Wednesday, September 18, 2013

Conservation Easements and Fracking

One of the tricky things about conservation easements is that most of purport to protect land in perpetuity but the original parties to conservations easements are probably not going to have thought of every possible future circumstance or land use. Fracking is a great example. Many conservation easements cover property that now appears desirable for fracking. The potential for fracking on these properties may not have been contemplated by the folks who drafted the conservation easements just a few short years ago. An example of this appears in the recent case of Stockport Mountain Corp. v. Norcross Wildlife Foundation, 2013 WL 4538822 (M.D. Penn. Aug 27, 2013) (Munley, J.)

A 2002 conservation easement burdens some property in Pennsylvania that now appears quite attractive for shale gas development. Although the parties involved in crafting the conservation easement discussed it over the course of several years and went through multiple drafts, no one mentioned the words shale, natural gas, or fracking.  After being approached by two different companies seeking natural gas leases, the landowner sought a declaratory judgment that the conservation easement permitted fracking because ... er... because it doesn't expressly prohibit it....

Court said no go in this case based on a provision prohibiting commercial and industrial uses on the property (except for those specifically permitted). Good news for the many conservation easement holders that commonly include such language in their agreements. One interesting thing is that the CE did allow some quarrying, which the court seemed to view as even more environmentally destructive than fracking... but the court prohibited the fracking because it wasn't mentioned in the savings clause of the commercial prohibition. What the court did not reach is whether fracking would have been at odds with the conservation values of the property. That might have been a trickier one.

This is a nice example of cases we should continue to see with conservation easements as landowners seek to engage in uncontemplated activities like erecting windmills and cell phone towers.. oh yeah and probably more fracking.

Jessie Owley

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