On November 8, 2016, the Pennsylvania Commonwealth Court issued an opinion (78a Injunction) enjoining eight provisions (or portions thereof) of the newly-promulgated unconventional oil and natural gas regulations found at 25 Pa. Code Chapter 78a (Chapter 78a). The effected provisions relate to the Pennsylvania Department of Environmental Protection’s (DEP) regulation of so-called public resources, area of review monitoring and remediation requirements, onsite processing, impoundments and site restoration. Relying largely upon the possible harms to the industry while it reviews MSC’s lawsuit challenging certain provisions contained in Chapter 78a, the Commonwealth Court’s injunction precludes DEP from enforcing certain Chapter 78a provisions until it issues a later ruling on the legality of those and other provisions. The injunction represents a victory for the Marcellus Shale Coalition (MSC) and the natural gas industry, which have voiced significant concerns impact of the challenged regulations on industry operations.
On October 14, MSC filed a petition for declaratory judgment seeking an injunction regarding specific sections of Chapter 78a. Chapter 78a went into effect on October 8 and regulates surface activities related to unconventional oil and gas production. MSC’s challenges to the regulations included:
- Count I challenging the validity of 25 Pa. Code Section 78a.1 and 78a.15(f), and (g), pertaining to public resources;
- Count II challenging the validity of 25 Pa. Code Section 78a.52a and 78a.73(c) and (d), pertaining to area of review;
- Count III challenging the validity of 25 Pa. Code Section 78a.58(d), pertaining to onsite processing;
- Count IV challenging the validity of 25 Pa. Code Section 78a.59a and 78a.59c, pertaining to impoundments;
- Count V challenging the validity of Pa. Code Section 78a.645, pertaining to site restoration;
- Count VI challenging the validity of 25 Pa. Code Section 78a.66(c), pertaining to remediation of spills;
- Count VII challenging the validity of 25 Pa. Code Section 78a.121(b), pertaining to waste reporting; and
- Count VIII requesting injunctive relief.
78a Injunction Decision
A decision by Judge P. Kevin Brobson was entered on November 8, which granted the application in part and denied it in part. Specifically, DEP was preliminarily enjoined from implementing and enforcing:
- Sections 78a.1 and 78a.15(f) and (g), pertaining to public resources, only to the extent that they include “common areas on a school’s property or a playground” and “species of special concern” as “public resources” and include “playground owners” in the definition of “public resource agency.” The court found that their inclusion “appears to be untethered” to DEP’s statutory authority. Further, the court reasoned that because “species of special concern” did not have any special protection under the law because the classification falls below endangered species and is not the result of any public rulemaking.
- Section 78a.52(c)(3) and Sections 78a.73(c) and (d), relating to monitoring and remediation provisions, only to the extent that they impose monitoring and remediation obligations on owners and operators with respect to wells identified in the area of review survey owned and/or operated by others. The court reasoned that because these provisions require well operators to monitor all wells identified in the area of review survey, regardless of whether those wells are accessible to the well operator, MSC had raised a substantial legal question and the provisions constituted irreparable harm.
- Sections 78a.59b(b) and 78.59c in their entirety. Those provisions relate to imposing new construction standards for well development impoundments. The court held that MSC raised substantial questions relating to the legal validity of the regulations regarding how they treat existing impoundments, and narrowly tailored its injunction to relate to existing impoundments. New impoundments must comply with the new standards in the regulations.
- Section 78a.65(d) in its entirety. The provision relates to site restoration. MSC argued in its petition that Section 78a.65(d) purported to impose costly requirements under The Clean Streams Law regulations pertaining to post-construction stormwater management (PCSM) plans and best management practices (BMPs). The court agreed there was a substantial legal question regarding if the provision imposed requirements on operators in excess of what is required under The Clean Streams Law and enjoined the provision.
All other counts were denied.