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Local Drilling Bans Update

11/29/2011

On November 8, 2011, three municipalities in western Pennsylvania put direct democracy to the test with referendums that would essentially ban natural gas drilling in their communities. Two of the referendums were overwhelmingly defeated while one succeeded with overwhelming support.

We have provided updates the past several months on the referendum on the drilling ban in Peters Township, and when the vote on the referendum was held, the ban on drilling was rejected by Peters Township voters by a 4 to 1 margin. Given the amount of publicity the referendum received leading up to the vote, the overwhelming vote against the referendum attempting to ban drilling in the township is a strong indication of the overall sentiment about development in the Marcellus Shale in western Pennsylvania. If an affluent bedroom community, with an approximate median income of $99,000, which is a relatively close suburb of Pittsburgh, rejects a very well-publicized and well-organized attempt to ban drilling in such an overwhelming manner, that could be viewed as an indication of strong support for the industry in the region. While that may well be the case, the extremely overbroad language of the Peters Township referendum likely had something to do with its thorough thrashing at the polls.

In Warren Township, located in Warren County in northeast Pennsylvania, voters were asked whether they wanted to amend their Home Rule Charter to prohibit natural gas extraction within the township’s borders and forbid the storage or transfer of byproducts from drilling within the city limits. With approximately 2,000 votes cast, the ban was rejected with 62% opposition.

Lastly, in the lone victory for anti-drilling activists, in State College, Pennsylvania, which is located in Centre County and home to Pennsylvania State University, voters overwhelmingly approved a ban on drilling within the city limits by an almost 3 to 1 margin. Like the ban on drilling that was passed by the Pittsburgh City Council last year, this was largely a symbolic gesture, as no companies intend to drill in State College, which is located outside the Marcellus Fairway. Although the ban probably violates Pennsylvania’s Oil & Gas Act, it is unclear if any company will mount a challenge to the ban. Of course, the Pennsylvania legislature is currently contemplating legislation that would make the state, rather than the local cities, townships or municipalities, the last word as to all zoning and other regulations related to shale drilling in Pennsylvania.

For a news summary on the referendums and the impact natural gas exploration had on the recent election, read more at the following links:

http://shale.sites.post-gazette.com/index.php/news/politics/24168-election-night-the-drilling-referendums

http://www.post-gazette.com/pg/11317/1189569-503.stm

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