New York's Highest Court to Hear Cases Expected to Determine Future of Fracking

By Gerald B. Silverman  

ALBANY, N.Y.--New York state's highest court announced Aug. 29 that it will hear appeals of two cases that will shape the future of fracking in the state by determining whether state law preempts local governments from banning the natural gas drilling practice (Norse Energy Corp. USA v. Dryden, N.Y., docket number unavailable, 8/29/13; Cooperstown Holstein Corp. v. Middlefield, N.Y., docket number unavailable, 8/29/13).

The Court of Appeals granted motions to the plaintiffs in both cases to appeal lower court decisions. The New York State Supreme Court Appellate Division upheld local fracking bans in the two cases earlier this year (86 DER A-32, 5/3/13).

The high court is expected to set a schedule for legal briefs shortly and is likely to hear and decide the case in the spring of 2014, Gary Spencer, a spokesman for the court, told BNA.

In one case, the appellate division ruled that the state Oil, Gas and Solution Mining Law (OGSML) did not preempt a zoning ordinance banning fracking enacted by the central New York town of Dryden. The decision was appealed by the plaintiff, Norse Energy Corp. USA.

In the second case, the court similarly ruled that the OGSML did not preempt a zoning ordinance in another central New York town, Middlefield, N.Y. The decision was appealed by Cooperstown Holstein Corp., a landowner in the area.

Both cases hinge largely on the language in the OGSML, which states: “The provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law.’’

“These cases will decide the future of oil and gas development for many areas of New York state,’’ Thomas S. West of The West Firm, counsel for Norse Energy and co-counsel for Cooperstown Holstein, told BNA in an email message.

“We are confident that the high New York court will give these issues a full and thorough de novo review, which should lead to the conclusion that New York law preempts municipalities from banning oil and gas development altogether.’’

“There is no way to square the stated public policies of New York law to promote the greater recovery of the resource, prevent waste and protect the correlative rights of the landowners with a total ban on oil and gas development.’’

Deborah Goldberg, managing attorney for Earthjustice, in a statement, said “every court that has had the opportunity to address fracking in Dryden has upheld the local power to limit the use of land for oil and gas development.’’

“Our client, the Town of Dryden, is fighting the unwelcome industrialization of a quiet, rural community,’’ said Goldberg, who is representing the town. “And we'll fight at its side until this matter is resolved once and for all.’’

As Many as 170 Moratoriums

According to Earthjustice, more than 170 local governments in New York have enacted bans or moratoriums on fracking, making these cases critical to the future of fracking in the state.

Brad Gill, executive director of the Independent Oil and Gas Association of New York, issued a statement saying that “local bans on oil and gas exploration violate New York's Environmental Conservation Law and create patchwork public policy and a level of regulatory uncertainty that discourages business development.’’

“State laws were enacted with the specific purpose of overseeing natural gas extraction, in that local municipal leaders lack the resources, scientific background and regulatory expertise to do so,’’ he said.

“Further, state laws wisely acknowledge the need for local communities to benefit from these activities, and localities are authorized to impose special taxes on natural gas production, which for decades have helped fund towns, schools and fire districts in many New York communities.’’