Unconventional Well Regulations; Public Resource Definitions and Authority to Accept Comments

Marcellus Shale Coalition v. Dep’t of Environmental Protection, 193 A.3d 447 (Pa. Cmwlth. 2018), direct appeal, appeal docket 69 MAP 2021

Background

In 2016, the Environmental Quality Board (Board) published the Chapter 78a Regulations related to surface activities associated with the development of unconventional natural gas and oil wells. The Marcellus Shale Coalition (Coalition) filed a Petition for Review against the Board and the Department of Environmental Protection (DEP) (collectively, the Agencies) challenging the validity of the regulations. Commonwealth Court summarized the relevant portions of the regulations at issue as follows:

Section 78a.15(f) of the Chapter 78a Regulations, which sets forth application requirements, provides:

(f) An applicant proposing to drill a well at a location that may impact a public resource as provided in paragraph (1) shall notify the applicable public resource agency, if any, in accordance with paragraph (2). The applicant shall also provide the information in paragraph (3) to the Department in the well permit application.

(1) This subsection applies if the proposed limit of disturbance of the well site is located:

(i) In or within 200 feet of a publicly owned park, forest, game land or wildlife area.

(ii) In or within the corridor of a State or National scenic river.

(iii) Within 200 feet of a National natural landmark.

(iv) In a location that will impact other critical communities.

(v) Within 200 feet of a historical or archeological site listed on the Federal or State list of historic places.

(vi) Within 200 feet of common areas on a school’s property or a playground.

(vii) Within zones 1 or 2 of a wellhead protection area as part of a wellhead protection program approved under § 109.713 (relating to wellhead protection program).

(viii) Within 1,000 feet of a water well, surface water intake, reservoir or other water supply extraction point used by a water purveyor.

(2) The applicant shall notify the public resource agency responsible for managing the public resource identified in paragraph (1), if any. The applicant shall forward by certified mail a copy of the plat identifying the proposed limit of disturbance of the well site and information in paragraph (3) to the public resource agency at least 30 days prior to submitting its well permit application to the Department. The applicant shall submit proof of notification with the well permit application. From the date of notification, the public resource agency has 30 days to provide written comments to the Department and the applicant on the functions and uses of the public resource and the measures, if any, that the public resource agency recommends the Department consider to avoid, minimize or otherwise mitigate probable harmful impacts to the public resource where the well, well site and access road is located. The applicant may provide a response to the Department to the comments.

(3) The applicant shall include the following information in the well permit application on forms provided by the Department:

(i) An identification of the public resource.

(ii) A description of the functions and uses of the public resource.

(iii) A description of the measures proposed to be taken to avoid, minimize or otherwise mitigate impacts, if any.

(4) The information required under paragraph (3) shall be limited to the discrete area of the public resource that may be affected by the well, well site and access road.

25 Pa. Code § 78a.15(f) (emphasis added).

Section 78a.15(g), which guides the Department’s consideration, provides:

(g) The Department will consider the following prior to conditioning a well permit based on impacts to public resources:

(1) Compliance with all applicable statutes and regulations.

(2) The proposed measures to avoid, minimize or otherwise mitigate the impacts to public resources.

(3) Other measures necessary to protect against a probable harmful impact to the functions and uses of the public resource.

(4) The comments and recommendations submitted by public resource agencies, if any, and the applicant’s response, if any.

(5) The optimal development of the gas resources and the property rights of gas owners.

25 Pa. Code § 78a.15(g) (emphasis added).

The regulations define the following corresponding terms:

Common areas of a school’s property – An area on a school’s property accessible to the general public for recreational purposes. For the purposes of this definition, a school is a facility providing elementary, secondary or postsecondary educational services.

* * *

Other critical communities –

(i) Species of special concern identified on a [Pennsylvania Natural Diversity Inventory (PNDI)9] receipt, including plant or animal species:

(A) In a proposed status categorized as proposed endangered, proposed threatened, proposed rare or candidate.

(B) That are classified as rare or tentatively undetermined.

(ii) The term does not include threatened and endangered species.

* * *

Playground –

(i) An outdoor area provided to the general public for recreational purposes.

(ii) The term includes community-operated recreational facilities.

