On June 7, 2017, the Commonwealth Court upheld a zoning ordinance allowing oil and gas drilling in mixed use agricultural and residential areas of a Butler County municipality because the pre-existing zoning code had already allowed construction of what the Court found were substantially similar public utility structures. 

The issues in Delaware Riverkeeper et al. v. Middlesex Township Zoning Hearing Board v. R.E. Gas Development LLC et al., 1229 CD 2015, 1323 CD 2015, 2609 CD 2015, arose out of Middlesex Township’s Ordinance 127, enacted in 2014, which sought to add a “oil and gas well site development” use within a Residential-Agricultural (“R-AG”) District. Environmental groups, the Clean Air Council and the Delaware Riverkeeper Network, appealed the Middlesex Township Zoning Hearing Board’s enactment of the ordinance, upheld by the Butler County Court of Common Pleas, which found in part that the added language was a permissible extension of the already existing zoning provisions.

Prior to enacting Ordinance 127, in 2012 the Township enacted Ordinance 125 creating a mixed residential and agricultural zoning district, in part to limit suburban growth in the area. Ordinance 125 contained language allowing for the use of “public utilities, except buildings.” In August of 2014, the Middlesex’s Board sought to “expressly provide for the use and regulation of oil and gas operations within the Township.” Ordinance 127 added the terms “oil and well gas site development” defined as “well location assessment, including seismic operations, well site preparation, construction, drilling, water or fluid storage operations, hydraulic fracturing and site restoration associated with an oil and gas well of any depth.” A month later, the Pennsylvania Department of Environmental Protection (“DEP”) issued well permits for drilling on one resident’s farm, and the Township granted his application for a zoning permit for the drilling. 

The environmental groups challenged the Ordinance on multiple grounds, claiming that (1) it violated Article 1, Section 1 of the Pennsylvania Constitution as it was not designed to “protect the health, safety, morals and public welfare of its citizens” and was therefore not a valid exercise of police power, (2) it was irrational, injective incompatible industrial uses into a non-industrial zoning district, and (3) it infringed on the Environmental Rights Amendment (“ERA”) set forth in Article 1, Section 27 of the Pennsylvania Constitution, protecting citizens’ rights to clean air, pure water, and a healthy local environment. The Zoning Board held against them, finding in part that the testimony from a number of witnesses was not credible, the expert testimony was inadequate, the Board had authority to amend zoning ordinances under the Municipal Planning Code (“MPC”), and Section 603(i) of the MPC required that zoning ordinances provided for the reasonable development of minerals. The Board also found that Ordinance 127 did not violate the ERA as it appropriately balanced land owner’s rights and the public interest, by promoting preservation of agricultural land and preventing suburban sprawl.

The environmental groups appealed, and the trial court affirmed the Board’s decision. On appeal once more, the Commonwealth Court affirmed the lower court’s holding.

The first issue the Commonwealth Court looked at was whether Ordinance 127 raised the same problems as Act 13’s zoning scheme that was held to be invalid in Robinson I, as requiring the placement of industrial uses (oil and gas drilling) in districts set aside for non-industrial uses (residential and agricultural). In its analysis, the Court relied on its findings in Gorsline v. Board of Supervisors of Fairfield Township, 123 A.3d 1142, 1151-52 (Pa. Cmwlth. 2015), appeal granted, 139 A.3d 178 (Pa. 2016), currently up for review before the Pennsylvania Supreme Court, where the Commonwealth Court held that a proposed well pad use was consistent with other uses in that residential-agricultural district, as there were already four other gas well pads within the district at the time of the ordinance, and the proposed well was similar to a “public service facility” as already defined by the Township’s ordinance. The Court likened the addition of the “oil and gas well” language to the R-AG district to the “public service utility” use permitted as conditional use in the residential-agricultural District in Gorsline, as there were also already existing well pads in Middlesex Township prior to the enactment of Ordinance 127. Thus, the Court ultimately held that Ordinance 127 did not introduce an incompatible industrial use into the R-AG zoning district. The Court also found that the facts that the added language would further the goal of limiting suburban sprawl, which would in turn protect agricultural lands, and therefore the additional language was consistent with the use of the R-AG district.

Next, the Court rejected the environmental groups’ claims that the addition of the oil and gas language would make the Ordinance inconsistent with the Township’s Comprehensive Plan and violated the requirements of section 604 of the MPC, which sought to prevent the loss of health and life, finding that other sections in the MPC also required the preservation and promotion of agricultural land, as well as the reasonable development of minerals and a balancing between overall community growth. The Court also rejected the environmental groups’ argument that the construction activity related to the “oil and gas well site development” would harm the residents was misplaced because zoning regulates the use of land and not the particulars of development, citing Gorsline.

The Court then addressed whether the trial court properly applied the three-part test for assessing compliance with the under Payne v. Kassab, 361 A.2d 263, 246 (Pa. 1976). The Court, affirming the trial court’s findings, held that Ordinance 127 met the factors delineated in Payne. The court reasoned that the first prong, whether there was compliance with all applicable laws relevant to the protection of natural resources, was met, as any person intending to engage in oil development must still comply with a number of permitting requirements under the ordinance. As to the second prong, the Court found there was a reasonable effort to reduce environmental incursion as oil and gas development is specifically excluded from zoned residential districts, and only allowed in the more appropriate R-AG district. Finally, the third prong of the Payne test was met as the Court found that the effect of Ordinance 127 properly balanced the benefits of preserving agriculture, as the Ordinance would in effect limit harmful suburban growth. Thus, the any environmental harm did not clearly outweigh the benefits to be derived from the enactment of the Ordinance, and all of the elements of the Payne test were satisfactorily met.

Finally, environmental groups argued the Board abused its discretion in excluding certain evidence. The Commonwealth Court also affirmed the lower court’s finding in this respect, giving deference to the Board’s findings on the evidence and testimony credibility. The Commonwealth Court also found that the Board did not abdicate its fact finding role as required by section 908(9) of the MPC, as the Board made specific findings relative to the environmental group’s claims, which the Court found sufficiently explained the Board’s opinion.

It remains to be seen whether this analysis, being similar to that as laid out in Gorsline, will be upheld as Gorsline is currently up for review at the Supreme Court. In the meantime, it seems that the Commonwealth Court continues to strongly defer zoning considerations and decisions to the municipal entities charged with that duty.