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Driller Threatens Lawsuit Over New York Drilling Bans

Lenape Resources Inc., an oil and natural gas producer based in New York, is threatening to sue the state's Department of Environmental Conservation (DEC) if the agency doesn't advise three towns in Livingston County that they don't have the authority to enact local drilling bans.

In a three-page letter to DEC Commissioner Joseph Martens dated July 26, Lenape President John Holko said the towns of Avon, Caledonia and York are violating a 1981 state statute known as the Environmental Conservation Law.

"Lenape respectfully requests that your office, as the regulatory body with authority over Lenape's oil and gas industry activities in New York State...advise the towns that [their ordinances are] an illegal and unenforceable act," Holko wrote to Martens. He also urged the DEC to affirm to Lenape that the company wasn't subject to the local ordinances, and that the agency or the state attorney general would take legal action against the towns if necessary.

"Given the importance of these issues to Lenape's continued operations in New York, please take the requested action within 10 days," Holko said, adding that Lenape may initiate legal action and name the DEC as a defendant if the state doesn't take action before the deadline. It wasn't clear if the company was planning to file a lawsuit against the towns as well.

Holko's correspondence included a sample letter the DEC sent to the City of Olean on March 28, 1984, when the city was considering an oil and gas drilling ordinance. In that letter, Charles Sullivan Jr., the agency's legal counsel, advised Mayor William Smith that the city "is without statutory authority to regulate any of the matters set forth in the proposed ordinance pertaining to oil and gas wells."

After the Avon Town Board passed a one-year moratorium that essentially bans all oil and natural gas activities, Lenape, which is the only company now drilling in the area, shuttered its wells and pipelines in the town, which resulted in halting royalty payments and free natural gas for landowners (see NGI, July 16).

Lenape's 16 vertical wells in Avon are said to be less than 2,000 feet and were hydraulically fractured with small stimulation treatments, a process that is legal in New York. According to Lenape, none of the wells used high-volume hydraulic fracturing (HVHF), which currently is not allowed under a statewide moratorium.

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