Litigation

The decision of the PA Supreme Court to invalidate large portions of the 2012 Act 13 Marcellus drilling law, particularly those portions dealing with zoning, have left much of the law–perhaps the entire law–in doubt. The court’s decision was like an explosion, and we’re just now seeing the mushroom cloud but haven’t felt the fallout just yet. Did the Supremes just destroy shale drilling in PA? Is their decision really no big deal? It all depends on whom you ask.

One thing that appears to be in jeopardy is the impact fee/tax that’s already raised over $400 million in the last two years. A lot of that fee gets distributed to the places impacted by drilling, hence its name. It’s a sensible fee notwithstanding our objection that 40% of it goes to politicians to spend in non-drilling parts of the state. However, high court’s decision throws the future of the impact fee into doubt. Last week Gov. Tom Corbett’s administration asked the Supreme Court to reconsider its decision and further clarify some issues in hopes the impact fee (among other things) can be retained…
Read More “PA’s Impact Fee in Jeopardy from Supreme Court’s Act 13 Decision”

Elections–and court cases–have consequences. You tax something more, you get less of it. You regulate something more, you get less of it. When there’s less of something, prices for it go up. Fitch Ratings–one of the largest and most prestigious rating agencies in the world–has just weighed in on the ruling by the PA Supreme Court that throws out portions of the Act 13 drilling law (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). According to Fitch, more local regulation of PA’s oil and gas drilling will result in less production. You don’t normally think of Fitch as being in the oil and gas production prediction game–that’s more the purview of the Energy Information Administration (EIA). However, Fitch says the recent PA ruling will almost certainly mean less production coming out of PA–a sobering observation.

Fitch’s opinion counts because investors make decisions based on it. Less gas, higher prices. It also means less tax money will flow to municipalities. Pretty simple economics and Fitch is just stating the obvious. Here’s what Fitch said earlier this week about the PA court decision…
Read More “Fitch Ratings Says PA Court Decision Translates to Less Production”

MDN reported the sad news on Friday that PA’s Supreme Court gutted big and important parts of the Act 13 legislation passed in early 2012 (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). The natural, follow-on question is, what does this decision mean for drillers and landowners? The honest answer is, in the short-term, not much. Until now we have lived under existing local/municipal zoning rules while the lawsuit worked its way through the court system. We remain under a crazy quilt patchwork of different rules for different towns. The drillers have, for the most part, learned to live with it and likely will continue doing so.

As MDN pointed out on Friday, there are some towns with boards packed with anti-drillers that will make drilling so miserable in that area (cough *Robinson* cough) drillers will likely just leave them alone–meaning landowners lose out, local businesses lose out, taxpayers will certainly lose out. Everyone’s a loser. But that’s the definition of victory for anti-drillers–everyone loses. So where do we go from here?…
Read More “What Does PA Supreme Court Decision on Act 13 Mean?”

No doubt most MDN readers have already heard the earth-shattering news from yesterday that Pennsylvania’s Supreme Court has sided with the seven towns who sued the state to retain their right to regulate (zone) where drilling and related activities can and cannot happen in their communities. MDN has long covered this story and worried that a split decision after one of the justices resigned would lead to an unresolved situation. As fate would have it, one of the Republicans on the bench, Chief Justice Ron Castille, sold out and turned against the industry, so it ended up being a 4-2 decision with (predictably) all three Democrats voting against the industry plus RINO Castille.

What was the decision? For different reasons (they couldn’t agree among themselves), the justices said localities should be able to write their own rules for where drilling can and can’t go. Which is certainly not a bad thing (the right to determine), except in some communities local town boards are packed with anti-drillers that make life a living hell for anyone or anything related to drilling. Ultimately innocent landowners and taxpayers are the ones who lose out because drillers will walk away from areas where unreasonable people pack town boards (no drilling, no leases, no jobs, no tax revenue). That’s exactly what will now start to happen in PA.

Anti-drilling groups like The Sierra Club, Delaware Riverkeeper and PennEnvironment were positively orgasmic in their reaction. They now get to kill drilling in at least some locations in PA. The Marcellus Shale Coalition said it’s a truly a sad day for PA. We agree. Below we bring you what we consider the “best of” coverage of the opinion. We have not had time to thoroughly research it ourselves, so we’ll rely on others to analyze it. We’ve also embedded the full 162-page decision filed by the Supreme Court so you can read it for yourself…
Read More “PA Supreme Court Rules Against State/Drillers in Act 13 Case”