A few individual private parties owning rights to the Marcellus Shale Natural Gas beneath their land have succeeded in adding themselves as litigants in an action between an energy company and the Pennsylvania Department of Environmental Protection (DEP).
In successfully inserting themselves as parties to a suit filed by Hilcorp Energy (to compel the DEP to approve more applications for horizontal drilling permits), five private land owners holding three affected parcels of land are seeking to have the court declare that forced grouping, or “Forced Pooling” violates the Constitution of the Commonwealth of Pennsylvania. As the additional drilling Hilcorp Energy seeks to perform partially depends on the enforcement of forced pooling, the court recognized the land owners as having standing and admitted their participation as parties to the case at bar.
Forced Pooling is akin to the concept of “Eminent Domain”, wherein the owners of mineral rights and other such natural resources are compelled to lease their rights along the same terms and conditions as their neighbors for economic reasons.
The court’s decision on the constitutionality of Forced Pooling will impact individual property rights in the Commonwealth of Pennsylvania and have economic repercussions across Pennsylvania and beyond. Also, regardless of the outcome, the court’s decision is likely to trigger off a series of appeals, separate suits and legislation (as well as impact the current course of pending legislation) that could well shape the success or failure of the development of Pennsylvania’s infant natural gas industry.
JHI will continue to track developments affecting the rapidly changing Marcellus Shale legal landscape.