The New York Court of Appeals on Thursday agreed to review two lawsuits that protest bans on unconventional drilling, and specifically hydraulic fracturing (fracking), that were imposed by Middlefield and Dryden, Southern Tier municipalities that top the Marcellus Shale.
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 declared bankruptcy last year and is moving ahead with an asset sale.
The Court of Appeals accepted the two cases without comment. A court spokesman said if the cases proceed on a “normal” course, they would be argued before the high court, which would rule sometime in early 2014. No filings had been made as of midday Thursday to expedite the cases.
The high court will review a unanimous ruling in May by the New York Appellate Division (see Shale Daily,May 6). The Appellate Division justices had cited home-rule laws in the motions for the defense, ruling that nothing in the state’s Oil, Gas and Solution Mining Law had removed the ability of localities to institute bans that were voted into force.
“The plain language of this provision prohibits municipalities from enacting laws or ordinances ‘relating to the regulation of the oil, gas and solution mining industries,” wrote Appellate Division Justice Karen Peters. “The zoning ordinance at issue, however, does not seek to regulate the details or procedure of the oil, gas and solution mining industries. Rather, it simply establishes permissible and prohibited uses of land within the town for the purpose of regulating land generally.”
Many observers, including lawyers representing the energy companies, had thought the Appellate Division’s decision would be the final straw for producers. Lawyer Thomas West, who is representing Dryden, said then the ruling was “another nail in the coffin for drilling in New York” because operators weren’t going to invest in drilling rights that could be taken away on municipality bans.
In its appeal, the plaintiffs argued that the lawsuits were worthy of more scrutiny.
In reaction to the Appeals Court’s decision to rehear the cases, the pro-drilling Joint Landowners Coalition, which represents landowners in the Southern Tier of the state, said “77,000 landowners are ecstatic over the New York State Court of Appeals’ decision to review the lower court rulings in the Middlefield and Dryden cases. These decisions have wreaked havoc in our towns. Local municipalities are simply not equipped to decide issues affecting our state and national interests in producing clean domestic energy. New York cannot have a ‘not in my backyard approach’ to energy development.”
Attorney Scott Kurkoski, who represents landowner Jennifer Huntington in the Middlefield case, said the “future of New York’s energy policies and the rights of New York landowners now rests in the hands of the justices of New York’s highest court. We are hopeful that the Court of Appeals will protect the rights of landowners and allow New York to realize the environmental and economic benefits of natural gas while allowing our nation to maintain its course towards energy independence.”
The state already has a high-volume fracking moratorium in place that remains under review, with no firm date in sight as to when the moratorium may be permanently enacted or lifted.
Gov. Andrew Cuomo has made few statements about which way he may decide on unconventional drilling. He has claimed that he is awaiting a regulatory blueprint on unconventional drilling from the Department of Environmental Conservation, which needs to wait on a report by Health Commissioner Nirav Shah to include health impacts from drilling in its regulatory proposals. No one has issued any timeframe as to when the health report will be completed, which apparently is holding up the entire process.
More than 50 New York municipalities to date have enacted natural gas drilling bans, and more than 100 have enacted drilling moratoriums, according to the state.
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