The United States Court of Appeals for the Second Circuit (Second Circuit) certified a question to the New York Court of Appeals (Court of Appeals) that could have provided an avenue by which an energy company could have maintained its right to drill in New York. Specifically, the company argued that New York’s decision to halt the issuance of drilling permits during its review of the environmental impact of fracking triggered a force majeure clause in a lease that extended the term of the lease.
The energy company had several oil and gas leases with landowners in Tioga County. The leases contained habendum clauses that would have extended the leases as long as the company used the land for the production of oil and gas. When New York implemented its moratorium on hydraulic fracturing, the company had not yet engaged in oil and gas production on the leased land and the landowners had not received any royalties. The landowners sued in New York federal court, arguing that the leases had expired. The energy company and landowners filed competing motions for summary judgment. The energy company argued that the leases were extended because the force majeure clause was triggered by New York’s moratorium on hydraulic fracturing, and the landowners claimed that the leases were expired.
The district court granted summary judgment in favor of the landowners, reasoning that the leases had expired. The energy company appealed to the Second Circuit. Because of the importance and novelty of the case to state law, the Second Circuit certified two questions to the Court of Appeals: 1) whether New York’s moratorium constituted a force majeure event and 2) whether the leases were extended.
The Court of Appeals answered the second question and refrained from answering the first question. Specifically, the court concluded that the force majeure clause did not affect the term of the habendum clauses and therefore failed to extend the leases. The court based its conclusion on the fact that the habendum clause did not refer to the force majeure clause. Moreover, according to the court, the force majeure clause only applied to the termination of the lease rather than the expiration of the lease.
Read the opinion.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
Showing posts with label New York. Show all posts
Showing posts with label New York. Show all posts
Fracking dominates the November ballot
One of the most highly debated issues during the November election was the question of whether localities have the authority to enact fracking bans. Several cities throughout the country have attempted to enact prohibitions against hydraulic fracturing with varying degrees of success. Denton, Texas has become one of the latest cities to consider such a ban.
On November 4th, Denton residents voted on whether the city should enact a ban against hydraulic fracturing within the city limits. The measure passed with 59 percent of Denton residents voting in favor of the measure and 41 percent voting against it. The Denton City Council considered the measure initially; however, rather than enact the ban itself, the Council opted to place the ban on the ballot for the November elections. Denton currently has a moratorium in place banning drilling until January 20, 2015.
Several cities in California and Ohio also attempted to pass local bans against hydraulic fracturing. Specifically, fracking bans were on the ballot in the following localities: Santa Barbara County, California; San Benito County, California; Mendocino County, California; Athens County, Ohio; Gates Mills, Ohio; Kent, Ohio; and Youngstown, Ohio. Most of the proposed fracking bans were defeated. The majority of voters in San Benito County and Mendocino County voted in favor of the ban, but the anti-fracking measure was defeated in Santa Barbara. The anti-fracking measure was defeated in Gates Mills, Kent, and Youngstown, but voters in Athens County approved the fracking ban.
Multiple cities have already enacted prohibitions against hydraulic fracturing. Five cities in Colorado have passed ordinances prohibiting fracking, and several cities in California also have fracking bans. In addition, similar legislation exists in localities throughout New York, Hawaii, New Jersey, and New Mexico. Some cities have taken the alternative approach of enacting temporary prohibitions against hydraulic fracturing. Other cities in Texas may also follow Denton’s example. Anti-fracking groups in Alpine, Texas are attempting to garner support for a city ban on hydraulic fracturing.
Courts throughout the country have disagreed on whether localities can enact ordinances barring hydraulic fracturing. Whereas some courts have invalidated local fracking bans, other courts have upheld such local laws. Currently, there are legal challenges to similar local bans pending in California, New Mexico, and Ohio. Indeed, several landowners have already filed suit against Denton to challenge the city’s moratorium on drilling. Moreover, the day after the election, the Texas Oil and Gas Association filed a motion to stop the enforcement of the fracking ban. Although the law is not yet settled on the validity of local fracking bans, one thing is certain—the Denton ban will serve as precedent for other Texas cities considering fracking bans.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
On November 4th, Denton residents voted on whether the city should enact a ban against hydraulic fracturing within the city limits. The measure passed with 59 percent of Denton residents voting in favor of the measure and 41 percent voting against it. The Denton City Council considered the measure initially; however, rather than enact the ban itself, the Council opted to place the ban on the ballot for the November elections. Denton currently has a moratorium in place banning drilling until January 20, 2015.
Several cities in California and Ohio also attempted to pass local bans against hydraulic fracturing. Specifically, fracking bans were on the ballot in the following localities: Santa Barbara County, California; San Benito County, California; Mendocino County, California; Athens County, Ohio; Gates Mills, Ohio; Kent, Ohio; and Youngstown, Ohio. Most of the proposed fracking bans were defeated. The majority of voters in San Benito County and Mendocino County voted in favor of the ban, but the anti-fracking measure was defeated in Santa Barbara. The anti-fracking measure was defeated in Gates Mills, Kent, and Youngstown, but voters in Athens County approved the fracking ban.
Multiple cities have already enacted prohibitions against hydraulic fracturing. Five cities in Colorado have passed ordinances prohibiting fracking, and several cities in California also have fracking bans. In addition, similar legislation exists in localities throughout New York, Hawaii, New Jersey, and New Mexico. Some cities have taken the alternative approach of enacting temporary prohibitions against hydraulic fracturing. Other cities in Texas may also follow Denton’s example. Anti-fracking groups in Alpine, Texas are attempting to garner support for a city ban on hydraulic fracturing.
