fracking

By Tod J. Everage

Since the announcement by Helis Oil & Gas that it intended to introduce hydraulic fracturing (“fracking”) to St. Tammany Parish, the local response has been vitriolic to stay the least – from public protests and interstate billboards to lawsuits. In fact, according to DNR officials, the large public hearing on Helis’ drilling permit application was a first for them. These fights are raging across the country between oil and gas companies and environmentalists and concerned citizens who worry the fracking will adversely affect their groundwater or adjoining lands. States like Vermont, Maryland, New York, and others have banned fracking altogether. Other local and state governments have banned fracking bans. Needless to say, this issue is a hot topic in the U.S. right now.

Helis, a New Orleans-based energy company, claims over 60 successful fracturing projects around the U.S., and now they hope to do one closer to home in St. Tammany Parish. In June 2014, the St. Tammany Parish Government filed a lawsuit against James Welsh, in his capacity as Commissioner of Conservation for the State of Louisiana, DNR seeking to prevent DNR from issuing a critical permit that Helis needed to begin drilling its exploratory well. St. Tammany argued that its zoning laws prohibited Helis from drilling the well at the proposed site – private timber lands, that were zoned A-3 residential. The Town of Abita Springs later filed similar suits in multiple courts. In December 2014, the Office of Conservation granted Helis’ permit application. In the St. Tammany Parish lawsuit, the state district court judge eventually granted a partial summary judgment on behalf of Helis, declaring that the St. Tammany Parish zoning ordinances were pre-empted by general state law, and on behalf of the Commissioner, declaring that DNR had complied with the law during the Master Plan review of the permit process. Other claims in the case remained unresolved, but this ruling was immediately appealed. On March 9, 2016, the Louisiana First Circuit affirmed the district court’s summary judgment. Though Helis’ opponents have publicly declared that they would not stop until the U.S. Supreme Court weighs in, this is latest in a string of victories for Helis in the various lawsuits filed to stop the proposed drilling.

In this case, St. Tammany Parish argued that its zoning ordinances precluded Helis (or anyone) from drilling wells on the proposed drilling site because it was zoned A-3 residential – “single-family residential environment on moderate sized lots.” The ordinances limit the land use of such zones to “certain specified cultural, educational, religious, and public uses.” The property has been used as a pine tree farm for over 30 years, and sits atop the Southern Hills Aquifer, the sole source of drinking water in the area. St. Tammany Parish argues that its authority to enact and enforce its own zoning ordinances within its geographic boundaries is provided by the Louisiana Constitution, and cannot be displaced.

Helis and DNR countered that La. R.S. § 30:28F expressly preempts local zoning ordinances where they contradict. The State Office of the Conservation is statutorily mandated to regulate the oil and gas resources in Louisiana, and that statute provides that DNR’s issuance of a permit is “sufficient authorization” for the permit holder to enter the property and drill. “No other agency or political subdivision of the state shall have the authority, and they are hereby expressly forbidden, to prohibit or in any way interfere with the drilling of a well or test well in search of minerals by the holder of such a permit.” La. R.S. 30:28F. These laws were enacted at a state level under the guidance of the Louisiana Constitution acknowledging environmental preservation as a public policy of the state.

On issues of pre-emption, unless there is an express provision mandating it, the courts must look to legislative intent, which includes “examining the pervasiveness of the state regulatory scheme, the need for state uniformity, and the danger of conflict between the enforcement of local laws and the administration of the state program.” Palermo Land Co., Inc. v. Planning Comm’n of Calcasieu Parish, 561 So.2d 482, 497 (La. 1990) (citing Hildebrand v. City of New Orleans, 549 So.2d 1218, 1227 (La. 1989)). The First Circuit found that the legislative intent and pervasiveness of the state regulatory scheme was clearly defined (see “expressly forbidden”) within La. R.S. 30:38F itself. As a result, the First Circuit agreed with Helis and found those ordinances that specifically interfered with Helis’ drilling of the well to be unconstitutional.

Underscoring that, the Louisiana Constitution reminds that “notwithstanding any provision of this Article, the police power of the state shall never be abridged.” La. Const. Art. §9(B). The Commissioner’s power is an exercise of police power and the statutes addressing local zoning regulations do not apply to the Commissioner in the exercise of that power. St. Tammany argues then that the Commissioner’s regulation of the oil and gas activity does not preclude those constitutional zoning powers reserved by the local government. The First Circuit disagreed. Specifically, those competing constitutional mandates are both found in Article VI of the Constitution, and §9(B) again provides that nothing within Article VI can abridge the Commissioner’s policing power.

Finally, La. R.S. § 30:28F is a general law enacted by the legislature that denies authority to a political subdivision – such as a Parish – by expressly prohibiting interference with the drilling of a well by a permit holder. Section 5 of the Article VI of the State Constitution further acknowledges that adopted home rule charters by local governments are limited by Louisiana general law and other sections of the Constitution. Consequently, the First Circuit affirmed the district court’s ruling in all respects, and unless reversed by the Louisiana Supreme Court, its order renders local ordinances that infringe on a permit-holder’s drilling rights unconstitutional.