Oil and Gas and Another Questionable Pennsylvania Environmental Rights Amendment Decision
I recently wrote a column for The Legal Intelligencer’s Pennsylvania Law Weekly, reposted on this blog here, raising questions about whether the Pennsylvania courts have correctly identified the public natural resources that ought to be valued and conserved as the corpus of the public trust established by the Environmental Rights Amendment to the Pennsylvania Constitution. In a series of decisions in litigation brought by the Pennsylvania Environmental Defense Foundation, the Commonwealth’s appellate courts have grappled with whether, and how much of, the proceeds of leasing oil and gas resources underlying state parks and forests must be appropriated to restricted conservation purposes, and how much can be appropriated to the general fund. The courts treat the oil and gas as the trust assets that matter, rather than the surface resources.
The Court of Appeals for the Third Circuit has weighed in, at least indirectly, and the problem persists. In Yaw v. Del. R. Basin Comm’n, No. 21-2315 (3d Cir. Sept. 16, 2022), the court affirmed dismissal for lack of standing of a challenge by certain Republican members of the General Assembly and the Republican Senate Caucus to the ban on high volume hydraulics fracturing in the Delaware River Basin imposed by the Delaware River Basin Commission, an interstate compact commission. However, the legislators were joined by Wayne and Carbon counties and two townships in Wayne County.
The two counties and two townships asserted that they were trustees for the public natural resources within their jurisdictions under the Environmental Rights Amendment. The Court of Appeals agreed. The municipalities then asserted that they had standing to challenge the reasonableness of the ban because it interfered with their ability to manage the trust assets for the benefit of the trust beneficiaries. That is, some of the oil and gas in Wayne and Carbon counties are public natural resources. Production of that oil and gas – as well as private oil and gas – would provide funds to the towns and counties that could be used for environmental conservation purposes. However, the municipal governments, as trustees, were deprived by the DRBC ban of their ability to exercise their discretion as to whether to allow development of the oil and gas, and therefore they had an injury in fact and standing to challenge the DRBC regulation.
The Court of Appeals disagreed, holding that to allow that standing would “turn [the ERA] ‘upside down’. . . .” The court reasoned that the point of the ERA was to conserve public natural resources, and that to grant standing because the municipality might want to sell some of those resources would be contrary to the amendment even if the proceeds of the sale would return to the trust.
But that view treats the oil and gas in the ground as if it matters for purposes of the ERA public trust. What matters under the ERA might be said to be the environmental features that provide “clean air, pure water, and . . . the natural, scenic, historic and esthetic values of the environment.” Trustees might be said to have an obligation to exercise independent judgments as to whether disposition of some trust assets that do not provide any of those values – like oil and gas in the ground – would, on balance, better enhance the trust corpus’ ability to provide those values. Why that does not confer standing to challenge imposition of a ban is not clear. Consider, for example, if the DRBC prohibited installation of any concession kiosks on any park land in Philadelphia (which is in the Basin). Maybe that would be a good idea, but shouldn’t the City have standing to challenge the judgment of the Commission?
Oil and gas cases may not be the best ERA cases to be bringing. This one was indirect and might have been unavoidable, but we are not making the most coherent law by putting public natural resources a mile underground front and center under an environmental constitutional provision.