Courts throughout the country have disagreed on whether localities can enact ordinances barring hydraulic fracturing. Whereas some courts have invalidated local fracking bans, other courts have upheld such local laws. Currently, there are legal challenges to similar local bans pending in California, New Mexico, and Ohio. Indeed, several landowners have already filed suit against Denton to challenge the city’s moratorium on drilling. Moreover, the day after the election, the Texas Oil and Gas Association filed a motion to stop the enforcement of the fracking ban. Although the law is not yet settled on the validity of local fracking bans, one thing is certain—the Denton ban will serve as precedent for other Texas cities considering fracking bans.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
Bill proposal to prohibit entry of fracking drill cuttings waste into New York
Senator Ten O’Brien proposed a bill on Monday to prohibit landfills in New York from accepting drill cuttings waste. O’Brien, a member of the Senate’s Environmental Conservation Committee, voiced concerns of the potential environmental damage that could be caused by the waste. This measure is supported by groups such as the New York League of Conservation Voters.
O’Brien’s proposal is one of several proposals targeted at hydraulic fracturing waste in New York. Another proposed bill requires municipal wastewater treatment facilities to satisfy additional statutory requirements before accepting hydrofracking wastewater. Other legislation targets the transportation of hydraulic fracturing byproducts into and from water treatment plants. In fact, local laws in Niagara Falls and Buffalo prohibit the transportation of those products.
Attempts to impose additional regulations on fracking have failed, however, to garner sufficient support in the State Senate. For more information about the bill proposals discussed above, please visit the New York State Senate website and review Bill S7783-2013 and Bill S5123A-2013.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
O’Brien’s proposal is one of several proposals targeted at hydraulic fracturing waste in New York. Another proposed bill requires municipal wastewater treatment facilities to satisfy additional statutory requirements before accepting hydrofracking wastewater. Other legislation targets the transportation of hydraulic fracturing byproducts into and from water treatment plants. In fact, local laws in Niagara Falls and Buffalo prohibit the transportation of those products.
Attempts to impose additional regulations on fracking have failed, however, to garner sufficient support in the State Senate. For more information about the bill proposals discussed above, please visit the New York State Senate website and review Bill S7783-2013 and Bill S5123A-2013.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
New York counties may ban fracking
The New York Court of Appeals, the state’s highest court, recently decided that county-wide fracking bans are not barred by §23-0303(2) of New York’s Environmental Conservation Law. The law contains a supersession clause that holds that state law shall “supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
The 5-2 court held that the supersession clause did not affect local laws that zoned where mining may or may not be conducted. Instead, it only affected local laws or ordinances that supplanted the state’s role as a regulator of operational, safety, and technical aspects of statewide oil and gas activities.
The majority stressed its neutrality on the issue of fracking, and claimed that “the discrete issues before us, and the only one we resolve today, is whether the state Legislature eliminated the home rule capacity of municipalities to pass zoning laws that exclude oil, gas, and hydrofracking activities in order to preserve the existing character of their communities.”
Areas of upstate New York sit atop the Marcellus Shale formation. New York has maintained a fracking moratorium since 2008. Approximately 30 cities in New York have enacted fracking bans, and upwards of 80 others are considering them.
Areas of upstate New York sit atop the Marcellus Shale formation. New York has maintained a fracking moratorium since 2008. Approximately 30 cities in New York have enacted fracking bans, and upwards of 80 others are considering them.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
Three-year moratorium on disposal of fracking waste in Connecticut
On May 7, 2014, the Connecticut legislature passed a three-year moratorium on the storage, treatment, disposal and transportation of all hydraulic fracturing waste within the state even though no fracking is being done and there are no facilities handling drilling waste.
Noting that this bill is “pre-emptive action,” the bi-partisan sponsors expressed concern that near-by New York state which is considering lifting its moratorium on hydraulic fracturing “could send waste to Connecticut.”
The moratorium is to allow the state’s Department of Energy and Environmental Protection (DEEP) to research the materials used in hydraulic fracturing and to “submit regulations to the Regulations Review Committee for approval after June 30, 2017 and no later than July 1, 2018.”
The regulations “must (1) subject the [fracking] wastes to the state’s hazardous waste management regulations; (2) ensure any radioactive components of the wastes do not pollute the air, land, or waters or otherwise threaten human health or the environment; and (3) require disclosure of the composition of the wastes.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
Noting that this bill is “pre-emptive action,” the bi-partisan sponsors expressed concern that near-by New York state which is considering lifting its moratorium on hydraulic fracturing “could send waste to Connecticut.”
The moratorium is to allow the state’s Department of Energy and Environmental Protection (DEEP) to research the materials used in hydraulic fracturing and to “submit regulations to the Regulations Review Committee for approval after June 30, 2017 and no later than July 1, 2018.”
The regulations “must (1) subject the [fracking] wastes to the state’s hazardous waste management regulations; (2) ensure any radioactive components of the wastes do not pollute the air, land, or waters or otherwise threaten human health or the environment; and (3) require disclosure of the composition of the wastes.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
Do state oil and gas laws trump local bans on hydraulic fracturing? Briefing continues in NY case
On August 29, 2013, New York state’s highest court agreed to hear an appeal of an order upholding a local ordinance banning all activities related to the exploration for, and production or storage of, natural gas and petroleum in the Town of Dryden, New York and affirming a lower court’s decision that certain amendments to the Town’s zoning ordinance were not preempted by the state’s Oil, Gas and Solution Mining Law (“OGSML”). Oral arguments are scheduled for June 3, 2014 (Case No. APL-2013-00245, New York State Court of Appeals).
A number of interested parties on both sides of the question have filed amicus briefs with the Court of Appeals.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
A number of interested parties on both sides of the question have filed amicus briefs with the Court of Appeals.
- On behalf of the 1.6 million residents of Manhattan, the Manhattan Borough President asserted that “municipalities are far better situated than the State to discern what land use is appropriate for their territory.”
- According to the Independent Oil and Gas Association of New York, Inc., the OGSML “unequivocally states that all local ordinance relating to oil and natural gas development are preempted.”
- A group of 26 businesses argued that “a municipality’s home rule authority to protect sustainable enterprises through the exercise of State-delegated zoning powers over potentially detrimental land uses” must be preserved.