* * *

Public resource agency – An entity responsible for managing a public resource identified in § 78a.15(d) or (f)(1) (relating to application requirements) including the Department of Conservation and Natural Resources, the Fish and Boat Commission, the Game Commission, the United States Fish and Wildlife Service, the United States National Park Service, the United States Army Corps of Engineers, the United States Forest Service, counties, municipalities and playground owners.

25 Pa. Code § 78a.1 (emphasis added).

Slip op. at 5-9. The Coalition filed an Application for Partial Summary Relief as to (1) the validity of Section 78a.15(f) and (g) pertaining to public resources and the related definitions of “other critical communities,” “common areas of a school’s property,” “playground,” and “public resource agency” in Section 78a.1.4, and (2) Section 78a.15(g)’s requirement that the Department will consider comments and recommendations submitted by municipalities.

The Parties’ Arguments

As to Section 78a.15(f)(1)(iv)’s requirement to identify and provide information concerning “other critical communities” as defined in Section 78a.1, the Coalition argued that:

The term “other critical communities,” which was in the predecessor to Act 13, remained unchanged and undefined in Act 13. The regulations now define “other critical communities,” for the first time, to include any “species of special concern” as identified on a PNDI receipt. 25 Pa. Code § 78a.1. The phrase “species of special concern” is not contained within or authorized by Act 13. The special concern species provisions bypass the Documents Law’s formal notice and comment rulemaking process. In addition, the special concern species provisions violate the prohibition against special laws contained in Article III, Section 32 of the Pennsylvania Constitution and the Documents Law. Finally, the Coalition asserts that the Agencies lack jurisdiction over species of special concern; the PNDI receipt is managed by the Department of Conservation and Natural Resources (DCNR), not by the Agencies.

Slip op. at 29-30. The Agencies countered that:

…the broad scope of Act 13 supports protection of species of special concern. Section 3215(c) clearly intends to include more than simply “threatened” species. The term “threatened” has a particular legal meaning. The General Assembly chose not to use that term in Section 3215, and instead opted for the more expansive term of “other critical communities.” To conclude otherwise treats the phrase “other critical communities” as mere surplusage, which is contrary to the principles of statutory interpretation. Moreover, the regulatory definition of “other critical communities” manifests the Department’s past practices and policies and codifies the process used prior to the adoption of the regulation. Defining “other critical communities” as “species of special concern” does not create a special law prohibited by Article III, Section 32 of the Pennsylvania Constitution. Contrary to the Coalition’s assertions, the Public Resource Regulations do not treat the unconventional gas industry as a special class, i.e., the only earth-disturbance industry for which the Department considers impacts upon species other than those that are threatened or endangered. Other regulatory programs protect special concern species beyond those classified as threatened and endangered. Further, “species of special concern” does not violate the Documents Law because the General Assembly intended no such restraint on the consideration of public resources. Finally, although the Agencies may lack jurisdiction over the species of special concern, the Agencies are constitutionally and statutorily charged with protecting public resources.

Slip op. at 30-31.

The Coalition further argued that the definitions of “common areas of a school’s property” and “playground” exceed the scope of the statute by including purely private places that do not constitute public resources and that the regulatory additions to public resources are not of the same class or nature as the statutory items. The Agencies countered that:

…common areas of a school’s property and playgrounds share many of the inherent features as publicly-owned parks that make them public resources worthy of the Department’s consideration in the permitting process. Respondents’ Brief at 22. According to the Agencies, common areas of a school’s property and playgrounds are used by the general public for recreational purposes in a manner similar to how the general public uses publicly owned parks. Id. at 24. In other words, any area that the general public has access to for recreational purposes is a public resource that must be identified on a well permit application. Id. As the Agencies further explain, the definitions of “common areas of a school’s property” and “playground” make it clear that the impact on these areas is to be considered only when the general public has open access to them for recreational purposes. Id.

