Saturday, July 28, 2007


Jul. 28, 2007 (McClatchy-Tribune Regional News delivered by Newstex) --
A state appeals court ruled Friday that municipalities can't regulate the location of oil and gas wells, dealing a potentially fatal blow to Nockamixon and Tinicum townships' efforts to restrict gas drilling to industrial areas.

As Michigan-based Arbor Resources prepared to search for natural gas this spring, the two Upper Bucks municipalities passed oil and gas ordinances hoping to limit the impact of drilling. Now they are in jeopardy.

An attorney for Oakmont, Allegheny County, which lost the case, said the ruling leaves municipalities no way to limit the location of the growing number of oil and gas wells being drilled in the state.

'It means that wherever you live, if you have more than 200 feet of open space from your house, you could wake up and see a gas operation the next day, and a municipality cannot control that,' attorney Cliff Levine said.

But industry advocates said that by giving primacy to state regulations, the ruling creates standard drilling (OTCBB:STDR) rules as Pennsylvania regulators process a record number of oil and gas well permits, many in areas that have not seen exploration.

Oakmont, home of Oakmont Country Club, which hosted this year's U.S. Open golf tournament, had sought to restrict drilling in its residential district and denied gas exploration company Huntley & Huntley a permit to drill in a borough neighborhood.

Allegheny County Court upheld the denial. But in its ruling Friday, Commonwealth Court ordered the borough to issue the permit, saying state law trumped local zoning.

'Because the [Oil and Gas] Act specifically precludes municipalities from enacting such measures ... the borough exceeded its authority in enacting the ordinance and consequently [we] conclude that the ordinance is invalid,' Judge James Gardner Collins wrote.

Patti Dodge, lead attorney for Huntley & Huntley, said the ruling, which Oakmont could appeal to the state Supreme Court, will apply to municipalities across the state.

'The location and placement of wells is specifically addressed through the Oil and Gas Act,' Dodge said.

The law says only that wells can't be drilled within 200 feet of buildings or water wells or within 100 feet of any body of water or wetlands.

Efforts Friday to reach attorneys for Nockamixon and Tinicum townships were unsuccessful.

Tinicum Supervisor Nick Forte said he would make sure the township's attorney had a copy of the ruling to assess its effect on the local ordinance.

Nockamixon Supervisor Nancy Janyszeski said that if the ruling has statewide implications, the township would have to re-examine its ordinance.

'There's still a lot to find out about how this will all affect Nockamixon Township,' Janyszeski said.

Industry spokesman Steve Rhoads of the Pennsylvania Oil and Gas Association said the decision was sure to render Nockamixon's zoning restrictions invalid, and said the township would be 'foolish' to fight a challenge.

He said the industry relies on standards set by state law to do business in a state made up of hundreds of municipalities. Otherwise, the municipalities could create a nightmarish patchwork of regulations and make oil and gas exploration nearly impossible.

'It's clear the pre-emption is fairly strong, and the Oil and Gas Act essentially pre-empts virtually anything a local government would want to do to effect oil and gas operations,' Rhoads said.

 scott.kraus@mcall.com

215-230-4930

Newstex ID: KRTB-0001-18490174


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