- The American Petroleum Institute and the Chamber of Commerce of the United States of America assert that the town’s ordinance is invalid because it conflicts with the structure and purpose of the OGSML which vests exclusive authority over drilling operations to the state’s Department of Environmental Conservation and because it puts “at risk the efficacy of drilling across the State…”
- Several groups of landowners, farmers, labor unions, municipalities, and businesses joined to file an amicus brief urging that “decisions regarding the production of New York’s natural resources must be made by the experts at the State level and not by New York’s municipalities, each possessing varying degrees of expertise, and each making decisions in an individual vacuum without consideration for the important State interests and policies at issue.”
- Siding with the Town of Dryden, a group of land-use legal experts opined that a “presumption against preemption of local zoning laws is especially strong where the allegedly preemptive state law makes no provision for protecting the quiet enjoyment of land. It is simply implausible to infer that the state legislature intentionally conferred on the gas and oil extraction industry a statutory right to site a towering drill and accompanying truck traffic, waste pits, compressor stations, and the like next door to a quaint bed-and-breakfast in a rural hamlet or single-family home in a quiet residential suburb.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
EPA reviews states’ solid waste management regulations for oil and gas operations
In an April 1, 2014 memorandum, the U.S. Environmental Protection Agency (EPA) summarized state regulatory programs concerning the management of solid waste from oil and natural gas exploration, development and production (E&P) operations.
In reviewing each state’s regulations, the EPA focused on surface storage and disposal facilities managing produced waters, drilling muds, drilling cuttings, hydraulic fracturing return fluids, and various other waste liquids and materials intrinsically related to oil and gas E&P.
The EPA found that the state regulations were primarily concerned with the “technical requirements associated with the design, construction, operation, maintenance, closure, and reclamation of surface pits, ponds, lagoons or tanks, as well as financial assurance requirements associated with such facilities.”
Among the common parameters are state requirements for liners in pits and impoundments, secondary containment requirements for tanks, set-back requirements, and various inspection requirements. However, the EPA did find gaps in regulations relating to groundwater monitoring, leachate collection, air monitoring, and waste characterization.
Overall, with the review, the EPA had developed an understanding of the wide-range of state regulatory programs currently in place in the twenty-six (26) oil and gas producing states covered in the summary.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
In reviewing each state’s regulations, the EPA focused on surface storage and disposal facilities managing produced waters, drilling muds, drilling cuttings, hydraulic fracturing return fluids, and various other waste liquids and materials intrinsically related to oil and gas E&P.
The EPA found that the state regulations were primarily concerned with the “technical requirements associated with the design, construction, operation, maintenance, closure, and reclamation of surface pits, ponds, lagoons or tanks, as well as financial assurance requirements associated with such facilities.”
Among the common parameters are state requirements for liners in pits and impoundments, secondary containment requirements for tanks, set-back requirements, and various inspection requirements. However, the EPA did find gaps in regulations relating to groundwater monitoring, leachate collection, air monitoring, and waste characterization.
Overall, with the review, the EPA had developed an understanding of the wide-range of state regulatory programs currently in place in the twenty-six (26) oil and gas producing states covered in the summary.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
New York landowners sue state officials over delays in hydraulic fracturing decision
In mid-2008, the New York legislature passed regulations covering high volume hydraulic fracturing. Then-governor David Patterson ordered the DEC to conduct an environmental evaluation of fracking and horizontal wells and ordered the well approval process halted until the study was completed which was anticipated to be November 2009. A draft report was published in September 2009, but the DEC spent more than one year reviewing public comments. In December 2010, Patterson issued an executive order requiring further environmental review. Gov. Andrew Cuomo kept the order in place when he took office. In September 2012, the DEC and the Department of Health began a study of the health impacts associated with hydraulic fracturing. At a news conference on December 16, 2013, Gov. Cuomo and Dr. Nirav R. Shah, the New York State Health Commissioner, stated that there was no time-line to complete the study. Gov. Cuomo said, “My timeline is whatever commissioner Shah needs to do it right and feel comfortable.” The governor said he did not want “to put undue pressure on them that would artificially abbreviate what they’re doing.”
With no deadline in sight, on February 14, 2014, a group of more than 70,000 landowners and several other individual landowners filed a lawsuit against Gov. Cuomo, the DEC, the New York Department of Health (DOH), and Dr. Shah, complaining that the failure to finalize the supplemental generic environmental impact statement (SGEIS) has prevented them “from developing their mineral estates…or otherwise leasing or conveying their mineral estate, all of which has been detrimental and contrary to environmental and energy policies in the State of New York and the guarantees found in the Fifth and Fourteenth Amended to the United States Constitution.” The petitioners seek an order compelling completion of the SGEIS within a court-ordered deadline. They argue that Gov. Cuomo has exceeded his authority by orchestrating the delay in the SGEIS process and that the referral to the DOH was arbitrary, capricious, and an “improper delegation of the DEC’s substantive and procedural Lead Agency responsibilities” as required by the State Environmental Quality Review Act.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
With no deadline in sight, on February 14, 2014, a group of more than 70,000 landowners and several other individual landowners filed a lawsuit against Gov. Cuomo, the DEC, the New York Department of Health (DOH), and Dr. Shah, complaining that the failure to finalize the supplemental generic environmental impact statement (SGEIS) has prevented them “from developing their mineral estates…or otherwise leasing or conveying their mineral estate, all of which has been detrimental and contrary to environmental and energy policies in the State of New York and the guarantees found in the Fifth and Fourteenth Amended to the United States Constitution.” The petitioners seek an order compelling completion of the SGEIS within a court-ordered deadline. They argue that Gov. Cuomo has exceeded his authority by orchestrating the delay in the SGEIS process and that the referral to the DOH was arbitrary, capricious, and an “improper delegation of the DEC’s substantive and procedural Lead Agency responsibilities” as required by the State Environmental Quality Review Act.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
New York state sued over hydraulic fracturing moratorium
On December 17, 2013, the trustee for a bankrupt energy company and a shareholder in that company sued New York State’s Department of Environmental Conservation (“DEC”) and other state officials, including the governor, asserting that the shareholder has lost almost his entire investment of $21,305.52 due to the decrease in the value of the company’s stock and that the company has lost more than $100 million due to the hydraulic fracturing moratorium that has been in place since 2008.
