MUNICIPALITIES AND NATURAL GAS EXTRACTION WHAT THE FRACK?

Transcription

1 MUNICIPALITIES AND NATURAL GAS EXTRACTION WHAT THE FRACK? S TEINVURZEL L AW GROUP P. C.

2 In the State of New York the war over natural gas extraction is being fought from the ground up.

3 Why Are Municipalities Getting Involved? Deteriorating Roads Damaged Vegetation Increased Noise and Traffic Pollution Dangers associated with transporting potentially hazardous fracking fluid over local roadways Potential for local groundwater contamination Local Citizen Input

4 Two recent decisions handed down by the New York State Supreme Court are the first to restrict hydrofracking using local land use regulations. Cooperstown Holstein v. Town of Middlefield, 943 N.Y.S.2d 722 (N.Y. Sup. Ct. 2012). Anschutz Exploration v. Town of Dryden, 940 N.Y.S.2d 458 (N.Y. Sup. Ct. 2012).

5 Cooperstown Holstein v. Town of Middlefield, 943 N.Y.S.2d 722 (N.Y. Sup. Ct. 2012). The Town of Middlefield passed a zoning law prohibiting any and all oil, gas or solution mining and drilling within the municipality. Cooperstown Holstein Corp. had previously signed two oil and gas leases authorizing Elexco Land Services, Inc. to drill and extract natural gas beneath its land.

6 Cooperstown Holstein v. Town of Middlefield, 943 N.Y.S.2d 722 (N.Y. Sup. Ct. 2012). Cooperstown brought suit, arguing that the Middlefield zoning law is preempted by the New York State Oil, Gas and Solution Mining Law (OGSML).

7 Anschutz Exploration v. Town of Dryden, 940 N.Y.S.2d 458 (N.Y. Sup. Ct. 2012). In response to concerns from residents, the Town of Dryden amended its Zoning Ordinance to list exploration for or extraction of natural gas and/or petroleum as a prohibited use. Anschutz Exploration previously owned gas leases covering approximately 1/3 of the Town of Dryden and invested over $5 million within the town.

8 Anschutz Exploration v. Town of Dryden, 940 N.Y.S.2d 458 (N.Y. Sup. Ct. 2012). Anschutz Exploration brought suit, arguing that the Dryden zoning law is preempted by the New York State Oil, Gas and Solution Mining Law (OGSML).

9 OGSML Supersession Clause 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 tax law.

10 OGSML supersession clause 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 tax law.

11 OGSML does not supercede for several reasons: 1. Plain reading of the statutory language 2. A look at the legislative history of OGSML 3. The 1978 Amendment to OGSML 4. The 1978 Amendment to the New York State Energy Law 5. Precedent

12 Legislative History: Since its enactment in 1963, the legislative history of the OGSML has been silent with regard to the impact or preemption by state or local municipal land use regulation.

13 1978 Amendments: The 1978 amendments to OGSML clearly separated the promotion of energy extraction from the regulation of energy extraction language: It is hereby declared to be in the public interest to foster, encourage and promote the development, production and utilization of natural resources of oil and gas in this state 1978 language: It is hereby declared to be in the public interest to regulate the development, production and utilization of natural resources of oil and gas in this state

14 1978 Amendments: The same 1978 legislation also amended the New York State Energy Law, granting the (former) Energy Office the authority to promote and develop indigenous State energy resources.

15 Precedent: Both the Cooperstown Holstein and Anshultz Exploration cases relied on two opinions from the New York Court of Appeals that dealt with this issue in the context of a different statute.

16 Case Holdings Cooperstown Holstein The supersedure clause in the OGSML was not intended by New York State Legislature to abrogate the constitutional and statutory authority vested in local municipalities to enact legislation affecting land use. Anschutz Exploration The Town s zoning amendment is not preempted from utilizing its police powers, even if such exercise may effectuate a de facto ban on oil and gas exploration.

17 Absent a clear expression of legislative intent to preempt local control over land use and zoning, it appears that the war on hydrofracking will be decided one municipality at a time.

18 Municipalities are a powerful vehicle for banning mining and extraction operations. -BUT- Oil and gas prices are in flux and when there is an upward trend, exploration becomes more profitable; Extraction brings a quick buck to landowners and the promise of job creation; and The fears associated with U.S. dependence on foreign petroleum are ongoing. Only one thing is clear: The fight is long from over.

19 The End. MUNICIPALITIES AND NATURAL GAS EXTRACTION WHAT THE FRACK? S TEINVURZEL L AW GROUP P. C.