Range Resources Challenges South Fayette's Drilling Law

- Range Resources Challenges South Fayette's Drilling Law

Wednesday, August 17, 2011
Knight Ridder/Tribune Business News
by Mike Wereschagin, The Pittsburgh Tribune-Review

A natural gas company has asked South Fayette's zoning board to overturn a 2010 law it says enacts a de facto ban on drilling in the township.

Range Resources petitioned the board on Tuesday, saying the restrictions strip the company's right to drill on 4,000 acres it has leased in the township. South Fayette's ordinance, enacted on Nov. 15, bans drilling within certain distances of homes, schools, streams, ponds, gas stations, mobile home parks, day cares, hospitals and nursing homes. The distances range from 300 feet to 2,500 feet.

Add each restriction together -- plus the requirement that the land on which drilling takes place be at least 10 acres -- and it covers the town's entire land mass, Range spokesman Matt Pitzarella said.

"You can't (drill in South Fayette). It can't be done," Pitzarella said.

One of the law's chief supporters said the legislation leaves land open to drilling -- just not some of the land Range has leased.

"Their problem is they bought their way into some land that's right in the middle of the community," said Keith McDonough, head of the anti-drilling group Friends of South Fayette. McDonough said he wanted to ban drilling in the town, but state law forbids it. "The entire western border (of South Fayette) that borders Cecil Township, which is heavily drilled, is all permissible. I wish that weren't the case, to be honest with you, but it is."

The conflict arises as municipalities around the state are crafting their own drilling regulations -- something Range worries will lead to an unpredictable and costly patchwork of restrictions on its business. There are 2,565 municipalities in Pennsylvania.

The Pennsylvania State Association of Township Supervisors in December published a model zoning ordinance for towns to use, although it doesn't recommend the size of buffer zones.

Just across the state line, a Morgantown judge struck down that city's drilling ban on Friday, saying it illegally pre-empted state law. Range says in its complaint to the South Fayette zoning board that Pennsylvania law also doesn't allow towns to ban drilling.

But the Pennsylvania Supreme Court has allowed municipalities to restrict drilling to certain areas by using zoning ordinances, said Myron Arnowitt, state director of environmental group Clean Water Action.

Arnowitt called South Fayette's ordinance "one of the best ... in the region." He said he wasn't sure whether it was legal to use zoning rules to ban drilling, and said he didn't know whether South Fayette's law amounts to such a de facto ban.

According to one South Fayette commissioner, "it's arguable" that it does.

"By limiting drilling to a very limited amount of zones, as South Fayette does, it does severely impact drilling operations," said Sue Caffrey. She said the ordinance was an emotional reaction to widespread drilling opposition in the town. Rather than solving difficult problems about how to safely regulate drilling, she said, "it kind of skirts that issue through zoning."

"I voted for it, and it is the one vote in my 12 years I regret making," Caffrey said.

The zoning board operates independently of the five-member board of commissioners. Whichever side the zoning board takes on Range's petition, the decision could wind up in the Court of Common Pleas.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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Marcellus Shale Driller Fighting South Fayette Ordinance

- Marcellus Shale Driller Fighting South Fayette Ordinance

Wednesday, August 17, 2011
Pittsburgh Post-Gazette
by Erich Schwartzel

Range Resources made a significant move Tuesday in what is likely the first step in a legal challenge to the wave of small-town regulations on natural gas drilling in the Marcellus Shale.

The Fort Worth, Texas-based company filed an appeal to the zoning hearing board of South Fayette that calls its drilling ordinance an "illegal" infraction against the company's business pursuits.

Range Resources says the township's zoning ordinance enforces buffer zones around schools, hospitals and certain commercial areas that force a de facto moratorium on drilling throughout the entire township.

That violates the portion of Pennsylvania's Municipalities Planning Code that requires all municipalities to "allow for reasonable development of minerals" as part of any zoning ordinance, the company said.

The matter is before the zoning hearing board because the drilling regulations involved the township's zoning ordinance.

A date for the zoning hearing has not been set, but Range Resources spokesman Matt Pitzarella said his company will take the issue to the Court of Common Pleas and up the legal ladder if it is rejected by the South Fayette authorities.

If Range Resources wins a ruling in a higher court, it could create a precedent and threaten to overturn scores of small-town ordinances across Pennsylvania.

Throughout Western Pennsylvania, townships have passed ordinances that further regulate drilling beyond state law or take steps to mitigate side effects like road damage or noise control.

Range Resources owns approximately 4,000 acres in South Fayette but has not drilled any Marcellus wells. The ordinance was approved last November after more than a year of public hearings and input from energy companies, including Range Resources.