The energy company has 27 well-permit applications pending before the DEC. As part of the bankruptcy proceedings, the trustee tried to sell these assets at auction, but received no bids. According to the complaint, “the only way to salvage the value of [the company’s] assets is to complete the SGEIS [Supplemental Generic Environmental Impact Statement] Process.” The plaintiffs seek a mandamus to compel completion of the SGEIS Process and a determination that government officials have “arbitrarily and capriciously, abused their discretion.”
In 2008, the New York legislature passed regulations covering hydraulic fracturing. Then-governor David Patterson ordered the DEC to conduct an environmental evaluation of fracking and ordered the well approval process halted until the study was completed which was anticipated to be November 2009. A draft report was published in September 2009, but the DEC spent more than one year reviewing public comments. In December 2010, Patterson issued an executive order requiring further environmental review. Gov. Andrew Cuomo kept the order in place when he took office. In September 2012, the DEC and the Department of Health began a study of the health impacts associated with hydraulic fracturing.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
The energy company has 27 well-permit applications pending before the DEC. As part of the bankruptcy proceedings, the trustee tried to sell these assets at auction, but received no bids. According to the complaint, “the only way to salvage the value of [the company’s] assets is to complete the SGEIS [Supplemental Generic Environmental Impact Statement] Process.” The plaintiffs seek a mandamus to compel completion of the SGEIS Process and a determination that government officials have “arbitrarily and capriciously, abused their discretion.”
In 2008, the New York legislature passed regulations covering hydraulic fracturing. Then-governor David Patterson ordered the DEC to conduct an environmental evaluation of fracking and ordered the well approval process halted until the study was completed which was anticipated to be November 2009. A draft report was published in September 2009, but the DEC spent more than one year reviewing public comments. In December 2010, Patterson issued an executive order requiring further environmental review. Gov. Andrew Cuomo kept the order in place when he took office. In September 2012, the DEC and the Department of Health began a study of the health impacts associated with hydraulic fracturing.
At a news conference on December 16, 2013, Gov. Cuomo and Dr. Nirav R. Shah, the New York State Health Commissioner, stated that there was no time-line to complete the study. Mr. Cuomo said, “My timeline is whatever commissioner Shah needs to do it right and feel comfortable.” The governor said he did not want “to put undue pressure on them that would artificially abbreviate what they’re doing.” Dr. Shah indicated that he was still conducting his review, collecting “new data from Texas and Wyoming.” When asked about transparency of the study, he stated that “the process needs to be transparent at the end, not during.” See Jesse McKinley, Still Undecided on Fracking, Cuomo Won’t Press for Health Study’s Release, N.Y. Times, December 16, 2013.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
Do state energy laws preempt municipal zoning ordinances banning oil and gas development?: Briefs filed in NY CASE
On May 2, 2013, a New York
state appeals court issued an order upholding a local ordinance banning all
activities related to the exploration for, and production or storage of,
natural gas and petroleum in the Town of Dryden, New York. The court affirmed
the judgment of the lower court, entered on February 22, 2012, which held that
certain amendments to the Town of Dryden zoning ordinance are not preempted by
New York State’s Oil, Gas and Solution Mining Law (“OGSML”). New York
State’s highest court (Case No. APL-2013-00245, New York State Court of
Appeals) agreed to hear an appeal of this
decision. See prior blogs, New York appeals court upholds local bans on hydraulic fracturing and NewYork Court of Appeals to consider local bans on hydraulic fracturing.
The movant filed its brief (see attached)
on October 28, 2013, asserting that “the Appellate Decision allows every
municipality in the State of New York to ban any and all oil and gas
development. The inevitable result is zero resource recovery, the
ultimate in waste, and the obliteration of mineral owners’ correlative
rights. This result starkly conflicts with the language and policies of
the OGSML and the Energy Law and, therefore, cannot stand.”
The Town of Dryden responded
in a brief dated December 13, 2013, arguing that the “OGSML does not expressly
preempt a locality’s right to enact a zoning ordinance that regulates land use
generally and designates oil and gas mining as a prohibited use within
municipal borders.” The Town urges that the two separate, distinct
regulatory schemes (the Town’s zoning ordinances and the policies of the OGSML)
can “harmoniously coexist.”
On December 13, 2013, the court received an amici curiae
brief (see attached) that was filed on behalf of 52 towns and villages
in New York, the Association of Towns of the State of New York, the New York
Conference of Mayors, and the New York Planning Federation. These
interested parties asserted that a local municipality has “the constitutionally
guaranteed right…to create and preserve its own community character through
generally applicable land use planning and zoning laws.” New York’s
energy law “preempts only local regulation of the operations of the oil and gas
industry, not local land use laws that govern whether and where such operations
may take place within a municipality’s borders.”
New York advocacy group sues Department of Health for disclosure of documents related to hydraulic fracturing
On September 13, 2013, the Seneca Lake Pure Waters Association, an advocacy group based in Finger Lakes, New York, sued the New York Department of Health (NYDOH), seeking the disclosure of documents related to the state’s review of hydraulic fracturing, which has been banned in New York since 2008.
The NYDOH is conducting an ongoing review of the state’s Supplemental Generic Environmental Impact Statement, which addresses permit conditions required for gas drilling in the Marcellus Shale and other areas of New York, to determine whether those guidelines would adequately protect public health.
In its filing, the group, which is critical of natural gas drilling and hydraulic fracturing, requested the disclosure of any factual documents or statistics that were used in the state’s decision-making process for banning hydraulic fracturing in the state.
The request was filed under Article 78 of New York’s Civil Practice Law, under which interested persons may challenge the decision of a state governmental body, agency, or official.
The Seneca Lake Pure Waters Association has previously filed requests under the Freedom of Information Law, seeking NYDOH documents used in the state Department of Environmental Conservation’s draft environmental review of large-scale hydraulic fracturing and the Health Commissioner’s assessment of that review.
