Oil and Gas Update
Fayette County, WV Ordinance Banning Oil & Gas Waste Disposal Met with Preemptive Challenge By Gas Industry
January 20, 2016
Fayette County, West Virginia is home to the New River Gorge. It is also home to the newest local ordinance affecting the oil and gas industry. On January 12, 2016, the County adopted an “Ordinance Banning the Storage, Disposal or Use of Oil and Natural Gas Waste in Fayette County, West Virginia.” Just days later, EQT Production Company sued the County Commissioners in federal court claiming that the ordinance: 1) is preempted by the pervasive nature of the existing State Oil and Gas Act and the Underground Injection Control (“UIC”) program issued pursuant to the Federal Safe Drinking Water Act; 2) was adopted in contravention of State law for adopting zoning restrictions; and 3) unconstitutionally takes EQT’s property and impairs its contracts.
EQT, which owns waste disposal wells of its own in Fayette County, also sought an emergency temporary restraining order and preliminary injunction against the Commissioners to prevent enforcement of the ordinance. At a hearing on January 19, 2016, Judge Copenhaver, U.S. District Court Judge, granted a temporary restraining order and set a hearing on the preliminary injunction for February 11, 2016.
We have written before about the Fayette County Commission and its proposed ordinance. The proponents of the ordinance had earlier claimed that Danny Webb Construction, which has long held injection well permits to dispose of gas well waste near Lochgelly in Fayette County, was polluting nearby surface waters. See “Stop Poisoning Fayette Plateau!”
Local citizens had earlier challenged the authorization held by Danny Webb Construction to inject waste fluids from oil and gas exploration and development. Essentially, Webb’s UIC permit had expired, but the WVDEP authorized it to continue operating while it processed a new application. Local citizens, aided by groups with a broader agenda, appealed to the Environmental Quality Board from WVDEP’s decision to allow Webb to operate without a permit. The Board held that WVDEP’s action was unlawful, but gave it 30 days to re-permit the facility or to order a cessation of operations. See Keenan v. Mandirola, Appeal No. 14-04-EQB (April 8, 2015).
WVDEP reportedly re-issued the permit to Webb in the summer of 2015, but by that time anti-fracing groups had seized on the case as a vehicle for seeking broader relief in the form of a county-wide ordinance.
The primary argument advanced by EQT in its challenge to the ordinance is that pervasive state regulation of the industry has displaced or “preempted” the ability of counties and cities to regulate the industry. EQT relies in part on a previous order finding that the City of Morgantown’s efforts to prohibit hydraulic fracturing inside the city and up to one mile outside of its corporate limits was preempted by the pervasive control applied by the WVDEP by rules adopted under the State Oil and Gas Act. See Northeast Natural Energy LLC, et al. v. City of Morgantown, No. 11-C-41 (Cir. Ct. Monongalia County, Aug. 12, 2011)[1] (“… Court concludes that the State’s interest in oil and gas development and production throughout the State as set forth in W.Va. Code § 22-6, et seq. … provides for the exclusive control of this area of law to be in the hands of the WVDEP.”).
Danny Webb Construction has also filed a lawsuit against the Fayette County Commission, but details are not yet available.
This article was authored by Robert G. McLusky, Jackson Kelly, PLLC.
[1] Jackson Kelly’s Albert Sebok represented one of the plaintiffs in the successful challenge to the Morgantown ordinance.