On November 29, the PA Supreme Court issued a ruling saying UGI Storage Company could be held liable for taking oil and gas drilling rights in a proposed 2,980-acre protective buffer zone around the 1,216 acre Meeker natural gas storage field in Tioga County.

The case started in 2009, when UGI Storage Company applied to the Federal Energy Regulatory Commission for a certificate of public convenience to acquire natural gas distribution facilities that included the underground 1,216 acre Meeker natural gas storage field in Tioga County

The application included permission for UGI to acquire, by eminent domain if necessary, a 2,980-acre buffer zone around the facility to provide a 3,000-foot safety zone.

The property owners in this case owned gas and oil rights within the proposed buffer zone and alleged UGI wanted to buy the property to ensure there were no oil and gas extraction activities in close proximity to the storage field.

FERC did not grant permission for the 2,980 buffer zone, although the Commission said a storage field buffer is necessary to protect the integrity of the storage reservoir.

The property owners went to county court to challenge the proposal of a buffer zone as a de facto taking of property rights. 

They alleged the only way to effectively retrieve gas deposits located on their properties was through hydraulic fracturing.

The property owners said UGI's actions and statements relative to the proposed buffer zone “were sufficient to prevent oil and gas exploration and production companies from seeking to exploit the land located in the Meeker Buffer Zone for oil and gas.”

The case went through several trips to county court until it was appealed to Commonwealth Court which ruled in UGI's favor saying it was not a de facto taking.

The PA Supreme Court said, "...it is enough that the condemnor has proceeded by authority of law for a public purpose."

The PA Supreme Court overturned the Commonwealth Court ruling in the case and remanded the case to the Court for further proceedings consistent with the ruling.

Click Here for a copy of the opinion.

Gas Storage Fields In PA

The Department of Environmental Protection has a list of 48 active underground gas storage fields, 6 inactive fields, and approximately 40 former or decommissioned fields in 26 counties in Pennsylvania.

The majority of the Pennsylvania UGS fields are contained within depleted hydrocarbon reservoirs (host rocks, typically sandstones, in which the economic oil and/or natural gas has been removed).

These locations coincide with historical oil and gas production, which is predominantly in the western half of Pennsylvania.

DEP regulates gas storage fields to help protect their integrity from coal mining and oil and gas drilling and ensure their safe operation.

In addition to DEP’s oversight, federal regulators such as the Federal Energy Regulatory Commission and the Pipeline and Hazardous Materials Safety Administration are responsible for enforcing federal regulations pertaining to UGS fields.

Click Here for a DEP fact sheet on Gas Storage Fields.

[Posted: November 30, 2021]

12/6/2021