This article was prepared by Lauren Brogdon (lauren.brogdon@nortonrosefulbright.com or 713 651 5375) from Norton Rose Fulbright's energy practice.
In its filing, the group, which is critical of natural gas drilling and hydraulic fracturing, requested the disclosure of any factual documents or statistics that were used in the state’s decision-making process for banning hydraulic fracturing in the state.
The request was filed under Article 78 of New York’s Civil Practice Law, under which interested persons may challenge the decision of a state governmental body, agency, or official.
The Seneca Lake Pure Waters Association has previously filed requests under the Freedom of Information Law, seeking NYDOH documents used in the state Department of Environmental Conservation’s draft environmental review of large-scale hydraulic fracturing and the Health Commissioner’s assessment of that review.
This article was prepared by Lauren Brogdon (lauren.brogdon@nortonrosefulbright.com or 713 651 5375) from Norton Rose Fulbright's energy practice.
New York Court of Appeals to Consider Local Bans on Hydraulic Fracturing
The New York Court of Appeals has granted Norse Energy Corporation USA leave to appeal the lower court decision in Norse v. Township of Dryden, that New York municipalities have the authority to ban oil and gas development in the state. Since there was no right to appeal, in granting this leave to appeal, the court sends a strong signal that the legal issues will get a fresh look by New York's highest court. The court also gave leave for the Washington Legal Foundation, the American Petroleum Institute, the New York Farm Bureau, and the Associated General Contractors of New York State LLC to file amicus briefs.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
Norse Energy seeks to stop the wave of local moratoriums and bans on hydraulic fracturing in more than 150 New York municipalities by asserting that the Oil Gas and Solution Mining Law (OGSML) preempts local rules, an argument rejected by the lower court judges. The four-judge panel from the Supreme Court, Appellate Division, Third Judicial Department held that the OGSML’s preemption provision “insure[s] uniform statewide standards and procedures with respect to the technical operation activities of the oil, gas and mining industries in an effort to increase efficiency while minimizing waste,” not to “usurp the authority traditionally delegated traditionally delegated to municipalities to establish permissible and prohibited uses of land within their jurisdictions.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
New York appeals court upholds local bans on hydraulic fracturing
On May 2, 2013, a New York state appeals court issued an order upholding a local ordinance banning all activities related to the exploration for, and production or storage of, natural gas and petroleum in the Town of Dryden, New York. The court affirmed the judgment of the lower court, entered on February 22, 2012, which held that certain amendments to the Town of Dryden zoning ordinance are not preempted by New York State’s Oil, Gas and Solution Mining Law (“OGSML”).
The appeals court also issued an order upholding a local ordinance banning natural gas drilling in the Town of Middlefield, New York. The court affirmed the judgment of the lower court, entered on August 8, 2012, which held that the Town of Middlefield’s zoning law was not preempted by the OGSML.
The two lower court opinions are discussed in our prior blog post on February 29, 2012, Two New York State Courts Uphold Local Bans on Hydraulic Fracturing.
On August 2, 2011 the Town of Dryden amended its zoning ordinance to “ban all activities related to the exploration for, and production or storage of, natural gas and petroleum,” which effectively banned all hydraulic fracturing in the area.
Anschutz Exploration Corporation, a driller and developer of oil and gas wells that owned leases covering approximately 22,200 acres in the Town of Dryden, then filed a declaratory judgment action seeking invalidation of the zoning amendment on the ground that it was preempted by the OGSML.
The lower court ruled in favor of the town, holding that the legislative intent of OGSML was not to preempt local zoning authority. Instead, the purpose of OGSML is to “regulate any development or production of such resources which may occur in a manner that prevents waste, permits greater ultimate recovery of oil and gas, and protects the correlative rights of all persons.”
On appeal, the appellate court affirmed the ruling of the lower court. The appellate court found that the zoning ordinance “does not seek to regulate the details or procedure of the oil, gas and solution mining industries. Rather, it simply establishes permissible and prohibited uses of land within the Town for the purpose of regulating land generally.” The court acknowledged that the zoning ordinance will inevitably have an incidental effect upon the oil and gas industry. Nonetheless, the court found that the OGSML does not preempt a municipality’s authority to enact a local zoning ordinance banning all activities related to the exploration for, and the production or storage of, natural gas and petroleum within its borders.
In June 2011, the Town of Middlefield enacted a new zoning law that categorized all oil, gas and solution mining and drilling as prohibited land uses within the town, which effectively banned all oil and gas drilling within the geographical borders of the township.
Cooperstown Holstein Corporation (“Cooperstown”), a company that owns oil and gas leases on real property in the Town of Middlefield, then filed a declaratory judgment action seeking a declaration that the zoning ordinance was preempted by the OGSML.
The lower court ruled against Cooperstown, holding that the zoning law was not preempted by the OGSML. The court looked to the legislative intent and history of the OGSML to determine that it “does not serve to preempt a local municipality such as defendant from enacting land use regulation within the confines of its geographical jurisdiction and, as such, local municipalities are permitted to permit or prohibit oil, gas and solution mining or drilling on conformity with such constitutional and statutory authority.”
The appellate court agreed with the lower court, affirming the court’s judgment that the Town of Middlefield’s zoning law is valid.
Both decisions are expected to be appealed.
_______________________________________________________________________
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice Group.
The appeals court also issued an order upholding a local ordinance banning natural gas drilling in the Town of Middlefield, New York. The court affirmed the judgment of the lower court, entered on August 8, 2012, which held that the Town of Middlefield’s zoning law was not preempted by the OGSML.
The two lower court opinions are discussed in our prior blog post on February 29, 2012, Two New York State Courts Uphold Local Bans on Hydraulic Fracturing.
Town of Dryden
Anschutz Exploration Corporation, a driller and developer of oil and gas wells that owned leases covering approximately 22,200 acres in the Town of Dryden, then filed a declaratory judgment action seeking invalidation of the zoning amendment on the ground that it was preempted by the OGSML.
