Decisions to lease state park and forest land to natural gas drillers lies with the Department of Conservation and Natural Resources, not the Governor’s office, according to a decision issued today by the Commonwealth Court. The court also ruled that the General Assembly can decide how to spend the royalty money generated from current and future leases. Up until 2009, proceeds from oil and gas drilling on state land were funneled directly back into the Department of Conservation and Natural Resources through the oil and gas lease fund. But as Marcellus Shale drilling ramped up, and the money multiplied, the legislature used much of it to balance the budget.
Governor Corbett’s energy secretary Patrick Henderson called the decision a “resounding victory for the Commonwealth.” “We’re extremely happy with the court’s recognition of the authority of the executive and the legislative branch,” Henderson told StateImpact.
Today’s Commonwealth Court en banc decision, written by Judge Kevin Brobson, stems from a case filed back in 2012 by the Pennsylvania Environmental Defense Foundation seeking to halt all drilling in state forests. It also challenged how the drilling royalties were spent.
John Childe, the environmental attorney who brought the case, argued that the state’s environmental rights amendment prevented the General Assembly from using the funds for anything other than environmental conservation. But in a unanimous decision the seven Commonwealth Court judges disagreed.
Childe also wanted the court to rule that both former Governor Ed Rendell and Governor Corbett violated the state constitution by leasing land to drillers. The court did not do so.
The court did however, rule that the Conservation and Natural Resources Act put the decision on whether and how to lease public land squarely within the purview of the Department of Conservation and Natural Resources, not the Governor’s office.
Under the direction of Governor Rendell, DCNR leased 132,000 acres to Marcellus Shale drillers despite opposition from the agency’s leadership. Just before leaving office, Rendell then issued an executive order placing a moratorium on future leases. But Governor Corbett lifted that moratorium last year, while saying the new leases would prohibit any surface disturbance. For now, the issue seems moot because incoming Governor-elect Tom Wolf opposes any new leasing of public land.
Patrick Henderson, Corbett’s energy secretary, says the court’s order to place leasing decisions within DCNR rather than the Governor’s office, simply maintains the status quo.
“There has never been a scenario where we have said [to DCNR officials] go lease this or that, and here are the terms,” said Henderson. “When we put our own executive order [to lease land] in place, we didn’t say to DCNR ‘go forth and lease.’ We said, here’s our criteria by which to consider leasing. It was a policy matter.”
The Commonwealth Court also weighed in on the environmental rights amendment. The little known section of the state constitution became relevant for the first time earlier this year when the Supreme Court upheld challenges to the state’s new oil and gas law in Robinson Township v. Commonwealth. The decision took the legal community and industry officials by surprise, and many are wondering how that decision will continue to play out in court. In Wednesday’s order and opinion, Judge Brobson repeatedly referred to the Robinson Township decision, and earlier cases, saying the environmental rights amendment had to be balanced with competing interests. He writes that DCNR is qualified to carry out the terms of the environmental rights amendment regarding the leasing of public lands.
“These types of lease provisions are certainly critical, as they, like the web of state and federal regulations that govern the manner by which natural gas may be extracted, are designed to reduce the risk of harm to the environment and impose remediation obligations on the lessee in the event of damage to our Commonwealth’s natural resources. As it did in the prior lease sales during the Marcellus Shale era, however, DCNR must also consider whether even entering into further leasing would be in the best interests of the Commonwealth and consistent with the rights, duties, and obligations embodied in the Envlronmental Rights Amendment.”
Pennsylvania Environmental Defense Foundation attorney John Chiide says he plans to appeal the decision to the Supreme Court. Childe said he wants the court to rule that the current leases, issued under the Rendell Administration are unconstitutional.