In a PA Law Weekly article published on January 22, 2013, Buchanan Ingersoll & Rooney Shareholder Sean W. Moran discussed the impact prices and pending legislation will have on the natural gas industry.
Of particular note is the lawsuit challenging Act 13 of 2012, which amends Pennsylvania’s Oil and Gas Act. At issue is whether Act 13 would force local government to allow incompatible uses in their districts at the behest of state law.
The latest on Act 13 – “Commonwealth Court Strikes Down Sections of Act 13 – Commonwealth Appeals Decision to Pennsylvania Supreme Court” (Client Advisory – August 1, 2012)
Moran explained that even if the Pennsylvania Supreme Court were to rule in favor of the municipalities, it’s unlikely that drillers would abandon their established investments and infrastructure.
Moran added that roadblocks – like having to negotiate contracts on the local level – could deter companies from investing in Pennsylvania in the future.
“They’re going to be making choices as to whether they spend capital dollars in our market or in Poland or Africa,” he explained. “These are all global companies and any time you have something that inhibits their ability to operate in an economical and efficient way, it kind of marginally detracts from whether they’re going to make an investment here.”
Natural gas prices also factor into the long-term industry outlook.
Lesser demand for dry gas like that found in the Marcellus Shale has led to “land-grabbing” in the Utica Shale, Moran said.