The lower court ruled in favor of the town, holding that the legislative intent of OGSML was not to preempt local zoning authority. Instead, the purpose of OGSML is to “regulate any development or production of such resources which may occur in a manner that prevents waste, permits greater ultimate recovery of oil and gas, and protects the correlative rights of all persons.”
On appeal, the appellate court affirmed the ruling of the lower court. The appellate court found that the zoning ordinance “does not seek to regulate the details or procedure of the oil, gas and solution mining industries. Rather, it simply establishes permissible and prohibited uses of land within the Town for the purpose of regulating land generally.” The court acknowledged that the zoning ordinance will inevitably have an incidental effect upon the oil and gas industry. Nonetheless, the court found that the OGSML does not preempt a municipality’s authority to enact a local zoning ordinance banning all activities related to the exploration for, and the production or storage of, natural gas and petroleum within its borders.
Town of Middlefield
Cooperstown Holstein Corporation (“Cooperstown”), a company that owns oil and gas leases on real property in the Town of Middlefield, then filed a declaratory judgment action seeking a declaration that the zoning ordinance was preempted by the OGSML.
The lower court ruled against Cooperstown, holding that the zoning law was not preempted by the OGSML. The court looked to the legislative intent and history of the OGSML to determine that it “does not serve to preempt a local municipality such as defendant from enacting land use regulation within the confines of its geographical jurisdiction and, as such, local municipalities are permitted to permit or prohibit oil, gas and solution mining or drilling on conformity with such constitutional and statutory authority.”
The appellate court agreed with the lower court, affirming the court’s judgment that the Town of Middlefield’s zoning law is valid.
Both decisions are expected to be appealed.
_______________________________________________________________________
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Barclay Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice Group.
New York Assembly Approves Two-Year Moratorium on Hydraulic Fracturing
On March 6, 2013, the New York State Assembly voted to place a temporary moratorium on all permits for high-volume hydraulic fracturing gas wells until May 2015. The bill was sponsored by Assembly Committee on Environmental Conservation Chairman Kevin K. Sweeney, and would extend a de facto moratorium that has existed in New York for over four years.
The bill also calls for the State University of New York to conduct an independent health review of the effects of hydraulic fracturing.
The bill will be brought before the New York Senate and, if approved there, will be sent to New York Governor Andrew Cuomo for final approval.
The bill will be brought before the New York Senate and, if approved there, will be sent to New York Governor Andrew Cuomo for final approval.
On March 5, 2013, Democratic members of the New York Senate introduced a bill that would require the state to wait to rule on whether hydraulic fracturing should be banned until after the U.S. EPA releases its final study on the effects of the process on drinking water, and the New York Health Commissioner reviews the results of a similar study conducted by the Geisinger Health System, a health care company in Pennsylvania.
This article was prepared by Lauren Brogdon (lbrogdon@fulbright.com or 713 651 5375) from Fulbright’s Litigation Practice Group.
This article was prepared by Lauren Brogdon (lbrogdon@fulbright.com or 713 651 5375) from Fulbright’s Litigation Practice Group.
Pennsylvania, New York, and Texas Address Radioactivity Associated with Hydraulic Fracturing Operations
On January 24, 2013, the Pennsylvania Department of Environmental Protection (“DEP”) launched a study to examine naturally occurring radiation associated with the development of oil and natural gas in the state.
DEP plans to collect samples of flowback water, rock cuttings, treatment solids and sediments at well pads and wastewater treatment and waste disposal facilities to analyze the naturally occurring levels of radioactivity in those substances.
The study will also examine radiation levels in pipes, well casings, storage tanks, treatment systems, and trucks. According to DEP, the study is expected to take 12 to 14 months. The agency will provide progress reports to its water, waste, radiation, and citizens’ advisory councils throughout that period.
New York State has also recently analyzed radiation levels associated with hydraulic fracturing operations in the state, finding that “significant adverse impacts on human health are not expected from routine [high volume hydraulic fracturing] operations.”
In addition to examining naturally occurring radioactivity in drilling wastes, the study, which was publicly leaked in the New York Times on January 3, 2013, also analyzed the possibility of water contamination and air emissions, finding that both were likewise “below levels of significant health concern.”
Texas has also acknowledged the relative safety of radioactive material in hydraulic fracturing fluids. On January 30, 2013, the Texas Commission on Environmental Quality (“TCEQ”) issued a draft rule that would create an exemption from the TCEQ low-level radioactive waste licensing requirement for the disposal of certain radioactive tracers used in the exploration, development, or production of oil and gas resources.
The exemption would only apply to those who already hold a state license to use, store, and transfer radioactive material, and would allow for the continuation of the industry practice of utilizing on-site disposal pits or Class II injection wells for the disposal of radioactive tracers.
The TCEQ memorandum proposing the regulation stated that without the licensing exemption, “the regulated community is left without a longstanding and economical practice for disposal of the material.”
The anticipated public hearing date on the rule is March 5, 2013, with an anticipated public comment period of February 15, 2013, to March 18, 2013. The anticipated adoption date is June 5, 2013.
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Lauren Brogdon (lbrogdon@fulbright.com or 713 651 5375) from Fulbright's Litigation Practice Group.
DEP plans to collect samples of flowback water, rock cuttings, treatment solids and sediments at well pads and wastewater treatment and waste disposal facilities to analyze the naturally occurring levels of radioactivity in those substances.
The study will also examine radiation levels in pipes, well casings, storage tanks, treatment systems, and trucks. According to DEP, the study is expected to take 12 to 14 months. The agency will provide progress reports to its water, waste, radiation, and citizens’ advisory councils throughout that period.
New York State has also recently analyzed radiation levels associated with hydraulic fracturing operations in the state, finding that “significant adverse impacts on human health are not expected from routine [high volume hydraulic fracturing] operations.”