South Fayette solicitor Jonathan Kamin said the ordinance still allows drilling in "many zoning districts" throughout the township -- they just might not be in the convenient areas that Range Resources would prefer.

"Everyone has recognized that this is a use that cannot be banned," said Mr. Kamin.

Local communities like South Fayette have drafted conditional use ordinances to deal with natural gas drilling, which require every well site to undergo an approval process prior to drilling.

Energy companies say the site-specific requirements make as much sense as requiring a new driver's license in every town, and that the process slows predictability in an industry that plans years in advance.

"It's death by a thousand paper cuts," said Mr. Pitzarella.

The South Fayette ordinance enforces regulations that are already in place as part of the Pennsylvania Oil and Gas Act, and Range Resources says that regulatory double-dipping is illegal.

"[South Fayette] unlawfully seeks to achieve the same purposes and to regulate the same features of the development of oil and natural gas which are regulated exclusively and comprehensively by the Commonwealth," the appeal states.

Range Resources said the conditions of the ordinance are a "de facto taking" of land that make it impossible to drill. The company says this violates the Fifth Amendment of the U.S. Constitution, which says private property cannot be taken for public use "without just compensation."

With the ordinance in place, Range Resources calculated the potential loss to the company and its leaseholders in South Fayette to be nearly $200 million.

Range Resources has already challenged local ordinances that it interprets as going too far. During deliberations for a conditional use ordinance in Mount Pleasant last April, the company sent a letter to residents threatening to move into "more cooperative communities" should the ordinance pass.

That ordinance did pass in June, and Range Resources has kept its promise to not drill any new wells in Mount Pleasant as long as it stays in place.

The appeal filed Tuesday in South Fayette is the latest in a series of recent challenges to local drilling regulations. Earlier this month, Pittsburgh Mayor Luke Ravenstahl refused to sign a city council measure that would have banned drilling within Pittsburgh city limits, and a similar ban in Morgantown, W.Va., was overturned by a judge last Friday.

Copyright (c) 2011, Pittsburgh Post-Gazette

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Southern Bay Preps for Fracking Ops at Fayette Well

- Southern Bay Preps for Fracking Ops at Fayette Well

Friday, June 10, 2011
ureka Energy Ltd.

Eureka provided an update on drilling at the Blackjack Springs Unit 1H, the first well at its Pan de Azucar Eagle Ford Shale project in Fayette County, on-shore Texas USA. As per the latest Operator reports, the well has successfully reached a Total Depth of 16,680 ft, and has been subsequently cased and cemented in preparation for fracking operations.

Mr. Ian McCubbing, Chairman of Eureka stated that, "We are very pleased to have reached this key milestone with the well, and look forward to the fracking operations being undertaken which will provide us with important productivity information in the Pan de Azucar acreage. This is a significant step in the Company's appraisal and development strategy for what is its first exploration activity outside of the Sugarloaf AMI."

The well which was drilled by the Operator, Southern Bay Operating, LLC, a wholly-owned subsidiary of GeoResources Inc., achieved a horizontal section of approximately 6320 ft., and was drilled through the main target zone of the Eagle Ford Shale in accordance with the drilling plan.

The fracture stimulation operations are expected to be undertaken within the next few weeks, immediately after the Operator has completed fracture stimulation operations on its two Flatonia wells located less than 10km south west of Eureka's Pan de Azucar area.

The Blackjack Springs Drilling Unit is a 916 acre pooled unit to which Eureka has contributed 86 acres for its 9.4% working interest. The unit is immediately adjacent to the remaining 675 acres (EKA WI 100%) that make up the balance of the Pan de Azucar project.

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Southern Bay Starts Drilling in Fayette County

Southern Bay Starts Drilling in Fayette County

Friday, April 29, 2011
Eureka Energy Ltd.

Eureka announced the spudding of Blackjack Springs Unit #1H, the first well at its Pan de Azucar Eagle Ford Shale project in Fayette County, on-shore Texas USA.

As of April 27, 2011 local time, the operator, Southern Bay advised that the well had reached a depth of 2,080 ft and was drilling ahead. The well is planned to target the Eagle Ford Shale at a vertical depth of approximately 10,500 feet with a horizontal of around 6,000 feet.

The Blackjack Springs Drilling Unit is a 916 acre pooled unit to which Eureka has contributed 86 acres for its 9.4% working interest. The unit is immediately adjacent to the remaining 675 acres (EKA WI 100%) that make up the balance of the Pan de Azucar project.
The operator, Southern Bay, is a wholly owned subsidiary of GeoResources Inc.