PA Supreme Court Rules on Gorsline Zoning Case – Mixed Decision

Not long after the Pennsylvania legislature passed the Act 13 Marcellus Shale drilling law in 2012, signed into law by then-Gov. Tom Corbett, seven selfish towns sued, claiming they should have the right (via zoning laws) to determine just where an oil and gas well can be located within their borders. The challenge was brought by rabid anti-drillers and appealed all the way to the PA Supreme Court, where unfortunately the antis won (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). What the antis didn’t think about was the fact some towns may decide to exercise their newly-won rights to allow wells, instead of prohibit them. Whoops. Guess they didn’t see that one coming. A town in Lycoming County decided to allow a shale well on property zoned residential/agricultural (i.e. farming country) by using a “conditional use” permit. Anti-drilling Big Green groups, including PennFuture, THE (arrogant) Delaware Riverkeeper, and the Peters Township gang (none of which are from mid-PA where the town is located) sued to deny the town the right to exercise its Act 13 authority to allow a shale well. The case, Brian Gorsline v. Board of Supervisors of Fairfield Township (Gorsline is an avowed anti-driller), was appealed to the PA Supreme Court and in March 2017 (over a year ago!) the Supremes heard oral arguments (see Gorsline Zoning Case Argued Before PA Supreme Court Justices). Last Friday the Supremes came down from Mt. Olympus to issue their ruling–and they ruled (4-3) against the town and for the antis. However, before you jump to any conclusions and before you believe headlines from Big Green supporters trumpeting their “victory,” you need to know this: the decision potentially makes it harder (not easier) for antis to stop drilling in the future. We’ll explain…
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DEP: No Contamination from 63K Gal. Inflection Energy Brine Spill

Around 63,000 gallons of treated brine (naturally occurring, very “salty” water that comes out of a well long after it’s drilled) spilled in an accident at an Inflection Energy well pad in Eldred Township, Lycoming County, PA in mid-November (see 63K Gal. Brine Spill at Inflection Well Pad in Lycoming County). Inflection blamed a contractor and operator error for the spill, which happened after an already-full tank was overfilled. Some of the brine reached a nearby unnamed creek that flows into the Loyalsock Creek. In a followup to that story, tests done since the spill on eight private water wells close to the Inflection well pad show no contamination. Zero. We’re still waiting on test results for four other wells. The tanks holding the brine (that overflowed) have been removed from the well pad. No contamination was found in the Loyalsock or in the Susquehanna River, which the Loyalsock empties into. It’s never a good thing to have a spill like this, but the good news is that there is no lasting environmental impact from it. Here’s an update on the November spill and its cleanup…
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63K Gal. Brine Spill at Inflection Well Pad in Lycoming County

Approximately 63,000 gallons of treated brine (naturally occurring, very “salty” water that comes out of a well long after it’s drilled) spilled in an accident at an Inflection Energy well pad in Eldred Township, Lycoming County, PA, on Monday. Inflection blames a contractor and operator error for the spill, which happened after an already-full tank was overfilled. Some of the brine (no word on how much) reached a nearby unnamed creek that flows into the Loyalsock Creek. However, testing done on the Loyalsock shows no presence of contamination. The Loyalsock flows into the Susquehanna River, and the Susquehanna is used as a public drinking water source–hence the concern. There are no warnings to public drinking water operations along the Susquehanna because there is no problem to report. Now comes an investigation, and no doubt fines, for the accident. Here’s what we’re able to find out about the episode–an occurrence so rare it’s newsworthy when it happens…
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Big Stakes: Gorsline Zoning Case Goes to PA Supreme Court

theyre backGuess who’s back with a case now before the Pennsylvania Supreme Court? Yep, the odious nutters from Big Green Groups PennFuture, THE (arrogant) Delaware Riverkeeper, and the Peters Township gang. You may recall we reported last September of the humiliating defeat suffered by these groups in the “Gorsline” case (see Major Victory for PA Landowners/Drillers in Lycoming County Case). It was a Lycoming County zoning case before the Pennsylvania Commonwealth Court. In Gorsline v. Board of Supervisors of Fairfield Township, anti-drilling neighbors, including Brian and Dawn Gorsline, Paul and Michele Batkowski and others (collectively “Gorsline”) sued to stop a conditional use permit granted by Fairfield Township to allow Inflection Energy to construct a well pad on the property of Donald and Eleanor Shaheen. The case was weak, but the lowest court in the PA court system–the Court of Common Pleas (i.e. county court)–said the ninny nanny neighbors had a right to strip away the Shaheen’s property rights to allow drilling on their own property. The PA Commonwealth Court obliterated the faulty reasoning of the lower court and, significantly, redefined how courts should interpret the results of the Act 13 zoning lawsuit that allows local municipalities the right to restrict shale drilling. Unfortunately the matter won’t rest there. The Pennsylvania Supreme Court has taken up the Gorsline case on appeal. The PA Supreme Court has a 5-2 majority of left-leaning Democrats. Below we have a copy of the brief filed by PennFuture on behalf of the ninny nanny Gorslines, along with “friend of the court” briefs filed by THE Delaware Riverkeeper and Peters Township. Folks, this is a dangerous case the for drilling industry… Continue reading

Inflection Energy Defeats Delaware Riverkeeper in Lycoming Co.