Slip op. at 51. As to the inclusion of “playground owners” in the definition of a “public resource agency,”  the Coalition argued that “playground owners” are not readily identifiable government entities such that their inclusion creates an unworkable standard and improperly elevates private entities to public status. Finally, the Coalition contended that Section 78a.15(g)’s requirement that the Department will consider comments and recommendations submitted by municipalities is contrary to Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013) (Robinson II) whereby the Pennsylvania Supreme Court declared Section 3215(d) of Act 13, 58 Pa. C.S. § 3215(d) – the statutory authorization for this regulatory provision – unconstitutional and enjoined its application and enforcement. The Agencies countered that Robinson II does not apply because the Supreme Court’s decision there was based on language that the Department “may” consider comments and recommendations submitted by public resource agencies at its discretion, which had the effect of marginalizing local input. Comparatively, the Agencies argued, Section 78a.15(g) provides that the Department “will” consider such comments.

Commonwealth Court Decision

Commonwealth Court partially granted the Coalition’s Application for summary relief by declaring the definitions of “other critical communities,” “common areas of a school’s property,” “playground,” and “public resource agency” in Section 78a.1.4 and Section 78a.15(g)’s requirement that the Department will consider comments and recommendations submitted by municipalities, as invalid.

The court held that the regulations’ use of “other critical communities” as including “species of special concern,” as listed on the database of a third party, PNDI, violates the Documents Law because they create a binding norm through a changing PNDI database that is not populated through notice and comment rulemaking procedures. The court further found that “the regulatory definitions of the terms ‘common areas of a school’s property’ and ‘playground’ are vague, overly broad, and unpredictable thereby making compliance unduly burdensome,” reasoning that:

“Common areas of a school’s property” or “playgrounds” do not share the same attributes as the other public resources identified in the statute because they do not implicate public interest in the same way. In other words, a McDonald’s playground or a school parking lot utilized as a playground are not of the same class or nature as a scenic river, public park, or historical site warranting Commonwealth trustee protection. Although common areas of a school’s property and playgrounds may share some recreational similarities with the statutory public resources, they do not implicate “public interest” in the same way and they are not part of the trust corpus over which the Commonwealth is charged with protecting under the Constitution. For these reasons, we declare that the regulatory definition of public resources to the extent it includes “common areas of a school’s property” and “playground” is void and unenforceable.

Slip op. at 53-54. The court also held that the use “playground owners” as a “public resource agency” is unlawful and unenforceable because playground owners are not government agencies and are not readily identifiable; therefore, requiring a well permit applicant to identify and notify playground owners is unduly burdensome and unreasonable. Commonwealth Court also found that the Department’s consideration of comments and recommendations submitted by municipalities as “public resource agencies,” as provided for in 25 Pa. Code § 78a.15(g), is unconstitutional and unenforceable because the Supreme Court’s decision in Robinson Township v. Commonwealth, 83 A.3d 901, 984, 1000 (Pa. 2013) invalidated Section 3215(d) of the 2012 Oil and Gas Act that provided the Department with the authority to promulgate such a regulation. The court explained:

Although Section 78a.15(g) appears to succeed where Section 3215(d) of Act 13 failed by providing that the Department “will” consider such comments and recommendations, because the Supreme Court enjoined application and enforcement of Section 3215(d), there is no statutory authority for the regulation. The Department cannot grant powers to municipalities that no statute provides. See Pennsylvania Association of Life Underwriters, 371 A.2d at 566 (“The power of … an agency to prescribe rules and regulations under a statute is only a power to adopt regulations to carry into effect the will of the Legislature as expressed by statute. Administrative agencies are not empowered to make rules and regulations which are violative of or exceed the powers given them by the statutes and the law, but must keep within the bounds of their statutory authority in the promulgation of general rules and orders.”). Despite their best intentions, courts may not rewrite a statute or insert words to make it conform to constitutional requirements. See Burke ex rel. Burke v. Independent Blue Cross, 628 Pa. 147, 103 A.3d 1267, 1274 (2014); Coppolino v. Noonan, 102 A.3d 1254, 1284 n.38 (Pa. Cmwlth. 2014), aff’d, 633 Pa. 445, 125 A.3d 1196 (2015). Thus, we are constrained to conclude that Section 78a.15(g)’s requirement that the Department will consider comments and recommendations submitted by municipalities fails absent statutory authority. See Pennsylvania Medical Society v. State Board of Medicine, 118 Pa.Cmwlth. 635, 546 A.2d 720, 723 (1988) (regulation that exceeded statutory authority declared void and unenforceable).

Slip op. at 58.

The Agencies appealed to the Supreme Court.

 

For more information, contact Kevin McKeon or Dennis Whitaker.