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New Zoning Laws Could Take Major Toll on Marcellus Ops
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The growth of Pennsylvania's massive Marcellus Shale play could be affected by a recent supreme court ruling, according to reports by multiple news outlets.
The Dec. 19 ruling overturned the state-wide zoning laws that had been passed by the Pennsylvania Legislature and Governer Tom Corbett in Act 13. Local level governments were returned the power to decide when and where to allow drilling in their jurisdiction. Robinson Township and South Fayette were two of the municipalities challenging Act 13 by suit.
The ruling will create a need to evaluate where an operator wants to do business far more closely. In addition to smaller townships, the number of cities, boroughs and heavily populated suburban areas means there are more than 2,000 entities with a governing body in Pennsylvania, and each could decide to amend or create zoning ordinances. Individual municipality regulations will need to be dealt with on a case-by-case basis.
Other states could follow the precedent set by Pennsylvania in their own legislation.
Colorado and Texas have had restrictions placed on drilling recently as well.
The credit ratings agency Fitch Ratings said: "In our view, changes like these will slow the pace of potential revenue growth from oil and gas-related activities for both states and local governments as managing new local regulations will require some time.
We expect many of [the local governments] to be open to oil and gas exploration as their communities historically grew during decades of coal mining and their employment growth rates have lagged national averages."
Shale Experts will report more on this story as it develops.