In a decision that could set a national precedent for how local governments can regulate gas drilling, a New York state court yesterday ruled for the first time that towns have the right to ban drilling despite a state regulation asserting they cannot.
At issue was a zoning law in Dryden, a township adjacent to Ithaca and the Cornell University campus, where drilling companies have leased some 22,000 acres for drilling. In August, Dryden's town board passed a zoning law that prohibits gas drilling within town limits. The next month, Denver-based Anschutz Exploration Corp. sued the town, saying the ban was illegal because state law trumped the municipal rules.
As Anschutz noted, New York law promotes the development of oil and gas resources in the state. State Supreme Court Justice Phillip Rumsey addressed this point in his decision, writing: "Nowhere in legislative history provided to the court is there any suggestion that the Legislature intended — as argued by Anschutz — to encourage the maximum ultimate recovery of oil and gas regardless of other considerations, or to preempt local zoning authority."
The Dryden case is merely the latest in a string of similar conflicts arising from Colorado to Pennsylvania that pit local communities against state oil and gas laws. It is common for local governments to zone industrial or commercial land, or to institute ordinances for noise or traffic. When it comes to the development of natural resources like oil and gas, the industry contends that local government shouldn't make those decisions.
In New York, the controversy over state regulation of fracking has been brewing for years. In 2008, New York effectively put drilling on hold while it launched an environmental analysis of fracking, a process that uses a mix of highly pressurized water, sand and other chemicals to crack the earth deep underground. This is the first ruling on an industry effort to use the mineral extraction law to get around local bans.
In addition to the environmental and health concerns over fracking, which we've covered in depth, a fundamental issue has been the rights of localities against state or federal laws. According to Eric Goldstein, a senior attorney for the Natural Resources Defense Council in New York, the right of local governments to determine their own land use has been guaranteed by the Constitution for over a century.
"The argument is simple," said Goldstein. "New York state laws shouldn't override the authority of local governments to protect their constituents."
In New York, two very similarly worded laws govern the regulation of mining and oil and gas drilling. The oil and gas provision gives the state the power to "regulate the development, production and utilization of natural resources of oil and gas." The town of Dryden argued that it was not trying to regulate fracking but merely trying to protect its citizens and property. It pointed out that courts have allowed towns to ban mining, and said Dryden should be allowed to do the same for fracking. The justice seemed to agree, concluding that the state's oil and gas laws don't prohibit localities from barring drilling.
Anschutz's lawyer, Thomas West, said he was not sure whether the company would appeal the decision. Even if it does so, said Joseph Heath, an environmental attorney in New York, Tuesday's win could help set a precedent for other communities. Despite the threat of similar lawsuits from a major corporation, local fracking bans and moratoriums have continued to grow in the last few years.
"People are now concentrating on local governments because that's the best form of protection against fracking," said Heath.
Such protection is unlikely to come from the states, as New York's Department of Environmental Conservation has already deferred to the courts. When ProPublica interviewed the commissioner last year, we asked him specifically about the potential for conflict between local municipalities and states. He said it was likely "that the courts will need to decide these issues in a lawsuit between the town and the drilling company, not the state." Now, it looks as if at least one court has decided.
"[The Dryden case] is an important indicator of how those battles are likely to play out," said the NRDC's Goldstein, "although it's not the final word."