Litigation 150 - Marcellus Drilling News

Driller Sues NY Town to Challenge Local Drilling Ban

September 15, 2011September 15, 2011

judge's gavel Anschutz Exploration this week will file a lawsuit against the Town of Dryden (NY) to strike down the town’s recently passed ban on gas drilling. Dryden is a small township with two villages—Dryden and Freeville—located in Tompkins County, near Ithaca. Its land area is 94.2 square miles with some 13,500 people living there.

In New York, the state reserves the right to regulate the oil and gas industry and, according to state law, local municipalities are restricted to regulating road use with respect to oil and gas drilling. Dryden’s measure banning drilling (passed in August) is, according to the drilling industry, illegal. This lawsuit will challenge it.

Dryden officials argue that the state does not and cannot tell a municipality how it can regulate other industries, and the gas industry should be no different. It is a classical constitutional issue and both sides are watching this one closely.

Range Resources Fights PA Town Ordinance, Threatens Lawsuit

August 17, 2011August 17, 2011

Range Resources, one of the largest Marcellus Shale drillers in Pennsylvania, and the first to sink a Marcellus well in the state in 2003, is pushing back against what it calls “death by a thousand paper cuts” – townships imposing their own regulations on drilling that result in a de facto ban on drilling. Range has just filed an appeal with the zoning hearing board in South Fayette (Allegheny County), PA challenging the township’s zoning regulations prohibiting drilling. Range says if the hearing board does not reverse course, it will take the township to court. A copy of Range’s 35-page challenge filed with the hearing board is embedded below.

UPDATE: Also embedded below is a full copy of the drilling ordinance passed by South Fayette Township in 2010. Thank you to MDN reader Josh Whetzel for suggesting we include it with this article.

Morgantown Official Backpedals After Drilling Ban Overturned

August 16, 2011August 16, 2011

It’s always interesting to watch politicians operate after a humiliating defeat. Politicians’ DNA does not allow them to simply look inward and recognize their own errors. They always look outward and blame others, or in some cases, declare the defeat was a good thing and accomplished just what they wanted all along! I refer to the situation in Morgantown, WV. In June, Morgantown City Council members voted to ban hydraulic fracturing both inside and up to one mile outside their borders (see this MDN story). This threatened a pair of Marcellus Shale wells being drilled about a mile from city lines. The result? The driller, Northeast Energy, sued the city. Last week a judge overturned the city’s ban and now hydraulic fracturing will commence (see this MDN story). All told, Northeast probably lost about a month out of their original drilling schedule (they continued drilling anyway, the ban specifically prohibited fracking and not drilling per se).

Judge Overturns Morgantown, WV Fracking Ban

August 15, 2011August 15, 2011

Gavel falling For some time now, MDN has covered the hydraulic fracturing ban passed by the city of Morgantown, West Virginia (see list of articles here). In a surprise move last Friday, the Monongalia County (WV) Circuit Court Judge Susan Tucker overturned Morgantown’s fracking ban, clearing the way for Northeast Energy to continue drilling and fracking operations about a mile outside of Morgantown city lines. Judge Tucker’s “summary judgment” is embedded below.

Chesapeake Threatens NY with Lawsuit on State Land Leases

August 8, 2011August 8, 2011

The New York Department of Environmental Conservation (DEC) leased 19,000 acres of state forestland to Chesapeake Energy and Fortuna Energy (now Talisman Energy) in 2006 to allow gas drilling. The deal provided state coffers with $9 million and the promise of 12.5 percent royalties on any gas produced. Those leases are due to expire Nov. 15 of this year, but Chesapeake has let the DEC know it believes the leases for its share (15,472 acres) should be extended, a legal phrase called force majeure, because of the moratorium that has been in place since 2008 on hydraulically fractured gas drilling. In a letter to the DEC, Chesapeake implied they will sue the state to extend the lease agreements if the state does not willingly agree to an extension.

Industrywide Issues | Litigation | New York | Statewide NY

New Lawsuit Filed in NY Federal Court Attempts to Delay/Prevent Gas Drilling in the Delaware River Basin

August 5, 2011August 5, 2011

lawsuit Those opposed to Marcellus drilling in New York and Pennsylvania continue to use the court system in an attempt to either delay or outright ban drilling. The latest instance came just yesterday with a lawsuit filed in federal court in New York:

Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Statewide NY

Federal Government Asks Judge to Dismiss NY Attorney General’s Fracking Lawsuit

August 3, 2011August 3, 2011

Eric Schneiderman On May 31 of this year, NY Attorney General Eric T. Schneiderman filed a lawsuit in federal court seeking to force the federal government “to commit to a full environmental review of proposed regulations that would allow natural gas drilling – including the potentially harmful "fracking" technique – in the Delaware River Basin” (see MDN’s initial coverage here). That is, AG Schneiderman is attempting to use the court system to delay, and if possible prevent, Marcellus Shale drilling in New York by forcing the federal government to launch a multi-year review of hydraulic fracturing in the Delaware River Basin. He bases his lawsuit on the foundation that the Delaware River Basin Commission, a quasi-governmental body, is about to allow drilling in the areas it oversees, including sensitive New York City watershed areas.

According to the federal government, AG Schneiderman does not have a legal foot to stand on with his lawsuit:

Some Drillers Using Questionable Tactics to Hold Land Under Lease Beyond Original Term

July 25, 2011July 25, 2011

A number of landowners in Pennsylvania signed gas leases with energy companies more than five years ago for very low amounts—$2 per acre in some cases—as a signing bonus. Landowners, realizing that a contract is a contract, waited patiently for the expiration of the lease—typically five years. But then, at the last possible moment, sometimes just hours before the lease is due to expire, the energy company would clear a few trees or park a bulldozer on the land in order to comply with the terms of lease, thereby extending the lease indefinitely because they had “made an effort” to start drilling.

