Appeal of: New Century Pipeline, a Pennsylvania General Partnership
The opinion of the court was delivered by: Mary Hannah Leavitt, Judge
Argued: September 16, 2011
BEFORE: HONORABLE RENEE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge (P.)
New Century Pipeline (New Century) appeals an order of the Court of Common Pleas of McKean County (trial court) affirming a decision of the Bradford Township Zoning Hearing Board (Board) that New Century's compressor station, located where natural gas emerges from the wellhead, is not a use permitted in the Forest/Slope Residence District (Forest District). The Bradford Township Zoning Ordinance (Zoning Ordinance)*fn1 permits oil and gas production in the Forest District and allows the installation of equipment necessary to drilling and pumping operations. Without a compressor station, the gas collected at New Century's wellhead cannot be placed into a pipeline and moved from the site. Accordingly, New Century argues that its compressor station is equipment necessary to its gas production. We agree and reverse.
On August 7, 2009, the Bradford Township Zoning Officer (Zoning Officer) issued an enforcement notice to New Century, charging it with a violation of Section 200.1.A.(8) of the Zoning Ordinance. Section 200.1.A.(8) states, in relevant part, as follows:
§200. Forest/Slope Residence Districts. This district is designed to protect areas in the Township, particularly those areas of steep slopes, for the preservation and conservation of the natural environment; to minimize soil erosion; to permit and encourage the retention of forested land; and to permit non-intensive land uses that constitute a harmonious and appropriate use in selected areas of the Township.
1. Permitted Uses and Structures --
(8) oil and gas production, including equipment necessary to drilling or pumping operations, but not including the construction or alteration of new or existing storage, service or repair buildings. Such producer shall acquire the proper permits and approvals from the State Department of Environmental Resources and file such with the Zoning Officer.
ZONING ORDINANCE §200.1.A.(8) (emphasis added); Reproduced Record at 199a (R.R. __). In addition to permitting the principal uses of oil and gas production, the Zoning Ordinance permits uses accessory thereto. ZONING ORDINANCE §200.1.B.(1). An accessory use is defined as one "customarily incidental and subordinate to the principal use . located on [the] same lot" with the principal use. ZONING ORDINANCE §1110; R.R. 210a.
New Century's gas pumping operation drills and pumps for shallow gas; it does not conduct hydraulic fracturing or "fracking." Adjacent to the actual pump is a small compressor and stripper station, which purifies the natural gas before placing it in a pipeline for movement from the site. The Zoning Officer's enforcement notice asserted that New Century's compressor station was not equipment "necessary to drilling or pumping operations" and was not incidental to a gas pumping operation. The Township contended that the compressor station was processing gas, and "oil and gas refining, processing, storage and transmission" can only be done in the Township's General Manufacturing District. ZONING ORDINANCE §410.1.A.(3); R.R. 209a. New Century defended that without the compressor station, it could not move its gas from the wellhead. Accordingly, it was equipment necessary to gas production or, alternatively, a permitted accessory use.
At the hearing on the enforcement notice, the Township submitted several photographs of New Century's gas production facility. The photographs show the well itself, which is a single steel pipe much shorter than the surrounding trees, together with a generator, a small storage tank and the compressor station, which is under a tarpaulin. Arranged together, the equipment appears to have a footprint approximately the size of a two-car garage. Nearby is a shed used for storage and a 19,000 gallon storage tank, which is surrounded by a protective fence and warning signs.
William Woodring, who lives nearby, testified for the Township.
Before retiring, Woodring worked for 31 years as a fire chief at an oil refinery. Woodring acknowledged that he had never operated a compressor station and had never worked on a gas operation such as New Century's. Nevertheless, Woodring was accepted as an expert qualified to testify about the oil and gas industry.
Woodring explained New Century's compressor station. The generator operates the compressor station, which strips butane and propane from the gas that arrives at the wellhead and pressurizes it into a liquid form. These liquified byproducts are then piped underground to the 19,000 gallon storage tank. By removing propane and butane, the compressor station purifies the natural gas, so that it can be placed into a pipeline. Woodring opined that gas production involves taking the gas from the ground; it does not include the work of the compressor station, which is a separate processing operation.
On cross-examination, Woodring acknowledged that propane is an ingredient of natural gas that is heavier than natural gas and butane is an ingredient that is lighter than the natural gas, i.e., a light-end product. Nevertheless, he emphasized his view that the production ends when the oil or gas emerges from the ground.
Jack Carnes, the Zoning Officer, also testified. He reiterated that oil and gas production is permitted in the Forest District, but oil and gas processing are not permitted. Rather, oil and gas refining, processing, storage and transmission must be done in the Manufacturing District. He then turned to Section 1110 of the Zoning Ordinance, which defines a building as "a combination of any materials, whether portable or fixed, having a roof, to form a structure affording shelter for persons, animals or property." ZONING ORDINANCE §1110; R.R. 210a. He believed that the compressor station was a prohibited service "building" because it is covered by a tarpaulin roof stretched over metal poles to shelter the compressor equipment. The Zoning Ordinance does not allow storage, service or repair buildings in the Forest District.
In response, New Century presented the testimony of Charles G. Lang, a professional land surveyor, who has worked for 15 oil and gas companies. Within the County, he has seen six facilities similar to New Century's, including two in Bradford Township that use compressor stations. Lang's testimony was offered to show that ...