Act 13 Ruled Unconstitutional: What Happens Now?

Last week, the .

The specific parts struck down dealt with the preemption, or taking away, of the rights of municipalities to use zoning ordinances to ensure safety, accountability and responsibility in oil and gas development. Our region figured prominently in the fight: , Mt. Pleasant, Robinson, South Fayette and Peters Townships were all plaintiffs, and

The court’s ruling has left many people who care about the issue of natural gas development asking a simple question—what happens now?

With the propaganda machine of energy industry lobbyists who spent $1.3 million in three months to pass Act 13 and the cheerleading politicians who accepted their largesse doubling down on their talking points, I thought it would be a good idea to set a few facts straight.

1. Drilling has not been banned in Pennsylvania. All the court did was roll everything back to the way it was before Act 13 was passed a few months ago. A company can still drill in any municipality; it just has to follow local zoning laws again.

Expect to hear lots of complaining from the industry about “unreasonable local ordinances;” but it just isn’t true. Nearly every municipality was willing to work with the gas industry on a reasonable ordinance before Act 13 was passed, but the lobbyists decided to go over the heads of local communities anyhow.

Here’s an interesting fact—in some municipalities, the drillers threatened to leave and/or sue over ordinances without ever even trying to follow them. Local leaders should have a much stronger hand to play when faced with these bullying tactics the second time around.

2. The decision did not infringe on property rights; in fact, it clearly protected them. Judge Pellegrini wrote clearly in his opinion that Act 13, “…violates substantive due process because it does not protect the interests of neighboring property owners from harm, alters the character of neighborhoods and makes irrational classifications—irrational because it requires municipalities to allow drilling operations and impoundments, gas compressor stations, storage and use of explosives in all zoning districts, and applies industrial criteria to restrictions on height of structures, screening and fencing, lighting and noise.” In simple language, the court acknowledged property owners have rights even if they don’t have gas leases.

3. The impact fee is not affected. Here’s another scare tactic—claiming the impact fee money (which translates into about a 1 percent tax with plenty of gas industry givebacks) won’t materialize because of the court decision. There are no facts to back that up—the court deliberately left the impact fee language in place and struck down the zoning portions.

4. Claims the Act 13 decision will cost us jobs are just false. Yet another scare tactic—and this is the big one. All you need to know about the ridiculousness of the cries about job losses is to look at the numbers. In the five years leading up to the passage of Act 13, stock in Range Resources went up about 200 percent, and that was with local zoning still intact. If all we’re doing is going back to the way things used to be, how can anyone argue the drillers are suddenly going to lose money because Act 13 was struck down?

Pennsylvania was already seeing a slowdown due to very low gas prices and the rush to develop ‘wet gas’ regions in Ohio. Don’t let anyone tell you any slowdown or loss of jobs is solely due to Act 13, because there just aren’t any facts to back it up. 

On July 24, Range Resources reported revenue of $442.4 million for the last quarter—and that’s only three months. It has money to pepper ads and billboards all over the place, and was a sponsor of the opening ceremonies of the Olympics in London.

With those kinds of revenues and so much money to blow on advertising for a company that doesn’t really sell anything to the public, there’s just no way it will go broke by requiring it to move a few hundred more feet away from a church, school, hospital or your house before drilling or building a compressor station.

5. The Act 13 decision will not increase your home heating bill. This is a common and very inaccurate statement I hear. Natural gas is a global commodity traded on a world market; the gas being pulled from underneath Pennsylvania is just as likely to end up in China or Russia as it is to end up in your furnace. The prices are so low because the supply is so great. At a recent event sponsored by a local chamber of commerce, someone from a gas company got up and said to a room of 200 people that one of the biggest challenges of the industry is to find ways to drive up prices to increase production and profits—not one person in the room seemed to disagree.

Remember those words the next time you hear someone on industry payroll talk about cheap, domestic energy as though they want your monthly heating bills to disappear; they want it to be cheap, but not so cheap they can’t make a healthy profit.

Gov. Tom Corbett has to the Pennsylvania Supreme Court, but with Justice Joan Orie Melvin under indictment and not sitting on the bench, it will take four of the six justices to overturn the Commonwealth Court’s decision.

In the meantime, with so many cards finally out on the table, the next few months should clearly demonstrate who is really looking out for a responsible, transparent way to develop natural gas in Pennsylvania, and who is only looking out for themselves.