EQT sues Union Township over ‘unlawful’ permitting fees on pipelines
Driller’s affiliates claim municipality charging exorbitant $50,000 for permit
Two EQT Corp. affiliates are suing Union Township and its five supervisors in federal court, claiming the municipality and local officials attempted to extort the natural gas producer into paying exorbitant fees while trying to secure permits to drill.
Attorneys for EQT Production Co. and EQM Gathering OPCO LLC filed the lawsuit Tuesday accusing Union Township of blocking their efforts to conduct drilling operations and then requiring the companies to pay a $50,000 fee to secure a permit for each pipeline.
“Dissatisfied with the fees and regulations that Pennsylvania law authorizes the township to impose upon oil and gas activities within its borders, defendants have engaged in escalating attempts to extract unlawful payments from EQT Production and EQM,” the lawsuit alleges.
The lawsuit alleges that the township began working in August to draft an ordinance requiring anyone constructing oil and natural gas pipelines in the township to pay $50,000 to apply for a permit to perform the work. The township apparently backed down after EQT Production questioned the legality of such a permitting process, claiming it ran counter to state and federal laws.
However, when EQM applied for a series of road crossing and temporary driveway permits to construct water and gas pipelines to serve three recently completed natural gas wells, the township “saw this otherwise routine permit application process as yet another opportunity to demand significant and unlawful payments from EQT,” the lawsuit alleges.
Later, the lawsuit claims that the township escalated its demands in order to issue a permit, requiring EQT to pay $750,000 to repair a road slip apparently caused by another company. The municipality also demanded that EQT pay a monthly $50,000 fee to be permitted to continue doing business in the township, according to the lawsuit.
“None of these demands were authorized by Pennsylvania law or the Union Township Code,” the lawsuit states.
By February, the company plainly stated to the township that it would not fix the road slips or make “unlawful payments,” which the lawsuit claims resulted in retaliation by the supervisors days later when they apparently voted against an agreement with the company and continued withholding the permits requested four months earlier. The lawsuit claims the vote was held Feb. 17, which was a continuation of the board’s regular Feb. 12 meeting, although it’s unclear what exactly transpired since the February meeting minutes had not been posted on the township’s website as of Friday.
The lawsuit claims company representatives spoke to township officials one more time after the meeting and gave them a Feb. 27 deadline to respond, which went unanswered.
The companies claim the delay in pipeline construction has been costly since they have already spent money for approved well pads that cost millions of dollars to build. The companies also stated in the lawsuit that they have been performing natural gas drilling in the township for years and have never had issues receiving proper permits from the municipal government. The lawsuit claims the holdup has now caused significant issues with well production and natural gas transmission.
The lawsuit names Union Township and its five supervisors – chairperson Michalle Dupree, vice chair Suzonne Baynham, Larry Speer, Carl Hanford and John Seiler – as defendants. It also claims the township supervisors could be held personally liable under federal civil action for deprivation of rights, meaning they would not be covered by the municipality’s insurance. Union Township solicitor Dennis Makel declined to comment on the lawsuit Friday.
The lawsuit, which was filed Tuesday at the federal courthouse in Pittsburgh, is demanding an immediate injunction against the township, along with attorney’s fees and unspecified compensatory and punitive damages against the municipality and all five supervisors. Pittsburgh attorneys Mark Dausch and Joseph Schaeffer, who are representing the plaintiffs, could not be reached for comment to discuss the lawsuit.