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Judge Rejects Town’s Ban on Waste Disposal Wells

(CN) - A federal magistrate judge invalidated key parts of a local ordinance adopted by a small Pennsylvania town intent on blocking the disposal of oil and gas drilling waste within its borders.

Grant Township is a rural community of less than 300 households located about 50 miles northwest of Pittsburgh.

In 1997, the Pennsylvania General Energy Corp., put a deep gas well into production on a Grant Township property known as the Yanity Farm, and in the spring of 2014, applied for state and federal permits to convert it into an underground injection well.

According to the company, which specialized in the exploration and development of oil and gas resources, it plans to inject "produced fluids" from its other oil and gas operations into the well.

In response, the township enacted a "Community Bill of Rights" in June 2014 to prevent oil and gas concerns -- specifically, the Pennsylvania General Energy -- from "engag[ing] in the depositing of waste from oil and gas extraction" within the town's borders.

It also purports to invalidates any "permit, license, privilege, charter, or other authority issued by any state or federal entity which would violate [this provision] or any rights secured by [the Community Bill of Rights Ordinance], the Pennsylvania Constitution, the United States Constitution, or other laws," court documents say.

Three months later, the utility was granted an U.S. Environmental Protection Agency permit, allowing it to convert the town's Yanity Well from a gas production well into an injection one.

Residents of the township were livid, claiming the utility and the agency were violating its constitutional right "to local self-government," claiming the gas deposit procedures infringe upon its citizens' "right to make decisions about what happens to the places where we live."

The town's position was made plain in the words of the ordinance itself which said, "All residents of Grant Township possess the right to a form of government ... which recognizes that all power is inherent in the hands of the people."

Their only desire, the townspeople said, was to protect the "unspoiled vistas and a rural quality of life" of the area, which they see as their sovereign right.

Pennsylvania General Energy sued the township on Aug. 8, 2014, claiming that it had no authority to adopt the ordinance in the first place as it violates the Supremacy Clause of the U.S. Constitution, and the corporation's rights under the 1st and 14th Amendments.

On October 15, U.S. Magistrate Judge Susan Paradise Baxter tossed Grant Township's motion to dismiss the case in its entirely, while granting, in part, Pennsylvania General Energy's motion for ruling on the pleadings.

In addressing the township's motion to dismiss the suit, Baxter found the municipality wrongly focused its pleadings on the end the plaintiff is seeking 00 use of the well for storage and injection purposes -- and "lost sight of the constitutional challenges before this Court."

"As president in the Amended Complaint, the issue is not whether PGE should be permitted to store and inject oil and gas materials within Grant Township, but rather whether the Community Bill of Rights Ordinance enacted by Grant Township infringes on Plaintiff's federal constitutional rights, and violates, or is preempted by, state law," she wrote.

"Rather than engage in the proper inquiry, Defendant attempts to re-write Plaintiff's pleading by shifting the focus of the inquiry ... Defendant also does not engage in the required legal standing analysis for each of Plaintiff's claims. Instead, Defendant's motion to dismiss takes a one-size-fits-all approach to standing in this case."

In sum, Baxter said, Grant Township should have address the issues of injury-in-fact, causation, and redressability for each of the 13 claims the oil and gas company made in its complaint, but the municipality simply did not do that.

As for the parties' separate requests for a decision on the merits of their pleadings, Baxter found that several sections of the Community Bill of Rights Ordinance could be struck down because the township lacked the legal or legislative authority to enact them.

But Baxter stopped short of tossing the case in its entirety, leaving open the question of whether the surviving provisions of the ordinance are preempted by the Pennsylvania Oil and Gas Act.

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