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Wednesday, May 28, 2014
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Update: The Yale-Pace Local Governance of Shale Oil and Gas Development Project

By Guest Author, Christopher Halfnight, Yale F&ES '15

Unconventional oil and gas development is fundamentally changing the U.S. energy landscape, bringing both new challenges and new opportunities.  Federal and state laws regulate some aspects of the shale oil and gas development life-cycle, but the pace and scale of shale plays in states from Pennsylvania to Texas to North Dakota risks a host of potential impacts at the local level – impacts that may fall through a governance gap without effective exercise of municipal land use and zoning authority.

Researchers at the Yale Center for Environmental Law & Policy and the Land Use Law Center at Pace Law School, with support from the Oscar M. Ruebhausen Fund at Yale Law School and the Yale Climate and Energy Institute, are leading an outreach, analysis, and guidance effort to help address this potential shale gas governance gap at the local level.  As outlined in the team’s White Paper, outright bans on fracking risk state preemption, while uncontrolled drilling risks negative community and environmental impacts.  The project team aims to support municipal leaders in developing sound, balanced, and effective local regulatory, non-regulatory, and planning practices to address the impacts of shale oil and gas development.  With the proper tools, local authorities can effectively govern many aspects of fracking by better interfacing with state regulators and industry, or exercising local powers to mitigate land use impacts and environmental damage, while ensuring safeguards for net economic, social, and community benefits.

As part of this ongoing effort, the Yale and Pace team recently convened a facilitated discussion at Yale Law School with diverse stakeholders from industry, advocacy, government, and academia.  Titled “Closing the Shale Gas Governance Gap,” the session in late March focused on local strategies and best practices for governing unconventional oil and gas development.  The team’s research is turning up novel and notable examples of local regulation of fracking – overlay zones, parcel size restrictions, insurance requirements, and noise limits, to name just a few.  We sought to enhance and expand our efforts through collaborative discussion with a group of experts from the field.

Professor Hannah Wiseman from Florida State University College of Law opened the discussion with an overview of current federal and state regulatory efforts, highlighting potential impacts and governance gaps at the local level.  Participants then heard from three distinguished speakers with firsthand knowledge of local government attempts to address the impacts of fracking.

John Smith, Solicitor for Cecil Township in Pennsylvania and attorney for the municipalities in the recent Pennsylvania Supreme Court case Robinson Township v. Commonwealth, spoke of a wide range of local challenges in the communities he represents, from water use to road traffic, and silica dust to seismic testing.  Attorney Smith also discussed unique strategies in Cecil Township, including local ordinances requiring sound walls around drill sites and advance notice of drilling.

Similarly, Terrence Welch, Partner at Brown & Hofmeister LLP, in Richardson, Texas, offered valuable perspective on crafting the Dallas local ordinance governing oil and gas development in an urban and suburban setting in the Barnett Shale region of north Texas.  Public attention in the nearby suburb of Flower Mound focused heavily on the issue of setbacks, and local government experience there highlighted the importance of property value studies to justify those setbacks, as well as the need to anticipate variance claims, the threat of takings lawsuits, and issues unique to parkland.

Lastly, Stephen Ross, formerly the County Attorney for Santa Fe County, New Mexico, discussed Santa Fe’s recent gas development ordinance, providing unique insight into the county’s efforts to facilitate public participation, initiate a temporary moratorium, draft general plan amendments, and build a collaborative interaction with state government.

Through these presentations and the discussion that followed – moderated by Professor John Nolon from Pace Law School – two clear lessons emerged: local governments have the legal capacity to address many impacts of hydraulic fracturing and they exhibit a wide variety of approaches and strategies.  The team is using these lessons to bolster and guide future efforts.  With the right tools, local governments can play a large role in filling the shale governance gap; leading practices and robust training will help prepare municipal leaders as they grapple with the challenges and opportunities of a shale oil and gas play.

