Oil, Gas and Another Questionable Environmental Rights Amendment Resolution in Pennsylvania

I recently wrote a column for Pennsylvania Law Weekly Legal Intelligence, republished on this blog here, raising questions about whether the Pennsylvania courts have correctly identified the public natural resources to be valued and conserved as a body of public trust established by the Environmental Rights Amendment to the Pennsylvania Constitution. In a series of litigation decisions brought by the Environmental Defense Foundation of Pennsylvania, the Commonwealth Courts of Appeals grappled with whether, how much revenue from the rental of oil and gas resources lurking in state parks and forests should be allocated for restricted conservation purposes, and how much could be allocated to the general fund. Courts treat oil and gas as important trust assets, not surface resources.

The Third Circuit Court of Appeals has looked, at least indirectly, and the problem persists. in Yao vs. Del. R. Basin Comm’n, No. 21-2315 (3d Cir. September 16, 2022), the Court affirmed dismissal for failure to challenge by certain Republican members of the General Assembly and the Republican Senate the ban on bulk hydraulic fracturing in the Delaware River Basin imposed by the Delaware River Basin Commission, which is Interstate commission. However, Wayne and Carbon counties and two towns in Wayne County were joined by lawmakers.

The two counties and towns confirmed that they were trustees of public natural resources within their states under the Environmental Rights Amendment. The Court of Appeal agreed. The municipalities then asserted that they had the ability to challenge the reasonableness of the ban because it interfered with their ability to manage the fund’s assets for the benefit of the fund’s beneficiaries. That is, some of the oil and gas in Wayne and Carbon counties are public natural resources. Producing this oil and gas – as well as private oil and gas – will save money for cities and provinces that can be used for conservation purposes. However, municipal governments, in their capacity as trustees, have been denied by the DRBC ban their ability to exercise their discretion with respect to permitting oil and gas development, and thus have been compromised in fact and position to challenge DRBC regulation.

The Court of Appeal disputed this, arguing that allowing this capacity would “turn around [the ERA] ‘Upside down’. . . . The Court held that the objective of the Reinvestment in Natural Resources Act was to conserve public natural resources, and that granting status because the municipality might wish to sell some of these resources would be contrary to the amendment even if the proceeds of the sale were to go back to the trust.

But this view treats oil and gas in the ground as if it were important for the purposes of the public trust in the ERA. Arguably, what matters under the ERA are the environmental features that provide “clean air, clean water and . . . the natural, landscape, historical and aesthetic values ​​of the environment.” It may be argued that trustees are obligated to exercise independent judgments about whether the disposition of certain trust assets that do not provide any of these values ​​- such as oil and gas in the ground – would better enhance the trust group’s ability to advance those values. It is not clear why this does not give the right to appeal a ban. Consider, for example, whether DRBC has prohibited the installation of any concession kiosks on any land park in Philadelphia (which is in the aquarium). Maybe that’s a good idea, but shouldn’t the city have a place to challenge the commission’s ruling?

Oil and gas cases may not be the best ERA cases to bring. This was indirect and perhaps inevitable, but we do not make the most coherent law by placing public natural resources a mile underground and centralized under an environmental constitutional clause.

© 2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, No. 265

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