Can the Pennsylvania Department of Environmental Protection (PADEP) issue a permit when confronted with a dispute regarding the applicant’s right to utilize the site of the proposed activity? Two occurrences this past month suggest that the answer may well depend on the statute under which the permit is issued.
In Rausch Creek Land, LP v. DEP and Porter Assoc., Inc., EHB Docket No. 2011-137 (Adjudication issued Oct. 11, 2013), the owner of a property appealed a surface mining permit issued to its lessee authorizing the lessee to reclaim previously mined areas of the property. Among other objections, the owner argued that PADEP erred in permitting the lessee to place coal ash in a certain pit located on the property because there was a legitimate dispute regarding the lessee’s legal right to use the pit.
The Pennsylvania Environmental Hearing Board (EHB) found that, while PADEP is not required to independently investigate whether a dispute exists in every case, once advised of such a dispute, PADEP “has a duty to look beyond the face of the permit application and assess whether the dispute is legitimate, i.e., whether the dispute puts the applicant’s right of entry in doubt.” If so, PADEP “must err on the side of caution” and “may not issue the permit, or may not issue it without an appropriate condition, until the dispute is resolved.” Here, where PADEP was aware that the lease governing the legal relationship of the parties was the subject of at least four lawsuits pending in state court, the EHB found that it was inappropriate for PADEP to adjudicate the legitimate property rights dispute between the parties and issue the permit without condition.
The EHB provided several justifications for this cautious approach, including respect for the rights of landowners. The EHB also noted that PADEP lacks the authority, resources, and expertise to resolve property disputes. Finally, the EHB observed that doubts regarding property rights should be resolved before an “irreversible” activity like mining is allowed to proceed. The EHB suspended and remanded the permit to PADEP to consider whether to postpone taking action on the application or include a permit condition prohibiting the use of the pit until the property rights dispute has been resolved.
Less than a week after the EHB handed down its adjudication in Rausch Creek, several media outlets reported that PADEP had issued a permit authorizing Talisman Energy to drill a natural gas well under unleased property in Susquehanna County. Upon learning of Talisman’s plans from a municipal official who had received statutory notice of the permit application, the property owners, who own all of their mineral rights and have declined offers to lease their land, advised PADEP of the property rights dispute. PADEP nevertheless issued Talisman the well permit.
Did PADEP’s issuance of the permit contravene the EHB’s adjudication in Rausch Creek? PADEP doesn’t think so. PADEP issued the surface mining permit appealed in Rausch Creek under Pennsylvania’s Surface Mining Conservation and Reclamation Act, more commonly known as SMCRA. In contrast, PADEP issued the well permit to Talisman under Pennsylvania’s Oil and Gas Act. As the EHB noted in Rausch Creek, PADEP is required to ensure that a permit applicant has the legal right to enter and commence coal mining activities within a permit area under SMCRA, see 52 P.S. § 1396.4(a)(2)(F); 25 Pa. Code § 86.64. The Oil and Gas Act, however, contains no analogous requirement regarding oil and gas activities. As PADEP explained in response to an inquiry from the property owner, “Neither the Oil and Gas Act nor [its implementing regulations at] Chapter 78 address leasing issues. Our review is based on the Act and the Regulations, which is exclusive of leasing issues.” And in comments to the Public Herald, Deputy Secretary of the Office of Oil and Gas Management Scott Perry stated, “[PA]DEP does not have the statutory authority to deny a well permit based on a property rights dispute.”
Given the publicity surrounding this issue, expect Pennsylvania lawmakers to consider expressly granting PADEP that authority in the near future.