Regardless over how the New York Court of Appeals rules in a pair of cases on localities' power to enact bans on oil and gas activities, the state legislature will insert itself into the debate at some point in the future, a former state official said Wednesday.
Gregory Sovas, former director of the Department of Environmental Conservation's (DEC) Division of Mineral Resources, also blamed regulators who came aboard during changes in the state's administrations for the current state of affairs: a de facto statewide ban on high-volume hydraulic fracturing (HVHF) and the two legal challenges involving the towns of Dryden and Middlefield.
"I don't see how there's going to be [oil and gas] industry investment without the supersedure provision," Sovas said during an online presentation sponsored by the Empire Energy Forum. "The state has an extensive environmental regulatory framework [for both gas drilling and pipelines]. I don't see any need for local ordinances or regulation.
"But no matter which side of this comes out, I think the legislature is sure to weigh in one way or another."
Cooperstown Holstein Corp. is suing Middlefield in Otsego County, and Norse Energy Corp., now bankrupt, is protesting the ban in Dryden, which is in Tompkins County (Norse Energy Corp. USA v. Town of Dryden, No. 515227, and Cooperstown Holstein Corp. v. Town of Middlefield, No. 515498). Cooperstown Holstein in a dairy operation whose owners leased 400 acres for natural gas development. New York-focused Norse has about 130,000 acres to develop, but it has declared bankruptcy and is moving ahead with an asset sale.
The Court of Appeals accepted both cases in August. A lower appellate court ruled unanimously in favor of the towns in May (see Shale Daily, Aug. 30; May 6).
"The Court of Appeals decided to hear these cases, which may be an omen what's going to happen in the future," Sovas said. He added that the cases will be argued in early 2014, with a decision expected by spring.
Sovas said the DEC conducted a generic environmental impact statement (GEIS) of the State Environmental Quality Review (SEQR) in 1992. He said that at the time, the entire regulatory program was assessed, and state permit conditions were developed for well casing and cementing, wildcat conditions and aquifer protections.
But in 2008, a supplemental GEIS (SGEIS) was ordered by then-Gov. David Paterson, in order to address new technologies such as HVHF, horizontal drilling, disposal issues and the impact to local governments, especially in terms of longer drilling times and additional truck traffic (see Daily GPI, July 28, 2008).
"The real problem is that with the SGEIS, there was a new interpretation. It imposed a new condition to seek local approval and consistency with land use," Sovas said. "This was never there before because of supersedure, and [the DEC] wasn't clear on how they were going to do that.
"But in their mind, the DEC said local governments should have a say in whether or not drilling can occur in a location, and that empowered locals to make plans, laws, bans and moratoria. As you know, that resulted in divisiveness, lawsuits and unworkable situations for companies."
Sovas added that "it's anybody's guess" over when the state Department of Health will complete a health impact analysis of HVHF, and for the DEC to complete an SGEIS on the practice (see Shale Daily, Sept. 24, 2012). But he blamed personnel who came aboard during the transitions to Paterson and his successor, Gov. Andrew Cuomo.
"The new people thought that they were complying with SEQR by referring to the community plans," Sovas said. "But in doing so, they violated the supersedure law and the Oil, Gas and Solution Mining Law.
"Part of the problem is that people -- attorneys and judges included -- in our state do not understand oil and gas law because they've never faced it. The lawyers when they get to court, they need to educate the judges on oil and gas law, and why that's so much different from traditional zoning and environmental laws."