Business requires some level of regulatory certainty to be successful. Shifting rules and patchwork guidelines create costly and time-consuming challenges for entrepreneurs who have enough to worry about with the rigors of the free market.
Last week, the Pennsylvania state Supreme Court threw the Marcellus Shale gas drilling industry into the ultimate regulatory maelstrom with its 4-2 decision to throw out parts of Act 13, the Commonwealth’s comprehensive oil and gas industry regulation.
One critical part of the court’s decision gives municipal governments primacy over state regulations on drilling, meaning each town can adopt its own set of zoning rules for the industry. That’s a regulatory morass for the industry, but one they’ve had to adjust to anyway while the case was working its way through the courts.
Marcellus Drilling News, an industry newsletter, said, “there are some towns with boards packed with anti-drillers that will make drilling so miserable in that area… that drillers will likely just leave them alone. Landowners lose out, local businesses lose out and taxpayers will certainly lose out.”
But those who have been fighting to preserve local control and limit drilling are hailing the court’s decision. The Pittsburgh Post-Gazette quotes Deron Gabriel, Commission President of South Fayette in Allegheny County, as saying it’s a victory.
“Preserving zoning is vital to local planning efforts in order to keep industrial activity out of residential and commercial areas,” Gabriel told the Post-Gazette. “Now we can keep industrial activities away from our schools and residences, and there has been more and more of a push to locate closer to residential areas.”
It’s possible that the Pennsylvania Legislature overreached last year with Act 13, setting up a push back from communities that are justifiably concerned about heavy industrial activity in their areas. However, now the pendulum could swing back too far the other way, as drilling opponents use the decision to try to drive the industry out of the state.
In West Virginia, we have some of the same fights over drilling, but we have managed to avoid the kind of regulatory confusion they’re having in Pennsylvania. In 2011, the Legislature passed a comprehensive gas drilling law that provides consistency for drillers, but also protections for citizens and property owners.
When the City of Morgantown passed an ordinance banning hydraulic fracturing within one mile of the city limits, Monongalia County Circuit Court Judge Susan Tucker wisely struck it down. The Judge determined that a municipality could not adopt an ordinance that trumped the regulatory authority of the state Division of Environmental Protection.
Drillers in Pennsylvania may be able to maneuver their way through myriad regulations left in place (and soon to be expanded thanks to the state Supreme Court’s decision). After all, drillers are going to follow the gas.
However, some of those operations may look now to West Virginia, which also sits on top of giant Marcellus Shale reserves. At least here, they know what the rules are.