In addition to examining naturally occurring radioactivity in drilling wastes, the study, which was publicly leaked in the New York Times on January 3, 2013, also analyzed the possibility of water contamination and air emissions, finding that both were likewise “below levels of significant health concern.”
Texas has also acknowledged the relative safety of radioactive material in hydraulic fracturing fluids. On January 30, 2013, the Texas Commission on Environmental Quality (“TCEQ”) issued a draft rule that would create an exemption from the TCEQ low-level radioactive waste licensing requirement for the disposal of certain radioactive tracers used in the exploration, development, or production of oil and gas resources.
The exemption would only apply to those who already hold a state license to use, store, and transfer radioactive material, and would allow for the continuation of the industry practice of utilizing on-site disposal pits or Class II injection wells for the disposal of radioactive tracers.
The TCEQ memorandum proposing the regulation stated that without the licensing exemption, “the regulated community is left without a longstanding and economical practice for disposal of the material.”
The anticipated public hearing date on the rule is March 5, 2013, with an anticipated public comment period of February 15, 2013, to March 18, 2013. The anticipated adoption date is June 5, 2013.
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Lauren Brogdon (lbrogdon@fulbright.com or 713 651 5375) from Fulbright's Litigation Practice Group.
New York's Proposed Hydraulic Fracturing Rules
Several New York lawmakers are holding a public hearing on January 10, 2013 to discuss the state’s high volume hydraulic fracturing (HVHF) regulatory process.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
New rules relating to HVHF were proposed and opened for public comment beginning November 29, 2012 through January 11, 2013.
In addition to the legislators, the League of Women Voters of New York State (LWVNY) sent a letter dated January 7, 2013 to the New York Department of Environmental Conservation (NYSDEC), questioning the feasibility of providing meaningful comments without the completion of the state-commissioned study on the health impacts of expanded gas drilling or the final status of the state environmental impact review.
These concerns increased after last week’s press release of a draft February 2012 report, indicating that hydraulic fracturing can be done safely. The lawmakers, LWVNY, and others want to suspend the public comment period for the proposed HVHF rules until the state discloses all of its studies and analyses concerning hydraulic fracturing.
The NYSDEP has until the end of February to finalize its rules for fracking. If the February deadline is missed, the NYSDEC will need to reissue the regulations and hold public hearings, thus delaying the approval of any fracking rules for many months.
Read the notice of hearing.
Read the notice of hearing.
Read the LWVNY letter.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
New York DEC "Leaks" Summary on Impact Fracking Has on Health
On January 3, 2013, a draft February 2012 report that was prepared for the New York Department of Environmental Conservation (DEC) relating to potential health impacts from hydraulic fracturing was “leaked” to the news media.
Read the eight-page draft report.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
The eight-page draft summary concludes that “significant adverse impacts on human health are not expected from routine HVHF [high volume hydraulic fracturing] operations” if done within the DEC’s proposed regulatory framework.
A DEC spokeswoman dismissed the draft as outdated, not reflecting the DEC’s policy, and incomplete.
This draft was probably prepared for review and inclusion in an extensive environmental impact study of the shale gas industry which is to be released by the DEC in February 2013.
The DEC has stated that this final February 2013 version will include revisions based on public comments and a health review currently under way by the New York Health Department and three outside experts.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
NYDEC Publishes Revised Proposed High-Volume Fracking Regulations
On Thursday, November 29, 2012, the New York Department of Environmental Conservation (NYDEC) published revised proposed regulations relating to high-volume hydraulic fracturing (wells using more than 300,000 gallons of water as the base fluid).
The NYDEC developed these revisions and additions after receiving more than 66,000 public comments (most against hydraulic fracturing) on the original proposals that were released on September 28, 2011.
The 30-day public comment period on the revised proposed regulations begins on December 12, 2012, and allows a 90-day extension for completion of the New York Commissioner of Health’s review of the draft Supplemental Generic Environmental Impact Statement.
The NYDEC advised that it would not take any final action or make any final decision regarding hydraulic fracturing until after the health review and the work from three outside experts—Colorado School of Public Health professor John Adgate, George Washington University School of Public Health and Health Services professor Lynn Goldman, and University of California Los Angeles Fielding School of Public Health professor Richard Jackson—is completed.
According to the NYDEC, “the proposed regulations are to apply to the use [of fracking] statewide,” with the initial targets being the Marcellus and Utica shale formations.
The revised proposals include additional reporting requirements for drillers who want to re-fracture an existing well and allow for public and private water treatment plants to accept fracking waste water.
The proposed revised regulations for high-volume hydraulic fracturing include requirements for blow-out preventer use and testing plans, detailed mapping, enhanced disclosure of chemical additives, and well pad siting setbacks.
The chemical disclosure must identify each chemical constituent intentionally added to the base fluid and its proposed concentration.
There are also new well construction, site preparation, operational, and maintenance requirements.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
The NYDEC developed these revisions and additions after receiving more than 66,000 public comments (most against hydraulic fracturing) on the original proposals that were released on September 28, 2011.
The 30-day public comment period on the revised proposed regulations begins on December 12, 2012, and allows a 90-day extension for completion of the New York Commissioner of Health’s review of the draft Supplemental Generic Environmental Impact Statement.
The NYDEC advised that it would not take any final action or make any final decision regarding hydraulic fracturing until after the health review and the work from three outside experts—Colorado School of Public Health professor John Adgate, George Washington University School of Public Health and Health Services professor Lynn Goldman, and University of California Los Angeles Fielding School of Public Health professor Richard Jackson—is completed.
According to the NYDEC, “the proposed regulations are to apply to the use [of fracking] statewide,” with the initial targets being the Marcellus and Utica shale formations.
The revised proposals include additional reporting requirements for drillers who want to re-fracture an existing well and allow for public and private water treatment plants to accept fracking waste water.
The proposed revised regulations for high-volume hydraulic fracturing include requirements for blow-out preventer use and testing plans, detailed mapping, enhanced disclosure of chemical additives, and well pad siting setbacks.
The chemical disclosure must identify each chemical constituent intentionally added to the base fluid and its proposed concentration.
