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New York Town's Drilling Ban Upheld

A judge in New York State has ruled that an ordinance and a zoning requirement enacted last year by the town of Dryden, NY, essentially banning all Marcellus Shale oil and gas activities in the municipality, are not preempted by state law and can remain in effect.

In a 29-page ruling issued Tuesday, Tompkins County Supreme Court Judge Phillip Rumsey disagreed with Anschutz Exploration Corp. (AEC) that the town's actions violated the state Oil, Gas and Solution Mining Law.

"Obviously we're disappointed with the decision, but we remain confident in our legal position that municipalities do not have the authority to ban natural gas drilling in New York State," said Thomas West, an attorney with The West Firm PLLC in Albany, NY, who is representing AEC. He told NGI's Shale Daily that the law firm would be "discussing with Anschutz whether or not they want to take an appeal. That will be a business decision for them to make based upon the cost of the appeal, etc."

The West Firm is also involved in the legal battle with Middlefield, NY, which also used a zoning law to ban drilling operations (see Shale Daily, Sept. 19, 2011). A decision in that case could be announced in the next several months.

"It's a pure issue of law, so the judge in the Middlefield case does not have to follow Justice Rumsey's decision; he can decide it whatever way he believes is appropriate," West said.

Rumsey's ruling may affect the outcome of the Middlefield case, West said. "Some judges might be inclined to follow the analysis that Justice Rumsey put forth. But we remain confident in our position that his analysis is not correct and that New York law does preempt municipalities from zoning or prohibiting natural gas drilling. So it is theoretically possible that the judge in the Middlefield case could reach a different conclusion.

"We're also confident that one of these cases at least will end up going through the appellate process in New York. I think everybody recognizes that we need appellate guidance on this issue. We're reasonably confident that the Middlefield case will go up on appeal whichever way it comes out."

West filed a lawsuit against Dryden on AEC's behalf last September (see Shale Daily, Sept. 21, 2011). He also filed a request for an Article 78 proceeding, which under New York law can be used to challenge a municipality's actions.

At its meeting last August the Dryden Town Board unanimously approved a resolution prohibiting natural gas exploration and extraction and a zoning ordinance declaring gas activities to have a negative impact under the State Environmental Quality Review Act (SEQR).

Denver-based AEC has 22,200 gross acres of leasehold in the town -- 39% of its territory -- and is permitted to drill wells in the Trenton-Black River formation.

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