Monday, August 27, 2012

Gas Production and Ordinance Permits

In re: Appeal of New Century Pipeline, 2012 Pa. Commw. LEXIS 139 (2012)

Frank Kosir, Jr., Esquire

This matter addressed the issue of whether an on-site gas stripper and compressor station constitutes equipment necessary for the completion of natural gas drilling and pumping operations.  New Century Pipeline (“New Century”) is a natural gas exploration company specializing in shallow gas exploration.  It explores for shallow natural gas by drilling wells and pumping natural gas from these wells for transfer to a transmission pipeline.  As part of its exploration process, New Century locates adjacent to each of its well pumps a small stripper and compressor station, which serves to purify the extracted natural gas before it is transferred to the pipeline.

New Century operates a shallow well in the Forest/Slope Residence District (“District”) in Bradford Township (“Township”), McKean County, Pennsylvania.  Pursuant to the Township’s Zoning Ordinance (“Ordinance”) oil and gas production are permitted in the District, as is the installation of equipment necessary to drilling and pumping operations. In August of 2009, the Township Zoning Officer issued an enforcement notice to New Century asserting that the station was processing gas, and was not permitted within the District.  A hearing on the enforcement notice was held before the Township’s Zoning Hearing Board, which upheld the enforcement notice, and ordered New Century to remove the station.  The trial court affirmed, concluding that the preparation of natural gas for transfer to market constitutes processing under the Ordinance and was therefore not permitted in the District.

On appeal, our Commonwealth Court reversed.  In issuing its ruling, the court noted that the natural gas collected cannot be placed into pipelines and sent to market without the compression and stripping processes performed by the station.  As the Ordinance permits gas production within the District, any entity seeking to explore for natural gas must be permitted to utilize the equipment necessary for it to produce natural gas suitable for transport to market.  Therefore, the compression and stripper station constitutes equipment necessary to drilling and pumping operations and, as such, is permitted by the Ordinance. 

For additional information please contact Frank Kosir at

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