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Sen. Mary Jo White Calls Permit Policy For Gas Wells On DCNR Lands Ill-Conceived, Illegal
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In a letter to Gov. Rendell this week, Sen. Mary Jo White (R-Venango), Majority Chair of the Senate Environmental Resources and Energy Committee, called the new policy announced by the Department of Environmental Protection last week on permitting natural gas wells on State Park and State Forest lands "ill-conceived, most likely illegal and could potentially cost Pennsylvania taxpayers tens of millions of dollars."

            The new policy requires well operators to identify all areas of a tract that will be disturbed by development activities. The Department of Conservation and Natural Resources will delineate, with assistance from the well operator, any areas of concern and recommend measures to minimize the impacts.
            The impacts to be considered include: threatened and endangered species habitat; wildlife corridors; water resources; scenic viewsheds; public recreation areas; wetlands and floodplains; high-value trees and regeneration areas; avoiding steep slopes; pathways for invasive species; air quality; noise; and road placement and construction methods.
            After coordinating with DCNR, the well operator will submit the DCNR Environmental Review to DEP as part of a well permit application. An application that does not include sufficient information to allow DEP to consider the impacts on state park and forest lands will be considered incomplete.
            "No one disputes both the desire and the statutory mandate of ensuring that oil and gas wells are designed, constructed and operated in a responsible manner that protects the environment," said Sen. White.  "This is true regardless of whether the proposed development is located on publicly owned property.  However, doing so must occur in concert with laws which have been enacted, and regulations which have been promulgated within the scope of the enabling legislation and according to the Regulatory Review Act.  
            "The regulatory review process allows for both public input and legal review to ensure that the proposed policy goals are appropriate and permitted.  Both of these critical elements are circumvented by unilaterally imposing a policy that seeks to significantly alter the criteria for the Department of Environmental Protection (DEP) to approve or deny a drilling permit.
            "In fact, Section 201 (e) of the Oil and Gas Act is clear in its delineation of five reasons why DEP may deny a drilling permit.  This policy seeks to add a new rationale for denying a permit, one which is not authorized by the Act."
            Sen. White also raises a concern about the new policy impairing the right to develop mineral rights under State Parks not owned by the Commonwealth and adding a new condition to existing mineral leases already signed by the state.
            "This new policy may very well impair these contracts, by authorizing DCNR to impose new conditions on permits that the lessee never envisioned and which may have discouraged the lessee from bidding on or signing the lease offering," Sen. White wrote.  "Simply put, this new policy has resulted in the imposition of new conditions on the lessee which are not mandated by law and which have not been negotiated.  Doing so very well may result in a lessee suing the Commonwealth for breach of contract, resulting in the return of the lease bonus payments and, potentially, associated costs and damages.
            "This new policy is especially troubling because it blatantly disregards the Pennsylvania Supreme Court’s ruling of April 2009," said Sen. White.  "In that case, Belden & Blake Corporation v. DCNR, the Commonwealth was prohibited from its efforts to impose surface use agreements and drilling conditions on permit applicants who owned the subsurface mineral rights underlying state park land.  The Supreme Court held that DCNR “may seek conditions like any other surface owner, even additional conditions consistent with its statutorily imposed duties” [emphasis added]."
            Sen. White concluded by saying, "DEP has done a good job of working to ensure that natural gas is developed responsibly, and DCNR has negotiated and executed lease agreements which contain meaningful added protections for publicly-owned lands.  However, if there is justification for additional conditions on natural gas production, these conditions must be adopted by statute or regulation, and must adhere to settled case law.  For these reasons, I encourage you to rescind this policy immediately so as to minimize the legal and financial ramifications the Commonwealth and its citizens now face."
            A copy of the letter is available online.

11/8/2010

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