The March workshop represented a key step forward in the project team’s ongoing efforts to help local governments address the impacts of hydraulic fracturing.  The discussion built on our December 2013 expert panel and workshop at Pace Land Use Law Center’s Annual Conference which aimed to test the governance-gap hypothesis: that federal and state regulatory schemes are failing to address a range of local impacts from hydraulic fracturing.

At that workshop, a diverse group of stakeholders collaborated to identify and discuss potential impactsand concerns at the local level, ranging from the positive effects of increased economic activity, to risks of water contamination, air pollution, and pressure on local roads and services.  The impacts of unconventional oil and gas development vary according to local factors.  But the group at the December session emerged with a strong a consensus that federal and state regulatory measures are often inadequately addressing those impacts – a consensus that helped transition the project toward identifying local strategies and best practices.

The Yale and Pace team is excited to continue building on our collaboration with expert participants from these two workshops.  As we refine our research on leading practices for local governments, the project team is shifting toward fashioning a comprehensive suite of tools and a robust training program to equip local leaders with the knowledge and capacity to deal confidently with hydraulic fracturing.  With multiple-stakeholder input, we aim to empower local communities to chart an informed and responsible path through the potential benefits and risks of fracking.

We expect to develop a variety of tools and programs in the coming months.  Expanding on our research and outreach to date, the team is creating a thorough guide to potential impacts and issues that local governments may face and may wish to address – including rising local government revenues from sources such as sales taxes, property taxes, or state-collected severance taxes, booming real estate markets, new bunk-housing, well fires, pipeline breakage, seismic testing, and flaring noise.  This substantive framework and checklist will help orient communities to the various benefits and risks of fracking, including potential environmental, health, and socio-economic impacts that municipal leaders will need to evaluate.  Grounded in research and case studies such as those discussed in the March workshop, this issues framework will also provide a substantive foundation municipalities can use to justify potential regulatory and non-regulatory actions.  With a solid knowledge base tailored to local conditions, municipal leaders will be better positioned to effectively manage gas development and to engage industry and state regulators in productive dialogue.

We also intend to continue building on the March workshop to complement the issues framework with detailed strategic options and alternatives for local governments tailored to each of the potential impacts.  We anticipate including leading practices for both regulatory and non-regulatory strategies, drawing from our previous facilitated discussions and further research and collaboration.  The procedural options framework may include model planning and zoning documents, such as comprehensive development plan amendments to address unconventional oil and gas development, special use permits, and draft ordinances focusing on setbacks, use restrictions, overlay strategies, insurance requirements, noise limits, and other aspects within the purview of local government.  As a counterpart to regulatory options, the framework will also include non-regulatory strategies and templates, such as policy statements, funding strategies, model road use agreements, community benefit agreements, processes for seeking better support from state regulators, and other means of securing local advantages from shale gas development while safeguarding against potential negative effects.  These non-regulatory strategies can help communities work collaboratively with industry to ensure baseline testing, high performance standards, post-development bonding, and other local needs.

Ultimately, the team intends to communicate the entire package as part of a robust training program for municipal leaders – first as a pilot project and eventually at large.  We also expect to develop new mechanisms – potentially online – to distribute project materials and to facilitate communication between municipalities, particularly in regional frameworks to address cumulative impacts of gas development.  In so doing, we hope to promote dialogue between communities and industry, and between municipal and state authorities.

Our work to date – and the generous support of experts and sponsors – has positioned the Yale and Pace team to move forward with the next phase of addressing the local impacts of hydraulic fracturing, and is already receiving positive media attention. For better or worse, the shale boom continues.  Unconventional oil and gas development brings the prospect of significant economic gain for often-frail local economies, and the specter of long-lasting environmental harm and community detriment.  With the proper tools and knowledge base, municipal leaders will be better equipped to navigate an effective path between those two poles, mitigating potential negative impacts, while securing net economic and social community benefits.

Posted in: Environmental Law & GovernanceEnergy & Climate

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