Lawsuit May Provide Clarity on PA Environmental Rights Amendment

On May 9, 2014, the Pennsylvania Environmental Defense Foundation (PEDF) filed a petition in the Commonwealth Court of Pennsylvania seeking to enjoin Governor Corbett from proceeding by executive order to enable energy companies to conduct horizontal drilling on private lands adjacent to State parks and forest lands.  The PEDF filed the petition in a pending lawsuit it had filed in 2012.  The outcome of this case is important not only because it will examine the scope of the Governor’s authority to allow oil and gas operations that may impact state lands.  Commonwealth Court’s decision on the injunction and ultimately the lawsuit will further define the contours of the environmental rights amendment as government officials strive to balance their responsibilities to make prudent executive, administrative and financial decisions while honoring their duties as trustees of natural resources. 

On March 23, 2010, an attorney for the PEDF sent a letter to then Pennsylvania Governor Ed Rendell challenging the proposal to lease additional state forest land for oil and gas operations to use revenue to help with fiscal problems unrelated to protecting the State Forest system.  The PEDF argued that the leasing and use of the funds would violate Article I, Section 27 of the Pennsylvania Constitution, the environmental rights amendment, and that instead of leasing state lands Pennsylvania should impose a severance tax to raise revenue.  The letter placed Governor Rendell, as well as then Pennsylvania Attorney General Tom Corbett, on notice of the PEDF’s intent to file a lawsuit for violating the rights of the people and their responsibilities as trustees of public lands.  On October 26, 2010, Governor Rendell imposed a moratorium on further leasing after having leased about 130,000 acres of state forest land to gas companies.

The PEDF filed its lawsuit on March 6, 2012 against the Commonwealth of Pennsylvania and Governor Corbett seeking declaratory relief that the leasing of state lands and use of money for general purposes violated the environmental rights amendment and duties as trustee.  The parties skirmished through the filing of objections and amended pleadings throughout 2012 and 2013.  After the Pennsylvania Supreme Court issued its plurality decision in Robinson Township et al. v. Commonwealth of PA, in December 2013 finding Act 13 to be unconstitutional, the PEDF filed amended pleadings emphasizing its allegations that leasing state lands for oil and gas operations and using the funds for general fiscal matters violates the environmental rights amendment.  On May 9, 2014, the PEDF filed an application for a preliminary injunction seeking to block additional leasing.  Governor Corbett responded by issuing an executive order on May 23, 2014 authorizing leasing that would allow drilling under state forest and park land from adjacent private property but prohibiting any additional surface disturbance on state forest and state park lands.

Former Pennsylvania Department of Conservation and Natural Resources (DCNR) officials testified on behalf of the PEDF during hearings on the petition for injunctive relief.  Former DCNR Secretary John Quigley scolded his former boss, Governor Rendell, for leasing state forest lands and treating them like a “cash cow.”    On the other hand, James Grace, Chairman of DCNR’s natural gas advisory committee and former Director of the Bureau of Forestry during the Rendell administration, testified that he did not oppose drilling on state lands and acknowledged that the leases contain protocols and restrictions designed to protect the environment.  Mr. Grace endorsed DCNR’s efforts to evaluate the impacts of drilling on state lands such as the release of the “Shale-Gas Monitoring Report” in April 2014 and clarified he is more concerned about cumulative impacts.  A decision on the petition for injunction should be forthcoming.

Like the Robinson Township case (which is back before the Commonwealth Court) the PEDF lawsuit illustrates the difficulty government officials of both parties face when trying to balance the important interests of fiscal responsibility and environmental stewardship.  Therefore, while the Marcellus Shale play presents continuing opportunities for energy development and economic benefits for many, it also presents thorny legal and political issues that appear likely to continue to occupy the attention of courts, government leaders and NGOs for years to come.  This lawsuit provides an opportunity for the court to provide clarity on how Commonwealth officials can satisfy their executive responsibilities regarding revenues while honoring their duties as trustees of public resources.  Regardless of the outcome of any specific issue, clarity would be welcome by many of us who provide professional services to the energy sector.

Stephen Smith focuses his practice on environmental and energy-related matters including regulatory counseling and litigation, administrative law, governmental affairs and lobbying. He represents clients before federal and state courts and administrative agencies. He provides client counseling and advice on compliance, permitting and agency communications as well as business transactions.
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