9th Annual Pennsylvania Land Conservation ConferenceMay 21, 2011

Pipelines, Communities & Safety: Land Use & Model OrdinancesPresented by:Vincent M. Pompo, Esquirevpompo@lambmcerlane.com

Legal Framework

0 Federal0 State0 Preemption

Federal

0 Natural Gas Act0 Federal Energy Regulatory Commission (FERC)

0 Title 18, Chapter 1, Code of Federal Regulations (CFR)0 Preemption

Federal Preemption

0Supremacy of Federal law involving Natural Gas Transmission and Storage Facilities

0 Interstate Commerce0Total Preemption vs. Conflict Preemption

Role of FERC

0NGA confers upon FERC “exclusive jurisdiction” over the transportation and sale of natural gas in interstate commerce for resale

0Nevertheless, as a matter of policy, FERC has imposed upon applicants a requirement to cooperate with State and local agencies through conditions placed on certificates of public convenience and necessity

Typical FERC Ordering Paragraph

0Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of AES’s section 3 authorization and Mid-Atlantic’s section 7 certificate. We encourage cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.

What Does This Mean?

0Certificate Holders Must Apply for Permits0 If a Conflict arises between the requirements of a

state or local agency, and the Certificate’s conditions, Preemption will apply

0However, FERC subscribes to a “Rule of Reason”0To the extent a state or local agency “unreasonably

delays” issuance of an approval, the applicant could proceed without such approval

Municipal Role

0Clear and defensible ordinances pertaining to local issues specific to pipelines and related surface facilities

0Legal authority under statewide municipal codes, such as the Second Class Township Code

0Legal authority under the Pennsylvania Municipality Planning Code (MPC)

Case StudyRange Resources vs. Blaine Township

0General township ordinance regulating corporate disclosure and other matters

0Prohibited corporation from operating in the township if it had a history of violations of law

0Preemption under Oil and Gas Act0 Invalid exercise of township’s municipal powers

Regulation under the MPC

0Zoning and Oil and Gas Act Preemption

Pennsylvania Oil and Gas Act

0 From the Oil and Gas Act, Sec. 602 –0 Except with respect to ordinances adopted pursuant to the

Municipalities Planning Code, and the . . . Flood Plain Management Act, all local ordinances and enactments purporting to regulate oil and gas well operations regulated by this act are hereby superseded. No ordinances or enactments adopted pursuant to the aforementioned acts shall contain provisions which impose conditions, requirements or limitations on the same features of oil and gas well operations regulated by this act or that accomplish the same purposes as set forth in this act. The Commonwealth, by this enactment, hereby preempts and supersedes the regulation of oil and gas wells as herein defined.

Municipalities Planning Code (MPC)

0 Sec. 603(b) - Zoning ordinances, except to the extent that those regulations of mineral extraction by local ordinances and enactments have heretofore been superseded and preempted by . . . the act of December 19, 1984 (P.L. 1140, No. 223), known as the "Oil and Gas Act,” . . . or that regulation of other activities are preempted by other Federal or State laws may permit, prohibit, regulate, restrict and determine:

0 Preemption of zoning ordinances by the Oil and Gas Act is express in the MPC

0 Sec. 603(i) – Zoning ordinances shall provide for the reasonable development of minerals in each municipality

Conflicting and Confusing Issues: Preemption

0What can be regulated and what cannot – drilling activities vs. transmission pipelines vs. surface pipeline facilities;0Preemption by State of all or a portion

of land use regulations

Huntley & Huntley, Inc. vs. Borough of Oakmount

0PA Supreme Court0Natural gas wells on residentially zoned land0Zoning ordinances may preclude the surface use of

land for natural gas production0Such a basic zoning function is not preempted by the

Oil and Gas Act0Local authority is retained for the “core municipal

function” of designating districts in which land uses may occur

Range Resources-Appalachia LLC vs. Salem Township

0PA Supreme Court 0Subdivision and Land Development Ordinance

covered permitting procedures for oil and gas wells, bonding, regulation of well heads, and other operational requirements

0Ordinance did not guarantee issuance of a permit0Comprehensive scheme of municipal regulation oil

and gas drilled found preempted by Oil and Gas Act0How vs. Where

Penneco Oil Company, Inc. vs. County of Fayette

0PA Commonwealth Court0County zoning ordinance permits oil and gas wells by

special exception in five zoning districts0Ordinance did not pertain to technical or operational

aspects0Ordinance directed to “preserving the character of

residential neighborhoods, and encouraging beneficial and compatible land uses

Standards & Criteria Upheld in Penneco Oil

0 An oil or gas well shall not be located within the flight path of a runway facility of an airport.

0 An oil or gas well shall not be located closer than 200 feet from residential dwelling or 50 feet from any property line or right-of-way.

0 An oil or gas well shall provide fencing and shrubbery around perimeter of the pump head and support frame.

0 The Zoning Hearing Board may attached additional conditions pursuant to this section, in order to protect the public’s health, safety, and welfare. These conditions may include but are not limited to increased setbacks.

Regulation under Municipal Codes

0Road Opening Permits0Section 2322 of the Second Class Township Code –

“No . . . gas pipe [shall] be laid upon or in, . . . , any portion of a township road except under conditions, restrictions and regulations specified in permits granted by the township for that purpose.”

PREEMPTION?

0Roads are peculiarly and historically a local function0Under PA law, even public utilities need to comply:

“Before entering upon any street, highway or other public way, the public utility corporation shall obtain such permits as may be required by law and shall comply with the lawful and reasonable regulations of the governmental authority having responsibility for the maintenance thereof.” 15 Pa.C.S. Sec. 1511(e)

Summary

0Cannot Avoid Preemption Issues Involving Pipelines0Adopt Defensible Local Ordinances0Rely on Core Municipal Powers and Authorities

Questions/Comments?

0CONTACT INFORMATION:0Vincent M. Pompo0Lamb McErlane, P.C.0Box 565, West Chester, PA 19381-05650610-438-80000vpompo@lambmcerlane.com

Pipelines, Communities & Safety: Land Use & Model OrdinancesPresented by:Vincent M. Pompo, Esquire