Case in point: Dave and Karen Beinlich. They signed a lease for $2 an acre, for a grand total of $234 signing bonus on their 117 acre farm.

Anti-Drilling Group PennFuture Sues Ultra Resources Claiming Air Pollution from Gas Wells, Compressor Stations and Pipelines

July 22, 2011July 21, 2011

Anti-drilling group PennFuture is suing driller Ultra Resources claiming they are causing air pollution from almost all of their operations. A copy of the lawsuit filed in U.S. District Court for the Middle District of Pennsylvania is embedded below.

Allegheny County | Industrywide Issues | Litigation | Pennsylvania | Wastewater

PA Environmentalist Groups Try to Make a Federal Case Against McKeesport Sewage Treatment Plant over Marcellus Wastewater

July 20, 2011July 20, 2011

Two activist environmental organizations, Clean Water Action and Three Rivers Waterkeeper, are attempting to make a federal case against the McKeesport (Allegheny County) municipal sewage treatment plant that in the past has accepted hydraulic fracturing wastewater because the plant won’t categorically commit to never accepting fracking wastewater again. Here’s the very confusing setup from the Pittsburgh Post-Gazette:

Landowners in Westmoreland County, PA Reach Settlement with Rex Energy for Contract Breach & Non-Payment

July 19, 2011July 19, 2011

A group of 230 landowners in Westmoreland County, PA have settled a longstanding dispute with Marcellus drilling company Rex Energy. Landowners say they were approached by Rex representatives in 2007 and 2008 to sign leases, and they did sign, but then never received the promised payments. Lawyers charged that Rex was signing as many people as possible in a bid to make it look as though they controlled a significant amount of land in the area to impress investors. Rex claims they never countersigned some leases and therefore did not owe money for those leases.

After two years of litigation, an out-of-court settlement has finally been reached.

Drilling Company Sues Morgantown, WV for $42 Million in Lost Investment & Lost Future Revenue

July 8, 2011July 8, 2011

Another chapter in the ongoing saga of Morgantown, WV. For those who have not followed the story, Morgantown city council members took it upon themselves to ban hydraulic fracturing outside of the city limits—up to one mile—which they say is allowable under a West Virginia law that grants cities the right to exceed their boundaries in certain circumstances. The council members are concerned that two Marcellus gas wells that will be hydraulically fractured are too close to the city’s water supply and the risks are too great.

The drilling company, Northeast Energy, says the state DEP issued permits for those two wells and that Northeast has worked with the city every step of the way to ensure there will be no problems, and that the city at the last minute changed their tune. Northeast has sued to overturn Morgantown’s ban, and if that doesn’t work, they want compensation not only for their lost investment, but also for potential lost revenue.

Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PA DEP Settles Lawsuit by Chesapeake Bay Foundation – Slows Down Drilling Permit Process in Some Areas

July 8, 2011July 8, 2011

The permitting process for some (many?) Marcellus Shale gas wells in Pennsylvania will take longer than it previously did because of a lawsuit brought by the Chesapeake Bay Foundation against the PA Department of Environmental Protection (DEP). The DEP has just settled the lawsuit agreeing to more stringent guidelines for granting drilling permits near “pristine” mountain streams.

WV Marcellus Legal Battle over Well Pads: Surface Rights Owners v. Mineral Rights Owners

July 5, 2011July 5, 2011

In West Virginia, mineral rights are more complex than in other states because those rights in many (perhaps most) cases were separated from the land above it long ago due to coal mining. It is a situation that sometimes pits the rights of the surface owners of the land against the rights of those who own the mineral rights below the land. Mineral rights owners have a right to access the surface in order to extract the coal, oil or gas beneath.

But in the case of horizontal hydraulic fracturing, do mineral rights owners have the right to to set up a multi-acre well pad on the surface to extract natural gas from neighboring properties? An interesting legal question that is being played out in Marion County, WV now.

Driller Sues Morgantown, WV Over Fracking Ban, Monongalia County Considers Suing the City Too

June 30, 2011June 30, 2011

As MDN previously observed and predicted, the city of Morgantown, WV is now in court over the vote by city council members to ban Marcellus drilling both inside and outside of its borders—up to one mile outside.

NY Attorney General Sues the Federal Government Over Fracking

June 1, 2011June 1, 2011

In an attempt to stop Marcellus Shale drilling in New York by using the court system, NY Attorney General Eric T. Schneiderman announced on Tuesday that he is suing the federal government “to commit to a full environmental review of proposed regulations that would allow natural gas drilling – including the potentially harmful "fracking" technique – in the Delaware River Basin.” AG Schneiderman made his initial threat last month (see MDN’s coverage here). The AG’s announcement seems timed to coincide with a hearing set for today by the Delaware River Basin Commission to consider an application to withdraw water for drilling purposes.

The press statement from the AG’s office (full text below) contains unsubstantiated allegations that fracking poses risks and threats to the environment—the same recitation of inaccurate claims we’ve heard time and again from those who seek an outright ban on gas drilling. It also presumes it is the federal government’s role to regulate drilling—which under current law, it is not. Those who oppose drilling seek to regulate it using the “back door” of the Safe Drinking Water Act (SDWA), the National Environmental Policy Act (NEPA) and other federal laws. This lawsuit seeks to push a federal takeover of drilling by regulating and controlling it at the federal level.