Wednesday, October 25, 2017

Shale Law in the Spotlight: Recent Litigation Relating to Wastewater Injection Well Prohibition in Grant Township

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 Grant Township’s Community Bill of Rights Ordinance. In a prior article, we focused on the litigation relating to the Highland Township’s Ordinance.

The lawsuit timeline (Pennsylvania General Energy Company, LLC v. Grant Township, docket no. 1:14-cv-00209)

On May 2, 2013, Pennsylvania General Energy (PGE) submitted a UIC permit application to the U.S. Environmental Protection Agency (EPA) for conversion of a production well – the Yanity Well – into a Class II-D brine disposal injection well in Grant Township, Indiana County, Pennsylvania. The public comment period was open through October 28, 2013. EPA issued the UIC permit to PGE on March 19, 2014.

On April 7, 2014, several residents of the township filed three petitions seeking review of the UIC permit with the EPA Environmental Appeals Board (EAB) alleging that “the [U.S. Environmental Protection Agency Region 3] failed to respond adequately to public comments submitted regarding the permit and question whether the permit conditions are adequate to protect the groundwater aquifer.” These cases were consolidated, and on August 21, 2014, EAB issued an order denying all three petitions for review finding that the Region provided sufficient answers to the questions and concerns set forth by the petitioners. EPA Region 3 then issued a favorable final permit decision regarding the UIC permit on September 11, 2014.

In the midst of all these developments at the federal level, Grant Township adopted a Community Bill of Rights Ordinance on June 3, 2014, prohibiting any corporation or government from engaging in projects and activities that would violate the Ordinance, including waste disposal generated by oil and gas activities within the township’s boundaries. As a result, PGE initiated legal action on August 8, 2014, against Grant Township in the U.S. District Court for the Western District of Pennsylvania challenging certain provisions of the Ordinance. In its complaint, PGE declared that “as a direct and proximate cause of Grant Township’s adoption of the Community Bill of Rights Ordinance, PGE will be precluded from operating the Yanity Well for legally permissible injection purposes and will have to seek more costly alternatives for managing produced fluids.” PGE asked the U.S. District Court to enjoin Grant Township from enforcing the Community Bill of Rights Ordinance and declare that the Ordinance is preempted by state law as well as unconstitutional under federal laws.

On October 10, 2014, PGE also filed a Motion for Preliminary Injunction against Grant Township outlining that Grant Township exceeded its authority in adopting the Community Bill of Rights Ordinance given the fact that Grant Township is a Second Class Township and thus is not allowed to regulate injection activities pursuant to the Second Class Township Code, 53 P.S. §§ 65101 et seq.

On December 15, 2014, both PGE and Grant Township filed cross motions for judgments on the pleadings. PGE argued that “the Community Bill of Rights Ordinance impermissibly regulates the development of oil and natural gas, which is exclusively and comprehensively regulated by [state law]” while Grant Township asserted that it was “entitled to judgment on the pleadings because the people of Grant Township possess the inherent and constitutional right of local, community self-government and legal doctrines asserted by PGE in this action violate this right.”

On March 19, 2015, Grant Township filed a motion to dismiss for lack of standing and mootness because PGE had yet to receive a DEP permit necessary for the construction and operation of an injection well. On the same day, Grant Township also filed a motion to stay pending the issuance of a well permit from DEP. On October 14, 2015, the U.S. District Court denied Grant Township’s motion to dismiss and granted, in part, PGE’s motion for judgment on the pleadings enjoining Grant Township from enforcing portions of the Community Bill of Rights Ordinance.

On October 26, 2015, Grant Township filed a motion for reconsideration of the U.S. District Court’s judgment issued on October 14, 2015. Grant Township alleged that the court “erred … in failing to expressly rule on whether the people of Grant Township have an inalienable and constitutional right of local community self-government, and … by omitting consideration of the Pennsylvania Constitution’s Environmental Rights Amendment as an independent legal basis for the Community Bill of Rights Ordinance.”

Interestingly, on November 3, 2015, Grant Township enacted a Home Rule Charter Ordinance replacing the Community Bill of Rights Ordinance. Consequently, on December 28, 2015, Grant Township filed a motion to dismiss the case for lack of jurisdiction claiming that  “in light of the passage of the Home Rule Charter repealing the Ordinance … PGE no longer has a basis to seek injunctive relief and its claims in this regard are moot and this Court no longer possesses subject matter jurisdiction over it.” On January 20, 2016, PGE filed a motion to strike in response to Grant Township’s above motion. On February 5, 2016, the U.S. District Court denied Grant Township’s motion for reconsideration contending that this motion is “nothing more than an attempt to relitigate its motion for judgment on the pleadings.” In addition, the Court granted PGE’s motion to strike Grant Township’s motion to dismiss for lack of jurisdiction.

Since February 5, 2016, activity on the case has continued – to include discovery proceedings and actions involving intervenors. The case remains pending.

Pennsylvania DEP timeline

On April 22, 2014, PGE filed a first well permit application with the Pennsylvania DEP (DEP) to change the use of the Yanity Well from a production well to a disposal well; DEP discovered procedural and substantive deficiencies in PGE’s application, and thus PGE withdrew its application.

PGE filed a second well permit application, and DEP granted such permit on October 22, 2014, but revoked it on March 13, 2015, stating that PGE did not meet all applicable legal requirements under Pennsylvania Clean Streams Law.

On March 31, 2015, PGE filed its third well permit application, and on June 1, 2015, DEP held a public hearing seeking input to the permit application. DEP approved the well permit application on March 27, 2017. On the same date, Pennsylvania DEP initiated a lawsuit against Grant Township seeking to invalidate the new Home Rule Charter Ordinance (Pennsylvania DEP v. Grant Township of Indiana County, Commonwealth Court of Pennsylvania, docket no. 126 MD 2017).


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