On February 8, 2012, the Pennsylvania General Assembly passed House Bill 1950, which makes a series of reforms to the Commonwealth’s Oil and Gas Act, 58 P.S. §§ 601.101 et seq. Among the reforms to the Act are provisions attempting to supply “uniformity” with respect to local municipal ordinances relating to oil and gas operations and to further clarify the scope of preemption under the Act. This alert discusses the uniformity reforms, and related provisions, in House Bill 1950.

Background - Preemption Under the Oil and Gas Act.

Currently, Section 602 of the Oil and Gas Act, 58 P.S. § 601.602, preempts local ordinances that attempt to regulate oil and gas wells except for ordinances adopted pursuant to the Municipalities Planning Code (the “MPC”) or Flood Plain Management Act (“FPMA”). Even ordinances adopted pursuant to the MPC or FPMA have significant limitations. An ordinance adopted pursuant to the MPC or FPMA is preempted if (1) the ordinance “contain[s] provisions … that accomplish the same purposes as set forth in” the Act; or (2) the ordinance “contain[s] provisions which impose conditions, requirements or limitations on the same features of oil and gas well operations regulated by” the Act.

The Pennsylvania Supreme Court, in a series of cases decided in 2009, concluded that municipal ordinances will be preempted by Section 602 of the Act when they comprehensively regulate oil and gas development, when they have the same “purposes” as the Act or when they impose conditions, requirements or operations on the same “features” of oil and gas operations as does the Act. See Huntley & Huntley, Inc. v. Borough Council of the Borough of Oakmont, 964 A.2d 855 (Pa. 2009), and Range Resources – Appalachia, LLC v. Salem Township, 964 A.2d 569 (Pa. 2009).

While Huntley and Range provided some guidance to industry and municipalities regarding the scope of preemption under Section 602 of the Act, the decisions also left many questions unanswered. Since those decisions, there has been a proliferation of inconsistent and varying “zoning” ordinances adopted by municipalities across the Commonwealth directed specifically at oil and gas development, many of which are overtly hostile to such development. Those ordinances, in turn, have spawned additional litigation over the scope and effect of Section 602 of the Act and, in some cases, have impeded oil and gas development in certain municipalities in the Commonwealth.

Please see full alert below for more information.