Conflict
Tenets of Preemption
• Preemption not presumed
• Case-by-case analysis, based on state
statute at issue
• Cannot regulate operational aspects of
state regulated facility
Tenets of Preemption
• Cannot regulate engineering/geological
standards
• Regulate location?
• Regulate setbacks, heights and buffers
unless in conflict with state regulations?
Preemption: Wind Energy Facilities
• No express preemption
• No comprehensive statewide regulation
• Conflict preemption?
Preemption: Oil and Gas
Prior Law: Oil and Gas Act §602
• All ordinances preempted except per MPC or Floodplain
Act
o Zoning
o Subdivision and Land Development
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Not same features or purposes of Oil & Gas Act
Range Resources v. Salem Township
o Can’t have “comprehensive regulatory scheme”
o Can’t single out oil and gas
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Huntley & Huntley v. Oakmont Borough
o Where v. how question
o Designation of zoning districts in which oil & gas facilities can (and
cannot) be located not preempted
Municipal Reaction to the Supreme Court
Decisions
Wave of ordinance activity
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2009 – present
Over 275 ordinances
Over 210 municipalities
Mostly zoning ordinance amendments
Types of ordinance restrictions
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Exclusionary zoning
Excessive setbacks
Noise
Well features/environmental
restrictions
• Excessive fees
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Mid-stream restrictions
Road restrictions
Seismic testing limits
Constitutional problems
Other limits
Local Government Regulation of Oil
and Gas Under Act 13 of 2012
• Places additional limits on local
ordinances
• Changes the forum/process for
resolution of legal challenges
Preemption of Local Ordinances
(Chapter 33)
• Section 3302: All ordinances preempted except those
adopted pursuant to the MPC and the Flood Plain
Management Act (same as existing law)
o Ordinances cannot address same features or purposes of Chapter
32 (same as existing law)
• Section 3303: Environmental acts also preempt local
regulation (new)
Reasonable Development (§3304)(New)
Use/Distance Restrictions:
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Well/Pipeline Assessment/Seismic: Permitted – all areas
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Subterranean Operations: No limits
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Oil and Gas Operations: Permitted – all districts
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In Residential – may prohibit/require conditional use for wells – if less than 500 feet
from well bore to existing building
In Residential – outer edge of well pad at least 300 feet from existing building
In Residential – all operations other than access roads, pipelines and security at
least 300 feet from existing building
Impoundments: Permitted – all zoning districts
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At least 300 feet from outer edge to existing building
Reasonable Development (§3304)(New)
Use/Distance Restrictions:
• Compressor Stations: Permitted – agricultural and industrial;
Conditional Use other districts
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Greater of 750 feet from existing building or 200 feet from property line, unless
waived
Noise: lesser of 60dBA at property line or Federal limit
• Processing Plants: Permitted – industrial; Conditional Use –
agricultural
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Greater of 750 feet from existing building or 200 feet from property line, unless
waived
Noise: lesser of 60dBA at property line or Federal limit
• Setbacks
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No greater than Chapters 32 and 33
No greater than other industrial uses
Reasonable Development (§3304)(New)
No Limits on Hours of Operation:
• Compressor stations
• Processing plants
• Well drilling
• Rig construction/disassembly
Reasonable Development (§3304)(New)
• Requires Uniform Regulation of:
o Construction activities
o Permanent facilities (height, screening, fencing, lighting, noise)
o Overweight vehicles
• Maximum Review Periods:
o 30 Days: Permitted Use
o 120 Days: Conditional Use
Process for Legal Challenges:
Prior Law
Zoning
Hearing
Board
Governing
Body
(Curative
Amendment)
Common Pleas Court
Pennsylvania Commonwealth Court
Pennsylvania Supreme Court
(not by right)
Process for Legal Challenges:
Act 13
Public Utility
Commission
Commonwealth
Court
Commonwealth
Court
Pennsylvania
Supreme Court
Pennsylvania
Supreme Court
(not by right)
(by right)
Penalty for Violation: Loss of Well Fees
Municipalities found to violate Act 13 shall not
receive any well fee funds until the ordinance
is amended, repealed or the order that
ordinance is unlawful is reversed on appeal
Act 13 Lawsuit
• Suit: By 7 municipalities/others challenging (primarily) local
ordinance provisions of Chapter 33.
Act 13 Lawsuit
July 26, 2012 Ruling (4-3 vote): Majority Opinion
• Holding: Requiring all oil and gas operations in all zoning districts,
including residential zoning districts, as a matter of law, violates
substantive due process because it:
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Allows incompatible uses in zoning districts;
Does not protect the interests of neighboring property owners from harm;
Alters the character of the neighborhood; and
Makes irrational classifications.
• Result: Permanently enjoined the Commonwealth from enforcing
Section 3304, and any remaining provisions of Chapter 33 which
enforce it.
Act 13 Lawsuit
July 26, 2012 Ruling (4-3 vote): Dissenting Opinion
• Natural resources exist where they are, without regard to any
municipality’s comprehensive plan.
• Section 3304 recognizes various forms of oil and gas operations, and
limits where and under what circumstances they may be allowed in a
particular zoning district.
• Bad planning does not itself render ordinance, or law, constitutionally
infirm.
• Conclusion: Section 3304 is a valid exercise of the police power and,
establishes zoning guidance to local municipalities that ensures uniform
and optimum development of oil and gas resources.
Act 13 Lawsuit: Current Status
• Appeals: By all parties
• Expedited Consideration: October 17 Argument
• Resolution?
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Blaine A. Lucas
Attorney at Law
[email protected]
Two Gateway Center
Pittsburgh, PA 15222
Direct 412.394.5657
Main 412.394.5400
Fax 412.586.1074
www.babstcalland.com