It doesn’t happen often enough, which is why we make a big deal of it when it does: An energy company (in this case Inflection Energy) completely, utterly, and humiliatingly defeated THE Delaware Riverkeeper in an important court case in Lycoming County, PA. Less than a month ago we brought you the news that a Lycoming County judge had told an anti-driller, backed by Delaware Riverkeeper and Riverkeeper attorney Jordan Yeager, that the case they had filed to prevent Inflection Energy from drilling a legally permitted well was frivolous. The judge said he would allow the case to go forward, but only if the anti (and Riverkeeper) put up big bucks as collateral for the eventuality that they would likely lose (see PA Judge to Antis Seeking Drilling Delay: Put Up $5.69M or Shut Up). Turns out making these sleazeballs put their money where their mouth is, is good medicine. Riverkeeper and its “client” (the local anti-driller) have bowed out. The case is now closed and can’t be re-opened–and it sets a precedent for similar cases. In other words, the good guys won this time!…
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PA Judge to Antis Seeking Drilling Delay: Put Up $5.69M or Shut Up

Gavel-falling.jpgHere’s a story we LOVE bringing you. A Pennsylvania county judge, Senior Judge Brendan J. Vanston (Lycoming County), has just told an anti-driller to put up or shut up. Inflection Energy had been legally permitted to begin drilling a well in Loyalsock Township in Lycoming County. As they so often do, an anti-driller objected, filing an appeal to stop the drilling in an attempt to delay it by (ab)using the courts. The judge said, in essence, “OK, if you want to play this game, you need to put up $5.69 million as a bond–money you will lose if you don’t prove your frivolous case.” We predict the case will quickly disappear and Inflection will begin drilling…
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US Circuit Court: NY Landowners Released from Marcellus Leases

court gavelThe U.S. Court of Appeals for the Second Circuit, located in New York State, released a decision yesterday in a case known as Beardslee v. Inflection Energy, LLC (copy of the decision is embedded below) that may create problems for future shale drilling in New York State–should the existing statewide ban ever be lifted. Yesterday’s decision is good news for landowners in one sense–it officially upholds the right of Tioga County, NY landowners party to the lawsuit to be released from old leases made in pre-Marcellus days when landowners signed leases for $3 per acre. Those leases were signed before the words “Marcellus” or “Utica” meant anything other than municipalities in New York State. (Interesting factoid: both shale plays are named after the NY towns where they were first identified. Further interesting factoid: both Marcellus, NY and Utica, NY banned fracking before the statewide ban was official.) The Second Circuit upheld a previous decision which we first wrote about in 2012 (see Judge Rules Against Chesapeake, Inflection in NY Lease Case), a decision appealed to NY’s highest court that upheld it (see NY High Court Decision Creates Toxic Environment for O&G Companies). The energy companies then appealed the decision to U.S. District Court, where they have now lost. The ultimate issue at the core of this case is whether or not New York’s government action in disallowing fracking of shale wells should be considered a “force majeure” event that extends a lease beyond the initial term. It is the one issue the none of the courts ever directly answered, including the Second Circuit…
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NY High Court Decision Creates Toxic Environment for O&G Companies

court gavelA court case decided earlier this week by New York’s Court of Appeals (NY’s highest court), will, in our opinion, have a profoundly negative effect on oil and gas development in the state, forever. Or until another court case overturns it (which seems very unlikely). The case, as its core, is about the question of whether or not state action or inaction constitutes an extraordinary action, in essence an Act of God outside of the control of parties who sign a contract. Years ago landowners signed leases to allow oil and gas drilling, often for a few bucks and acre, long before Marcellus and fracking were common, household words. Then came delay after delay in New York–from the governor–and eventually a more or less semi-permanent ban on fracking. Energy companies argued that the leases they had signed could be extended until the day they are allowed to drill in the Marcellus because of “force majeure”–the concept that due to circumstances beyond our control we could not drill as we intended during the original term of the lease, usually five years. The NY Court of Appeals on Tuesday decided that the state preventing drilling does not qualify as force majeure after the original five-year period of a lease (full copy of the decision below). If the original lease was extended for some reason and then the driller was prevented from drilling during the extended time due to state laws preventing it, it’s not force majeure in the eyes of the “wise” justices in Albany…
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Bad PA Supreme Court Act 13 Decision Comes Home to Roost

