The Pennsylvania Supreme Court held unconstitutional several key provisions of Act 13—the legislature’s broad amendment to the Pennsylvania Oil and Gas Act. The Supreme Court invalidated Section 3304 of Act 13, which placed limits on the regulatory authority of local governments. The Commonwealth Court had previously determined that Section 3304 violated substantive due process because the measure would require local governments to amend existing zoning ordinances and permit incompatible land uses within existing zoning districts, which did not protect the interests of neighboring property owners. The Supreme Court affirmed the Commonwealth Court’s findings on the grounds that the limitation on local governments violated the Environmental Rights Amendment at Article 1, Section 27 of the Pennsylvania Constitution.

The Supreme Court also invalidated Section 3303, which sought to occupy all environmental regulation of oil and gas operations, and preempt any existing or future local ordinances regulating the industry. Sections 3305 through 3309 were enjoined to the extent that they enforced certain invalidated portions of Act 13. Sections 3305 through 3307 and 3309 created a commission to provide advisory opinions and review local ordinances, and created a private cause of action for aggrieved parties to seek invalidation or enjoin enforcement of non-compliant local ordinances with the Commonwealth Court. Section 3308 made municipalities with non-compliant local ordinances ineligible to receive funds collected from unconventional gas well fees (provided by Chapter 23 of Act 13) until such local ordinances were repealed, amended or found compliant on appeal.

The Commonwealth Court had determined that Section 3215(b)(4), providing the mandatory waiver of setback provisions from water, was null and void for its lack of guidance provided to the Department of Environmental Protection (“DEP”) in administering the legislative policy. The Supreme Court affirmed, holding that all of Section 3215(b) must also be enjoined because the waiver of setback provisions were not severable from the rest of the subsection. Additionally, the Court enjoined enforcement of Sections 3215(b) through (e) because the sections were not severable from invalidated Sections of Act 13.

As a result of this ruling, there are no defined setbacks from surface waters or wetlands under any Pennsylvania statute, including Act 13. Other mechanisms to promote regulatory uniformity invalidated by the Court create areas of regulatory uncertainty going forward. It is likely that the ruling will significantly increase the probability of regulatory roadblocks and disputes at local levels. Furthermore, the ruling creates uncertainty for well permit applicants and government agencies throughout the well permit approval and review processes.