Drillers use a technique called hydraulic fracturing (aka “fracking”) to extract natural gas from the Marcellus Shale formation. A complex set of regulations – overseen by a number of government departments and agencies, including the U.S. Environmental Protection Agency, Pennsylvania Department of Environmental Protection, River Basin Commissions and other state and local entities – apply to the exploration and extraction of the gas, as well as to the handling, storage, transportation and disposal of waste materials that result from the fracking process.
Fox Rothschild’s environmental practice group is well-acquainted with the federal and state environmental statutes and regulations that govern all aspects of the Marcellus Shale. Our group includes a former PADEP Deputy Secretary, as well as the immediate past chair of the Environmental and Energy Section of the Pennsylvania Bar Association. We have helped clients complete the permitting process and can advocate on their behalf in permit appeals or enforcement matters. We can help clients obtain water and waste permits, air permits, as well as permits needed for construction, such as NPDES stormwater construction permits, wetlands permits and E&S approvals. We can also defend third-party and toxic tort litigation, as well as handle criminal prosecutions that may arise out of Marcellus Shale activities.
Real Estate and Land Use
In-depth knowledge of federal, state and local real estate and land use law is critical in connection with development in the Marcellus Shale formation. Fox’s real estate and zoning/land use attorneys have extensive experience in leasing, acquisition, land use and zoning, along with construction and real estate-related litigation. We provide assistance to land owners negotiating lease and royalty agreements with almost every major gas company involved in the Marcellus Shale gas play, and we work with developers looking to construct warehouses, housing and other necessary amenities to accommodate the influx of jobs and increased economic activity arising out of the extraction of the natural gas.
Litigation arising out of Marcellus Shale activities can take many forms, including permit appeals, civil and criminal enforcement proceedings, contamination and toxic torts, as well as commercial litigation and condemnation. Our Pennsylvania litigation team – part of the firm’s national network of more than 200 trial attorneys – represents clients in the full range of judicial, regulatory and administrative proceedings. Our group includes a former Assistant Chief of the Environmental Crimes Section of the U.S. Department of Justice who served as lead counsel for the U.S. in the Exxon Valdez Alaska oil spill. We routinely defend permits in matters before the Pennsylvania Environmental Hearing Board, which reviews DEP permit decisions, and one of our partners is a member of the EHB Rules Committee. We also defend clients in suits arising out of soil and groundwater contamination, and we have successfully litigated claims for property damages and diminution in property value. Additionally, we have one of the most well-regarded and successful condemnation practices in Pennsylvania and represent property owners subject to condemnation proceedings to help ensure maximum recovery.
Tax and Estates
A recent study found Pennsylvania landowners were paid $1.8 billion by gas companies for lease and royalty payments in 2009. That same study estimated the gas companies will pay Pennsylvania landowners an estimated $250 billion over the life of the Marcellus Shale gas play. Fox’s trusts, estates, and tax lawyers work with those Pennsylvania landowners to address federal, state and local tax and estate issues, ensuring clients receive the maximum after-tax benefit from their lease and royalty payments.
Public Utilities Commission
Jurisdiction over Marcellus Shale activities also resides with the Pennsylvania Public Utilities Commission (PUC). Under the recent statutory revisions to the Oil and Gas Act (HB1950), the PUC has been given the authority to issue advisory opinions to drilling companies and others on whether local land use and zoning ordinances are preempted by state law, including the power to award attorneys fees to the prevailing party. We have PUC practitioners with a long history of success at the Commission. One of our partners is on the Course Planning Board for the annual Pennsylvania Power Law Conference, the premier program in the Commonwealth regarding PUC legal practice.
Many landowners in the Marcellus Shale region are nonprofit hunting clubs, social clubs or other organizations with members interested in receiving the economic benefit that results from lease of the club’s land and receipt of royalties from gas production. Our attorneys are well-versed in issues impacting such nonprofit organizations and are experienced in helping these groups formulate structures that allow members to receive these benefits in a tax-efficient manner.