Gas Company Hires Lawyer to Sue Morgantown Over Ban

May seek injunction to stop the law from taking effect

Morgantown Dominion Post
22 June 2011
By David Beard

The wheels are already in motion to sue Morgantown over its horizontal gas drilling and fracking ban, a Jackson Kelly attorney said Tuesday.

Al Sebok said Enrout Properties LLC, which owns the surface and mineral rights to the Morgantown Industrial Park Marcellus gas pad, has retained him to represent Enrout in litigation against the city. Sebok was one of the scheduled speakers at Jackson Kelly’s seminar, “Marcellus Shale in WV: Emerging Issues,” held at the Waterfront Place Hotel.

Morgantown based its ban on state code 8-12-19, which allows cities to extend their jurisdiction one mile beyond their boundaries when required to reasonably exercise their powers and authority.

Sebok listed several reasons why the city may be wrong. One, 8-12-19 was written in 1969. When the Legislature updated the zoning law in 2004, it didn’t include the same extraterritorial provision; while Morgantown is changing its business and taxation code, the ban is really more of a zoning issue.

Two, code 8-12-2, regarding home rule powers, forbids city laws that conflict with the state constitution or other general law. The ban does conflict.

Three, cities have the power to legislate against public nuisances, but the law clearly defines public nuisance, and the city can’t “arbitrarily and capriciously” declare a legally permitted activity a public nuisance.

Sebok said Northeast Natural Energy, the natural gas firm at the site, worked closely with the Morgantown Utility Board, a city agency, even before the permit was approved, and agreed to extra provisions — containment, berms, casings and testing — after the permit was issued. “This is what I view as a win-win situation for everyone. This is how the permitting [process] should work,” he said.

He called the city’s action a regulatory taking of property without just compensation.

He later told The Dominion Post that he didn’t know how soon Enrout would file suit — they’re evaluating options — but it likely will be quickly. He also said the company may seek an injunction or restraining order to suspend the ordinance until litigation is completed.

Northeast President Michael John said that litigation is under consideration, and the company has been working with attorneys to map out strategies.

Bottom line, though, he said: “I do not want to sue the city of Morgantown.” Northeast is in the business of drilling, not taking cities to court, he said.

Morgantown City Manager Terrence Moore said the city has anticipated legal action and is acting with due diligence to prepare for and support City Council’s action, and will respond accordingly. He believes state code supports the city’s position.

Rob Alsop, chief of staff for acting Gov. Earl Ray Tomblin, also spoke at the Jackson Kelly seminar. He equated the city’s ban to what the Environmental Protection Agency did to Arch Coal’s Spruce Mine in Logan County: Retroactively revoked a water permit, effectively halting $250 million worth of planned operations.

Alsop referred to Northeast’s $7 million-plus investment at the Morgantown site. “Now, after the fact, there’s the potential they could be told to stop.”

That could have a chilling impact on business across the state, he said, when Tomblin wants to promote the industry and its ancillary businesses.

“Marcellus shale is a great development for West Virginia,” Alsop said. “We are doing all we can to make it a phenomenal development for West Virginia.”

Tomblin appointed a Marcellus and Manufacturing Task Force to explore the promise of ethane, a natural gas by-product that could spur all sorts of plasticsrelated manufacturing to replace the lost chemical industry in the Kanawha Valley and the lost steel works in the Northern Panhandle.

“We want this type of investment here,” he said.