An attorney representing the state Department of Environmental Protection told the Pennsylvania Supreme Court that, in the year since the Marcellus Shale Coalition won a preliminary injunction blocking portions of new oil and gas drilling regulations, more than 700 sites have been drilled.
Without the new monitoring and permitting regulations in place, “that could result in a geyser-like explosion,” attorney Elizabeth Davis told the justices.
She made the point in an attempt to emphasize the importance of lifting the stay while the merits of the underlying claims continue to be litigated.
However, according to Davis, the Commonwealth Court’s ruling staying portions of the new regulations not only expose Pennsylvanians to potential dangers, the injunction also imposed an improperly high burden on regulatory agencies that could frustrate their efforts to make rule changes.
“The Commonwealth Court changed the preliminary injunction standards,” Davis argued, saying the ruling could have “far and wide” implications for Pennsylvania.
The case stems from a lawsuit the Marcellus Shale Coalition filed last year challenging sections of Chapter 78a, which took effect in early October 2016. The coalition’s suit focused on sections of Chapter 78a that involve the permitting process for wells and protections for threatened species. Its challenge also focused on changes to the area review required before drilling and handling of residual waste. The complaint also sought to stay new rules regarding freshwater impoundments, well site restoration, remediation of spills and reporting of waste.
Taken together, the challenged portions represent much of the heart of the new regulations.
Davis said the DEP should be given deference given that the changes were the result of a six-year rule-making process, but the Commonwealth Court, she argued, shifted the burden onto the agency and failed to make a finding that the Marcellus Shale Coalition was likely to succeed on the merits of its case.
“It is not enough to merely present legal issues to prevail on an injunction,” she said.
Chief Justice Thomas Saylor, however, said that Davis’ position that the agency was entitled to deference indicated there was some ambiguity on the underlying issues, and he questioned why the agency didn’t focus on the underlying case.
Chapter 78a will require drillers to hire new staff, change operations at functioning wells, develop new reporting systems and acquire new equipment, the coalition’s complaint said. There is an “urgent necessity” to avoid harm to companies that cannot be compensated by damages, and to prevent further injury, and in some cases drillers could lose money spent preparing permit applications that are now outdated, according to the complaint.
Justice Christine Donohue questioned the coalition’s attorney, Jean Mosites of Babst, Calland, Clements and Zomnir, about the language of the Commonwealth Court’s ruling, saying it “sounds like a decision deciding issues rather than deciding a preliminary injunction.”
“That concerns me,” Donohue said, adding that if the court affirmed, it seemed the Supreme Court would be making a finding that the DEP’s conduct was unlawful. “It sounds much more like a declaratory judgment decision.”
Mosites responded that affirming would not create any judicial estoppel, “law of the case” or res judicata issues.
In regards to the proper burden that should be applied, Mosites said the Commonwealth Court never shifted the burden onto the DEP.
“Judge [Kevin] Brobson’s choice of words perhaps blurred that burden when referencing the record,” Masitis said. “But we don’t see that as shifting the burden.”
Max Mitchell can be contacted at 215-557-2354 or firstname.lastname@example.org. Follow him on Twitter @MMitchellTLI.