Written
by Chloe Marie – Research Fellow
In
March 2017, Pennsylvania DEP approved permits for Class II Oil and Gas Related
Injection Wells in Highland Township, Elk County, and Grant Township, Indiana
County, Pennsylvania. The grant of these permits followed many years of legal
proceedings resulting from opposition to the application filed by Seneca
Resources Corporation in Highland Township and the application filed by Pennsylvania
General Energy in Grant Township. In both instances, local ordinances were
enacted to prohibit the wastewater injection wells.
This
article will address the litigation pertaining to the Highland Township
ordinance while a future article will discuss the litigation relating to the
Grant Township ordinance.
First lawsuit timeline (Seneca Resources Corp. v. Highland
Township, et al., docket no. 1:15-cv-00060)
On
January 9, 2013, Highland Township adopted a Home Rule Charter Ordinance No.
1-9 prohibiting the permanent disposal of waste from oil and gas extraction within
the Township’s boundaries. This
Ordinance was enacted nearly seven months after Seneca Resources Corporation (“Seneca’)
filed a UIC permit application on June 15, 2012, with the U.S. EPA Region 3
Office to convert an existing natural gas well into a Class II injection well.
The
Ordinance took effect on January 14, 2013, and expressly stated that “it shall
be unlawful for any individual or corporation, or any director, officer, owner,
or manager of a corporation to use a corporation, to deposit, store, ‘treat,’
inject or process waste water, ‘produced’ water, ‘frack’ water, brine or other
materials, chemicals or by-products that have been used in the extraction of
shale gas onto or into the land, air, or waters within Highland Township.” The
Ordinance also stipulated specifically that it applied to disposal injection
wells.
On
January 28, 2014, EPA Region 3 Office granted said UIC permit allowing Seneca
to construct and operate the Class II injection well. Quickly thereafter, the
Environmental Appeals Board (EAB) received three petitions for review of the
UIC permit (UIC Appeal No. 14-01; 14-02; 14-03), which EAB denied on May 29,
2014, based on procedural grounds. Pursuant to 40 C.F.R. § 124.19(1)(2)(i), EPA
Region 3 Office then issued a favorable final permit decision regarding the UIC
permit on June 17, 2014.
Seneca
initiated a lawsuit on February 18, 2015, against Highland Township and its
Board of Supervisors before the U.S. District Court for the Western District of
Pennsylvania challenging the Ordinance. Seneca
sought a court order preventing the Township from enforcing portions of the
Ordinance relating to the prohibition of brine-injection wells within the
Township’s boundaries. The complaint stated that “the Ordinance is unduly
oppressive, arbitrarily interferes with private business, and imposes unnecessary
restrictions upon lawful business activities based on the mere allegation and
speculation that all disposal and storage of brine adversely affects the
health, safety, and welfare of the residents of the Township.” Seneca requested
the U.S. District Court to declare that the Ordinance was preempted by the
Federal Safe Drinking Water Act and the Pennsylvania Oil and Gas Act and that
the Ordinance adoption reflected an impermissible exercise of police power.
On
March 24, 2015, Highland Township amended and revised Ordinance No. 1-9 in
response to Seneca’s Motion for Preliminary Injunction filed twelve days
before. Seneca then filed an Amended Complaint on April 6, 2015, declaring that
“rather than eliminating the patently objectionable deprivations of Seneca’s
constitutional rights, the Amended Ordinance merely masks those deprivations by
not referring specifically to certain Constitutional Amendments” before adding
that “the Amended Ordinance continues to ban the disposal and storage of Brines
within the Township and purports to invalidate state and federal permits which authorize
the disposal and storage of Brines within the Township.”
On
April 21, 2015, Highland Township filed a motion to dismiss the lawsuit
alleging a lack of standing. Highland Township pointed out that Seneca had not
yet received the required DEP permit to pursue its project and also had failed
to perform the mechanical integrity test for UIC wells set forth in the EPA
permit. Furthermore, the motion stated that the Amended Ordinance “solely
affects Seneca’s ability to create and operate an injection well within
Highland Township, and does not affect any other aspect of Seneca’s operations
within Highland Township.” The U.S. District Court denied said motion on March
29, 2016.
On
April 21, 2016, Seneca filed a motion for judgment on the pleadings
highlighting that “there is no question that Seneca is entitled to judgment on
the pleadings as the Amended Ordinance preempts various Pennsylvania statutes
and impermissibly divests Seneca of fundamental rights under the Supremacy Clause
and the First, Fifth and Fourteenth Amendments of the United States
Constitution.”
On
August 11, 2016, Highland Township and Seneca entered into a Consent Decree and
agreed to resolve Seneca’s claims that portions of the Amended Ordinance were
unconstitutional under both the U.S. and Pennsylvania Constitutions and
constituted an impermissible exercise of Highland Township’s legislative
authority. The Consent Decree clarified that “nothing … shall preclude Seneca
from challenging any future ordinance or charter by Highland, whether adopted
by a new Board of Supervisors again seeking to assert those powers claimed in
the [Amended] Ordinance … or otherwise.” On the next day, the U.S.
District Court approved and adopted said Consent Decree as constituting a final
judgment of the court.
Second lawsuit timeline (Seneca Resources Corp. v. Highland Township
et al., docket no. 1:16-cv-00289)
On
November 8, 2016, Highland Township adopted a new Home Rule Charter Ordinance,
which again permanently banned the deposition of waste associated with oil and
gas extraction activities. The new Ordinance also specified that “no permit,
license, privilege, charter, or other authorization, issued by any state or
federal government entity, that would enable any corporation or person to
violate the rights or prohibitions of this Charter, shall be lawful within
Highland Township.”
As
a result, Seneca filed another lawsuit
on November 30, 2016, against Highland Township challenging the new Ordinance
before the U.S. District Court for the Western District of Pennsylvania. Seneca
asserted that portions of the new Ordinance are “substantially identical” to
the prior Amended Ordinance, which was found to be unconstitutional in an
earlier ruling.
On
February 9, 2017, Seneca requested the U.S. District Court to enter a judgment
on the pleadings, again alleging that the new Ordinance was unconstitutional
pursuant to the First, Fifth and Fourteenth Amendments and the Supremacy Clause
of the U.S. Constitution. Recently, on September 29, 2017, the U.S. District
Court granted such motion in part and invalidated several provisions of the new
Ordinance.
DEP process timeline
During
the pendency of the litigation described above, the Pennsylvania Department of
Environmental Protection (DEP) review process was underway. In a letter dated
January 2015, the Highland Township Board of Supervisors advised DEP that the
UIC permit delivered to Seneca by U.S. EPA was invalid based on the Amended
Ordinance and thus future permits issued by DEP also would be considered as
invalid. In the meantime, Seneca notified Pennsylvania DEP of the pending
litigation between the company and Highland Township.
On
August 12, 2015, Pennsylvania DEP decided to suspend its review of the UIC
permit pending a court decision and emphasized its “obligation to consider
applicable local ordinance related to environmental protection and the
Commonwealth’s public natural resources” even though it expressed doubts about
the validity of the Township Ordinance.
Following
the Consent Decree approved by the court on August 12, 2016, Pennsylvania DEP approved the UIC permit
application filed by Seneca on March 27, 2017. Interestingly, on the same date,
Pennsylvania DEP also initiated a lawsuit against Highland Township seeking to
invalidate the provisions set out in the new Ordinance (Pennsylvania DEP v. Highland Township of Elk County, Commonwealth Court
of Pennsylvania, docket no. 123 MD 2017).
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