There are also new well construction, site preparation, operational, and maintenance requirements.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) from Fulbright's Energy Practice.
Niagara Falls, NY Issues Ban on Hydraulic Fracturing
Ironically, the Marcellus Shale does not extend under the City of Niagara Falls.
Therefore, the ban on hydraulic fracturing likely will have little or no impact on natural gas drilling in the area.
However, the Niagara Falls Water Board previously had hoped to increase revenues by treating flowback and produced water generated in the Marcellus Shale region in the city’s wastewater treatment plant.
The City Council also unanimously passed a resolution titled “Dangers of Hydraulic Fracturing in New York State," which supports a ban on hydraulic fracturing throughout the State of New York.
The resolution will be sent to New York Governor Cuomo for consideration. The City of Buffalo, New York is expected to approve a similar resolution today.
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group and Shale and Hydraulic Fracturing Task Force.
Two New York State Courts Uphold Local Bans on Hydraulic Fracturing
On February 21,
2012, a New York state court issued an order upholding a local ordinance
banning all activities related to the exploration for, and production or
storage of, natural gas and petroleum in the Town of Dryden, New York.
In a case of first impression, the court in Anschutz Exploration Corp. v. Town of Dryden held that New York State’s Oil, Gas and Solution Mining Law (“OGSML”) did not preempt local zoning authority.
The petitioner-plaintiff, Anschutz Exploration (“Anschutz”), owns gas leases covering approximately 22,200 acres in the town of Dryden in upstate New York.
On August 2, 2011, the town of Dryden amended its Zoning Ordinance to “ban all activities related to the exploration for, and production or storage of, natural gas and petroleum,” which effectively banned all hydraulic fracturing in the area.
Anschutz then filed a declaratory judgment action seeking invalidation of the zoning amendment on the ground that it was preempted by the OGSML.
The court ruled in favor of the town, holding that the legislative intent of OGSML was not to preempt local zoning authority. Instead, the purpose of OGSML is to “regulate any development or production of such resources which may occur in a manner that prevents waste, permits greater ultimate recovery of oil and gas, and protects the correlative rights of all persons.”
On February 24, 2012, a second New York state court upheld a local ban on natural gas drilling. In Cooperstown Holstein Corp. v. Town of Middlefield, Judge Donald F. Cerio, Jr. upheld the New York Town of Middlefield’s local zoning law, implemented on June 14, 2011, which “effectively banned oil and gas drilling within the geographical borders of the township.” Cooperstown Holstein Corp. v. Town of Middlefield, No. 2011-0930 (N.Y. Sup. Ct. Feb. 24, 2012).
The Plaintiff, Cooperstown Holstein, claimed that the New York State Environmental Conservation Law (“ECL”) preempts local authorities from enforcing regulations relating to the regulation of gas, oil and solution drilling or mining due to its plain language, which states:
Both decisions are expected to be appealed.
New York’s Department ofEnvironmental Conservation, which recently issued a 1,500-page report and set of draft regulations, is currently reviewing comments on those proposed new regulations, and the final rule on hydraulic fracturing could be released as soon as the end of the year.
New York has had a moratorium on hydraulic fracturing and horizontal gas drilling permits since 2008.
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) and Kristen Roche (kroche@fulbright.com or 713 651 5303) from Fulbright's Environmental Law Practice Group.
In a case of first impression, the court in Anschutz Exploration Corp. v. Town of Dryden held that New York State’s Oil, Gas and Solution Mining Law (“OGSML”) did not preempt local zoning authority.
The petitioner-plaintiff, Anschutz Exploration (“Anschutz”), owns gas leases covering approximately 22,200 acres in the town of Dryden in upstate New York.
On August 2, 2011, the town of Dryden amended its Zoning Ordinance to “ban all activities related to the exploration for, and production or storage of, natural gas and petroleum,” which effectively banned all hydraulic fracturing in the area.
Anschutz then filed a declaratory judgment action seeking invalidation of the zoning amendment on the ground that it was preempted by the OGSML.
The court ruled in favor of the town, holding that the legislative intent of OGSML was not to preempt local zoning authority. Instead, the purpose of OGSML is to “regulate any development or production of such resources which may occur in a manner that prevents waste, permits greater ultimate recovery of oil and gas, and protects the correlative rights of all persons.”
On February 24, 2012, a second New York state court upheld a local ban on natural gas drilling. In Cooperstown Holstein Corp. v. Town of Middlefield, Judge Donald F. Cerio, Jr. upheld the New York Town of Middlefield’s local zoning law, implemented on June 14, 2011, which “effectively banned oil and gas drilling within the geographical borders of the township.” Cooperstown Holstein Corp. v. Town of Middlefield, No. 2011-0930 (N.Y. Sup. Ct. Feb. 24, 2012).
The Plaintiff, Cooperstown Holstein, claimed that the New York State Environmental Conservation Law (“ECL”) preempts local authorities from enforcing regulations relating to the regulation of gas, oil and solution drilling or mining due to its plain language, which states:
the provisions of this article shall supercede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supercede local government jurisdiction over local roads or the rights of local governments under the real property law.”The court looked to the legislative intent and history of the clause to determine that it “does not serve to preempt a local municipality such as defendant from enacting land use regulation within the confines of its geographical jurisdiction and, as such, local municipalities are permitted to permit or prohibit oil, gas and solution mining or drilling on conformity with such constitutional and statutory authority.”
Both decisions are expected to be appealed.
New York’s Department ofEnvironmental Conservation, which recently issued a 1,500-page report and set of draft regulations, is currently reviewing comments on those proposed new regulations, and the final rule on hydraulic fracturing could be released as soon as the end of the year.
New York has had a moratorium on hydraulic fracturing and horizontal gas drilling permits since 2008.
This article was prepared by Heather M. Corken (hcorken@fulbright.com or 713 651 8386) and Kristen Roche (kroche@fulbright.com or 713 651 5303) from Fulbright's Environmental Law Practice Group.
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