Court to hear shale gas challenge

PHILADELPHIA — The judges on Pennsylvania’s Commonwealth Court on Wednesday tried to sort out the standard that the state government must meet to lease parks and forests for shale gas extraction without violating its responsibility to protect public natural resources.

That tricky balance was the focus of oral arguments in a 2-year-old case challenging the constitutionality of the state’s recent practice of signing gas leases on state conservation lands to raise money for general government spending.

The state’s plan to raise $95 million for the general fund this fiscal year by signing gas leases under state parks and forests is on hold until the court rules on the merits of the case.

Commonwealth attorney Sean Concannon said Pennsylvania has met its obligations as trustee of the state’s publicly owned natural resources through the protections built into the leasing program. He said the environmental rights defined in the state constitution do not limit how the government can spend money from gas leases.

But the judges seemed doubtful that environmental considerations were foremost, or even fully debated, during the state’s rush to raise money through several rounds of gas leases to take advantage of the Marcellus Shale boom.

The state’s conservation agency, the Department of Conservation and Natural Resources, “did not recommend further leasing, from an environmental viewpoint,” Judge P. Kevin Brobson said. Instead, the agency came up with standards to manage the risks of leases they were directed to sign by governors and legislatures.

“What DCNR tried to do was make lemonade out of lemons,” he said.

Economic, not environmental, reasons also motivated the General Assembly to change a decades-old law that required money from oil and gas extraction in state forests to be used only for conservation projects, President Judge Dan Pellegrini said. The law was amended in 2009 and 2014 to give legislators the power to decide how to use the funds.

“The money drove the change,” Judge Pellegrini said. “They needed money in the general fund, so they leased the land.”

John Childe, attorney for the Pennsylvania Environmental Defense Foundation, which brought the case, argued that the government can’t use its authority to create policy or balance budgets to violate its constitutional obligation to conserve and maintain Pennsylvania’s public natural resources.

He suggested that the power to decide whether to lease should be left with DCNR.

The judges asked what test the state should use to determine if it has met its constitutional obligations and whether the environmental advocacy group’s proposed standard might prohibit leasing entirely.

“If DCNR doesn’t make that determination, this valuable natural resource is untapped and serves no one?” Judge Brobson asked.

About 700,000 acres of state forest are available for natural gas development, either through DCNR leases or private leases in places where the gas rights beneath the forests are not owned by the state. Under the state’s current contract terms, an additional 32,000 acres would need to be leased to raise the $95 million projected in the state budget.

The judges did not give any indication of when they will rule on the case.

Laura Legere:

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via Court to hear shale gas challenge.