An oil and gas drilling regulation that sought to cure a fatal flaw in a section of Act 13 has met its demise as a result of that earlier defect.

The Commonwealth Court in Marcellus Shale Coalition v. Pennsylvania Department of Environmental Protection struck down a provision in the oil and gas regulations contained in Chapter 78a of the Pennsylvania Administrative Code requiring the Pennsylvania Department of Environmental Protection to consider, as part of the well permitting process, comments and recommendations submitted by municipalities.

The court said the authority of the Environmental Quality Board to promulgate such a regulation stemmed from Section 3215(d) of Act 13, which was previously invalidated by the Pennsylvania Supreme Court because it failed to require the DEP to consider input from municipalities.

In its 2013 ruling in Robinson Township v. Commonwealth (Robinson II), the high court declared Section 3215(d) unconstitutional because the law said only that the DEP “may” consider comments and recommendations submitted by municipalities at its discretion. The justices said the use of the word “may” rather than, for example, “will” improperly served to marginalize local input.

A five-judge panel of the Commonwealth Court in Marcellus Shale Coalition said the invalidation of that section of Act 13 meant the panel was constrained to also invalidate Section 78a.15(g) of the Pennsylvania Administrative Code.

“Although Section 78a.15(g) appears to succeed where Section 3215(d) of Act 13 failed by providing that the department 'will' consider such comments and recommendations, because the Supreme Court enjoined application and enforcement of Section 3215(d), there is no statutory authority for the regulation,” Judge Michael Wojcik wrote for the unanimous panel. “The department cannot grant powers to municipalities that no statute provides.”

Wojcik was joined by President Judge Mary Hannah Leavitt and Judges Renee Cohn Jubelirer, Robert Simpson and Patricia McCullough.

The panel did, however, find that Chapter 78a did not exceed its statutory authority by allowing the DEP to ask well applicants and public resource agencies, including municipalities, to provide information and comments that could assist in determining whether to grant or deny a permit.

“Well applicants and public resource agencies have the knowledge and expertise about the public resources in the vicinity of the proposed well, the functions and uses of those public resources, and how those functions and uses may be impacted by drilling unconventional wells,” Wojcik said. “Soliciting information from the well applicant and public resource agencies for consideration furthers the purpose of Act 13. It is only logical to enable the department to acquire information necessary to perform its statutory duties.”

Still, in addition to invalidating Section 75a.15(g) and its requirement that the DEP consider municipalities' input, the panel also agreed with plaintiff Marcellus Shale Coalition that it was an unlawful expansion of Act 13 for Chapter 78a to require that well permit applicants identify “species of special concern,” as listed by the Pennsylvania Natural Diversity Inventory, that a proposed well might impact.

“By creating obligations tied to species of special concern, which are not at the same level of risk as threatened or endangered species, the regulation upsets the balance between industry and the environment strived for in Act 13,” Wojcik said.

Wojcik also sided with MSC on its argument that Chapter 78a unlawfully expanded the regulatory definition of “public resources” to include “common areas of a school's property” and “playgrounds.”

Wojcik said requiring well applicants to identify such areas in order to aid the DEP in considering the potential impact a well could have on the surrounding land would be “unduly burdensome” on the applicants.

“'Common areas of a school's property' or 'playgrounds” do not share the same attributes as the other public resources identified in [Act 13] because they do not implicate public interest in the same way,” Wojcik said. “In other words, a McDonald's playground or a school parking lot utilized as a playground are not of the same class or nature as a scenic river, public park, or historical site warranting commonwealth trustee protection. Although common areas of a school's property and playgrounds may share some recreational similarities with the statutory public resources, they do not implicate 'public interest' in the same way and they are not part of the trust corpus over which the commonwealth is charged with protecting under the Constitution.”

Marcellus Shale Coalition president David Spigelmyer said in a statement that the ruling “provides valuable relief from portions of the regulations that are unreasonable, unworkable and exceed EQB and DEP's statutory authority.”

“MSC absolutely supports commonsense, predictable and workable regulations that are consistent with the authority provided to the agencies by the General Assembly,” Spigelmyer's statement said. ”We appreciate the court's careful consideration of the issues before it and its recognition of the regulatory overreach in these Chapter 78a provisions. We look forward to the court addressing the remaining challenged provisions to provide the regulatory certainty and clarity needed to enable job creation and economic growth.”

A DEP spokesman said the agency is reviewing the ruling.

(Copies of the 64-page opinion in Marcellus Shale Coalition v. Department of Environmental Protection, PICS No. 18-1046, are available at http://at.law.com/PICS.)