On February 8, 2012, the Pennsylvania General Assembly passed House Bill 1950 amending the Commonwealth’s Oil and Gas Act (the “Act”). It was signed into law on February 13th 2012 by the Governor. Under HB 1950, an impact fee will be levied on each fracked gas well and is anticipated to yield between $190,000 and $355,000 per well in the first 15 years. The funding will be split between local municipalities and the state. In addition, this legislation restricts local municipalities’ ability to use zoning regulations to restrict drilling and hydraulic fracking in residential neighborhoods, taking away residents ability to make decisions about drilling that best fits the needs of their communities. HB 1950 increases setbacks, providing that the shale gas wells are 500 feet from occupied structures and water wells, and 1,000 feet from public drinking water wells. In addition to the setbacks, the new law prohibits wastewater pits within the 100 year floodplain, requires new fracturing fluid chemical disclosure, requiring all operators to complete a chemical disclosure form and post the form on the chemical disclosure registry, FracFocus.com. Other items required under the law are additional well permitting procedures, plans, and approvals, increased bonding requirements and stricter enforcement and higher fines. Finally, the new law requires drillers to notify all surface rights owners within 3,000 feet of a well head.
In Pennsylvania, ownership of surface rights and ownership of minerals rights are often separated. In addition, mineral rights on the same tract may be separated from each other - oil, gas, coal, hard rock minerals, etc. may all be owned by separate companies. The mineral rights were usually separated before land was partitioned so that an individual or corporation may own the rights to an entire neighborhood. Pennsylvania does not maintain ownership records of mineral properties in a central location nor do they have property tax records for the mineral rights because they do not pay property taxes on those rights. Rather; county governments maintain the old transfer records that contain this, you could be surprised to find that a corporation already has the right to drill within 500 feet of your house, but under the new law they will have to notify you of their intent to drill.
All surface and mineral owners have property rights under the law. Pennsylvania recognizes both the mineral owner's right to recover the mineral, and the landowner's right to protection from unreasonable encroachment or damage. Some towns had attempted to control hydraulic fracturing and shale gas processing through zoning. Now, HB 1950 effectively removes oil and gas drilling and related gas processing activities from nearly all local land use regulation, including regulation under the Municipalities Planning Code. According to Richard A. Ward, Township Manager Robinson Township, PA, this bill effectively turns the entire state of Pennsylvania into one large industrial zone. No zoning could exclude fracking wells and shale gas processing and no neighborhood is safe.
This bill amends Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, consolidating the Oil and Gas Act modifying the definitions, well permitting process, well location restrictions including increasing horizontal setbacks from water supply wells to 1,000 feet, reporting requirements, bonding, enforcement orders, penalties, civil penalties and, restricting local ordinances relating to oil and gas operations; and taxing the gas. However, the most significant element would in effect take away from the towns the ability to use zoning to exclude shale gas production in residential neighborhoods.
While it would undoubtedly be beneficial for the industry and regulators to have a single set of statewide regulations for siting and drilling hydraulic fracturing wells, watershed characteristics and geology vary across the state. Furthermore, the health and welfare of communities are best protected by local zoning. There has not been enough data gathered and studied to know horizontal distance to a drinking water well and aquifer will guarantee safety for the water supply throughout the various localities in the state and the 1,000 feet required under HB 1950 has no basis in scientific fact. Though it took several years, the legislation still seems in a rush, to generate taxes and jobs. The gas will still be there if we take the time to understand fracking adequately to be able to release the gas from the shale formations without significant damage to our water resources and communities.
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