The anti-drilling spin machine is in full cycle from the virulent anti-drilling group PennFuture. They’re hoping you won’t notice what we’re about to point out: the rank hypocrisy of a court decision last Friday. PennFuture is out with a press release that’s all peaches and cream, butterflies and unicorns that a (low) county court in Lycoming County has tossed out a drilling permit reviewed and allowed by Fairfield Township against Inflection Energy and landowners Donald and Eleanor Shaheen. PennFuture is billing it as the first test of the PA Supreme Court’s decision to allow local towns to create their own oil and gas zoning ordinances (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). “But, wait a minute!” (you may say), “The Supreme Court said towns can do as they please, right?” Right. “The town decided the well pad was OK, so what’s the deal?” Good question…
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More on the NY Force Majeure Ruling Against Chesapeake

MDN headlined a story yesterday about last week’s decision by a federal judge that went in favor of landowners and against Chesapeake Energy and Inflection Energy. The case found that Chesapeake and Inflection could not use the legal clause in their signed leases called “force majeure” to extend previously signed leases beyond the original 10-year term (see this MDN story for background).

One of the lead attorneys who brought the case on behalf of New York landowners is Scott Kurkoski, from the Vestal, NY law firm Levene, Gouldin & Thompson, LLP. Scott sent along a statement (below) along with a copy of the judge’s decision (also below).

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Judge Rules Against Chesapeake, Inflection in NY Lease Case

gavelAn important court case has ruled in favor of landowners against energy companies in New York State. Last Thursday, U.S. District Court Judge David Hurd ruled against Chesapeake Energy and Inflection Energy (and in favor of landowners) in a case where the companies had tried to extend leases beyond the original term by invoking “force majeure,” a legal phrase that means the terms of the lease could not be carried out due to extenuating circumstances.

Chesapeake and Inflection had argued that New York State’s moratorium on hydraulic fracturing of shale meant they could not drill on New York land for which they hold leases. But as with many things legal, the story is not so simple…

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Bregal Invests Undisclosed Amount in Inflection Energy

Bregal Energy announced yesterday they have increased their investment in Inflection Energy. Inflection was founded in 2008 as a drilling company focused on the Marcellus Shale. They hold leases in both Pennsylvania and New York. Bregal is an investment company focused on the energy industry. The amount of the new investment and the terms of the deal were not disclosed in the press announcement.

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NY Landowners Sue Inflection Energy over Force Majeure

force majeureA group of 18 Tioga County, NY landowners have sued Inflection Energy to overturn Inflection’s “force majeure” claim to extend the lease on their collective 1,200 acres. A force majeure clause is written into most gas lease contracts. It means a driller can automatically extend the length of the lease if there are unforeseen events that hinder the terms of the contract—in this case commencement of drilling—from happening.

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Broome County NY Landowners Receive Money to Stay in Lease

At least one energy firm has voted with its pocketbook that drilling will come, eventually, to New York State. Inflection Energy has just paid landowners in the Town of Maine (Broome County), NY $1,000 per acre to not bail out of the previous deal they signed.

In 2010, Inflection signed a deal that Maine landowners would receive a $6,000 per acre signing bonus over eight years plus 20 percent royalties. The initial payment was $1,000 per acre, the rest due after New York starts issuing permits for drilling. Problem is, those permits have not been issued and under the terms of the deal, landowners would have the right to vacate their leases and find a better deal later. So to keep them in the deal until permits are finally forthcoming, Inflection paid an additional $1,000 per acre (one-time payout) stipulating the landowners will not cancel their leases.

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Windsor, NY Landowners Receive $2,750 per Acre and 18 Percent Royalties in Lease Deal with Inflection Energy

Earlier this year, a group of 40 Town of Windsor (NY) landowners with a cumulative 3,000 acres signed a gas lease agreement with Denver-based Inflection Energy to allow Marcellus Shale drilling when New York’s moratorium is eventually lifted. The landowners expected their signing bonus checks by March 3rd, but that didn’t happen due to delays by the lawyers (see MDN story here). The delays are now over the the Windsor landowners have started receiving their bonus checks totaling $8.25 million.

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Infection Energy Delays Signing Bonus Payments for Landowners in Windsor, NY Area

Last year some 40 landowners separated from the Windsor & Colesville Oil and Gas Lease Coalition to sign a deal to lease their land to Inflection Energy. Collectively the breakaway group holds about 3,000 acres. The rest of the coalition decided against signing in hopes of a better deal once drilling is allowed to begin in New York. The deal signed with Inflection was supposed to yield a signing bonus of $2,750 per acre, due to landowners by March 3rd. But that payment did not happen.

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