Saturday, July 09, 2011

Democratic Development Part I - The Real World

Last night I caught the last half of This American Life and was both surprised and jealous to discover they were doing a story on one town, Mt. Pleasant, PA, and its encounter with a gas company, Range Resources. The particulars of the story, a conflict over zoning in Mt. Pleasant, has been covered in the press and on-line, so while I am going to recap it here, I urge anyone who has not to check out either TAL's website to download a podcast of the program, or, if you are in the northern Illinois area, listen to a rebroadcast of the program on WNIJ this morning at eleven a.m.

The conflict between Mt. Pleasant and Range Resources can be summed up pretty easily - David and Goliath. As this blog post at Marcellus Drilling makes clear, the company was quite willing to toss an entire town, and all its gas reserves, away if the township didn't pass an ordinance to its liking.
Range Resources, one of the largest drillers in the Pennsylvania Marcellus Shale, is threatening to stop drilling in Mt. Pleasant Township (Washington County), PA. A letter to landowners in the Township says, in part, “We may be forced to shift activity to other, more cooperative townships.”

Why the threat? The dispute seems to center on the type of permits that will be issued in the Township if a new ordinance is passed later this month.
The township has been working on a new oil and gas ordinance which is slated to be adopted by the end of the month. Range, [Township Supervisor Larry] Grimm said, "is dead set opposed" to gas drilling being a conditional use instead of a permitted use. Conditional use would require a public hearing on each well.*


“If the township is still uncooperative, we are prepared to explore all options, including no longer drilling, which would cost landowners tens of millions of dollars in lost royalties. We don’t want to do that.”*
There was not a debate over whether or not to drill in and around the Mt. Pleasant area. The question involved details, wherein the devil usually resides. A conditional-use ordinance may - or may not - require a public hearing on each new well, but it also places restrictions on well location, whether or not company supervisors can sleep on-site (another conflict within the town), truck route usage through the town, and other concerns.

Range, like all stakeholders in this matter, certainly has the right to make its voice heard, to make the case for its preferred outcomes, and to use any and all legal lobbying means necessary to get the township to act in a way that suits its interests. At the same time, the three council members - and there are only three, part time council member, on a limited public budget dealing with a variety of matters all rural communities face from animal control to meth production and distribution along with the gas boom - were pursuing an ordinance they believed, and from the feedback from the community had good reason to expect would be supported as, in the interests of both the township and the gas company. Indeed, the conditional use zoning law would not require a public hearing and comment period before each new well. Rather, it would establish guidelines for bundling proposed and actual wells together for periodic hearings, but Range could continue to explore and drill, provided certain other legal limitations were followed.

This struggle in Mt. Pleasant has been made more complicated by recent attempted legislation in the Pennsylvania State Senate. A bill that would impose an impact fee on natural gas companies had, tucked in near the bottom of the bill, a provision that stated any community that did not pass permitted-use zoning ordinances for the gas companies would have no access to the funds distributed through the legislation. The bill includes a model ordinance local governments could use to draft their legislation to be in line with the proposed legislation.

The legislation failed, but is sure to be reintroduced. As I keep saying, the stakes are too high for this to go away.

The struggle throughout Pennsylvania between gas companies playing the hardest of hard ball and small townships over zoning ordinances has not been lost on local governments in New York. With a ban on natural gas development still in place, localities have been studying the action to their south, and are getting together to compare notes on how to proceed once the ban is lifted.
Gregory Sovas recently addressed local government leaders in Upstate NY to brief them on the fact that local governments cannot enact laws—zoning or otherwise—that would prohibit hydraulic fracturing or drilling in the Marcellus and Utica Shale. The legal principle is that local government laws cannot supersede the state law when it comes to regulating oil and gas drilling. Mr. Sovas should know—he’s the author of the language that became the law.

MDN received a number comments on that article (see here) stating the legality of local zoning ordinances regulating oil and gas drilling is far from over. The commenters claim that New York’s law in this regard is not yet settled.

A recent article sums up that viewpoint, stating that DEC Commissioner Joe Martens has left the door open in the forthcoming new regulations for local governments to control or even ban fracking by using zoning ordinances. . . .
The hardball tactics the gas companies are willing and can afford to play are not pretty. Even more than the often nonsensical theater at the federal level, this kind of local struggle proves how little politics resembles beanbag. Townships, villages, boroughs, counties, any and all local governing bodies throughout the Marcellus Shall region should be prepared for politics at their worst. While there has been much screaming about the topic, particularly on-line, no serious player involved in these matters has proposed an out-and-out long-term ban on natural gas exploration and drilling. Indeed, as the case of Mt. Pleasant, PA makes clear, the issue was not whether to drill and develop, but under what conditions. The gas company has tremendous resources at its disposal, not the least of them the option of withdrawing from the township altogether, letting it wither on the vine while other, neighboring townships (having learned their lesson), prosper as the gas companies are given the keys to the town, the town store, and pretty much anything else they want. The proposed legislation in Pennsylvania, which appears to have a mirror in New York (although it seems assured there will be litigation over that very question), does not help localities in making the best decision for their constituents.

In the real world, the politics of economic development can be rough and tumble. The case of Mt. Pleasant makes clear just how rough.

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