Updated 8/22/2014  The long-dreaded monster of Forced Pooling has reared its ugly head in Lawrence and Mercer Counties. Most people who pay attention to Oil & Gas Law have focused almost entirely on the Oil & Gas Act, now replaced by Act 13. However, a much older law dating to 1961 called the Oil & Gas Conservation Law remains on the books. Supposedly, the Oil & Gas Conservation Law only applies below the Marcellus Shale — at “the Onondaga Horizon” and below, to be more specific. This law, never before invoked for unconventional oil & gas, includes a Forced Pooling provision. Forced Pooling amounts to a form of subsurface eminent domain, in which a driller can request “the Oil & Gas Conservation Commission” to issue a Well Spacing Order which may include an Integration Order. The Well Spacing Order allows many parcels to be developed together as a unit; the really nasty part is the Integration Order, which allows an unleased subsurface property to be integrated into the unit and fracked against the owner’s will. Pennsylvania now has its first case for shale under this law. The company asking for a Well Spacing Order is called Hilcorp Energy, a privately owned Texas company. The “producing interval” for this case is the Utica Shale, or to be more precise the “Utica-Point Pleasant Formation”. (This is the way it is described in Hilcorp’s application.)

The case became a bit convoluted even before getting started. The original Oil & Gas Conservation Law was amended, giving the duties of “the Oil & Gas Conservation Commission” to the DER (Department of Environmental Resources). Then DER was split into today’s DCNR (Department of Conservation and Natural Resources) and DEP (Department of Environmental Protection). But they were a bit sloppy when the Oil & Gas Conservation Law was first amended: rather than actually changing the wording of the law to amend “the Commission” to read “the Department”, the law still refers to “the Commission”. Figuring out what this means was left to the reader. Readers assumed it meant the DEP. So, Hilcorp applied to DEP for its Well Spacing Order. But the DEP had a different idea. Because the power to adjudicate was given to the Environmental Hearing Board (EHB), DEP told Hilcorp to file its application there. The idea that “the Commission” meant EHB not DEP has came as a mighty big surprise to the EHB.

The EHB assigned the case to Docket # 2013155, 08-26-2013, Complaint and Application dated August 22, 2013 of Hilcorp Energy Company for Well Spacing Units located in the Northwest corner of Lawrence County and the Southwest corner of Mercer County in Pulaski Township. After review, in a scathing Opinion and Order, EHB ruled that original jurisdiction for the case belonged where it started, back with DEP. So Hilcorp refiled its application with DEP, where it is known as Docket 2013-1. (The DEP did not really have a docket system; this is one of a myriad of aspects of this case that is being improvised on the fly.) DEP created a web page for the documents in this case, but this is not the “real docket”, which is maintained in a separate office in the DEP. Most of the documents in the case are linked via this web page, but at this writing, there are still at least a couple of documents known to have been filed that are missing.

This illustrates one of the most awkward issues related to this case: the DEP plays two different roles here. As the eventual landing spot in the game of administrative musical chairs created when Pennsylvania abolished The Oil & Gas Conservation Commission, DEP is “the venue” in which this case is being heard. But DEP is also a party to the case: Hilcorp argues that DEP is “obliged” to give it their Well Spacing Order, but DEP is contending that for that to happen, Hilcorp has to prove its case against evaluation by DEP. As originally filed and all the way through the EHB proceedings, there were only two parties to this case: Hilcorp, and the DEP; the forced poolees were not parties to the case. Fortunately, that appalling situation has been fixed. On April 25, 2014, attorney Omar Abuhejleh filed a petition to intervene on behalf of 3 families whose property is at risk of being force pooled: Martin and Suzanne Matteo, Robert and Carol Valentine, and Steve Emery. This petition was granted, and these forced poolees are now parties to the case.

Then in a stunning development, attorney Omar Abuhejleh filed a lawsuit in Commonwealth Court (Docket # 266 MD 2014) seeking to have the DEP proceedings stayed and the Oil & Gas Conservation Law declared unconstitutional. You can find the documents for that case here. Delaware Riverkeepr (an important player in the Act 13 Case and other recent cases) and Mountain Watershed have filed an Amicus Brief in this case, giving important support from the environmental community.

On the last day before DEP-appointed Hearing Officer Bangs’s deadline, the Nogee family, who live just outside the area claimed as a pool by Hilcorp, filed a petition to intervene pro se (without attorney). That petition has apparently been granted, but at this writing this is a bit unclear.

Where the case stands:

• Unlike the situation before the EHB, forced poolees are parties to the case with strong representation.
  
• After two postponements (one in response to a protest filed by Fayette Marcellus Watcher Jim Rosenberg, another in response to the Matteo et al petition) the hearing in the DEP proceedings was rescheduled for September 16-17. However, the attorneys had conflicts at this date. The hearing will apparently take place October 27-28.
  
• Arguments and motions are being filed in the Commonwealth Court Case, but there have been no hearings. The judge has ordered arguments by telephone on Preliminary Objections September 24 at 10 a.m. (This is apparently not open to the public.)
  

For press coverage of this case, see:

Acknowledgments:

We are grateful beyond words for the amazing efforts of attorney Omar Abuhejleh, who is doing a profound service for citizens throughout Pennsylvania at risk of having their rights stolen by the malevolence of Forced Pooling.

Many thanks to Mountain Watershed and the National Lawyers Guild for assistance connecting Omar to this case.