The energy industry and policy makers in Pennsylvania, the heart of the nation’s gas drilling boom, are thinking about their next moves after the state’s highest court threw out significant portions of a law that limited the power of cities and counties to regulate the industry.
The state Supreme Court voted 4-2 on Thursday to strike down portions of a 2012 law that had been crafted by Gov. Tom Corbett and his industry-friendly allies in the Legislature.
Republican leaders in the General Assembly said the decision raised more questions than it answered and could damage the growing industry. They said they were not sure what the ruling would mean for the millions in impact fees being collected under the law.
Pennsylvania has over the past five years seen a boom in drilling and related industries rushing to exploit the deposits in the rock formation known as the Marcellus Shale, which lies deep underneath several Eastern states.
The high court’s decision comes as the energy industry is increasingly able to harvest oil and gas from those previously unreachable formations and, as a result, is bumping up against suburban and urban expectations of land use in states including Texas, Colorado and Ohio, where a similar legal challenge is underway.
The court majority said the law violated the state constitution, although they issued different opinions about why.
Seven municipalities had challenged the law that grew out of the state’s need to modernize 20-year-old drilling laws to account for a Marcellus Shale drilling boom made possible by innovations in technology, most notably horizontal drilling and hydraulic fracturing. The process, called fracking, has drawn widespread criticism from environmentalists and many residents living near drilling operations.
“Few could seriously dispute how remarkable a revolution is worked by this legislation upon the existing zoning regimen in Pennsylvania, including residential zones,” wrote Chief Justice Ron Castille.
After the industry began descending on the Marcellus Shale in earnest in 2008, state Supreme Court decisions expanded the legal gray area surrounding the extent of municipal authority over the operation and location of oil and gas wells, critics of the decisions say. Some companies complained that municipalities, mostly in southwestern Pennsylvania, had tried to use zoning rules to unreasonably limit drilling.
As a result, many in the industry made it a top priority to secure a law that eliminated any municipal authority over how drilling companies could operate.
Corbett took office in 2011 and backed the industry, believing that a 1984 state law had intended to do that anyway.
Colorado and Ohio have recently passed such laws.