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The Associated Press June 27, 2011, 3:48PM ET

Company sues W.Va town over drilling ban

The constitutionality of a West Virginia town's new ban on Marcellus shale gas drilling within a mile of its borders is facing a court challenge.

The ordinance passed last week in Morgantown, W.Va. applies only to deep, horizontal gas wells and a practice known as hydraulic fracturing, or fracking. Traditional vertical drilling into shallower formations would still be allowed, but only with a permit.

Media outlets report that Northeast Natural Energy sued the city last week in Monongalia County Circuit Court, requesting a temporary injunction to prevent the ordinance from going into effect. Chief Judge Russell Clawges denied the temporary restraining order without ruling on the larger arguments.

A court clerk said Monday that no new hearing date has been set.

The Marcellus reserves underlie most of West Virginia. To break gas free from tightly compacted shale more than a mile deep, drilling companies blast huge volumes of water, chemicals and sand into the rock, creating fissures that let the gas escape for collection.

Morgantown Mayor Bill Byrne said the city acted to protect both its water supply and its citizens because state legislators have failed to adopt regulations specific to Marcellus drilling. The city argues state law gives municipalities the right to exercise some authority up to a mile outside of city limits.

But the lawsuit claims Morgantown overreached its authority by trying to control an industry regulated exclusively by the state and is illegally depriving the companies and other private land owners of their property rights.

Joining Northeast in the lawsuit is Enrout Properties LLC, which owns the surface and mineral rights to an industrial park site outside the city where Northeast Natural Energy is sinking wells. Northeast plans to sell the gas it extracts to Dominion Hope Gas, which will then sell it to local residents and businesses.

The site sits along the Monongahela River, and critics worry that a spill at the site could contaminate the city's drinking water supply less than a mile from an intake. The state Department of Environmental Protection briefly shut the site down in May after public outcry, and Northeast then agreed to tighter restrictions that would further minimize the risk of water contamination.

The DEP is reviewing Morgantown's ordinance and re-examining its own regulations to see how the two interact and how that will affect DEP's process in the future, said spokeswoman Kathy Cosco.

Generally, she said, state laws address the environmental concerns such as casing and cementing the well.

"There are other regulations, such as getting approvals from the county to drill in a flood plain that the state doesn't have any authority over," she said Monday. "The courts may decide that the city's action does keep the owners of minerals from being able to get to them, but that doesn't really fall under our jurisdiction."

Northeast also notes that the city of Westover is within a mile of the site, so Morgantown has created further confusion.

Westover is considering an ordinance to regulate drilling within the city and within a mile of its borders, too, and would require companies to prove their operations are safe.

If that ordinance passes, the lawsuit says, the Northeast operation "will, ostensibly, be governed by three separate, inconsistent and irreconcilable regulations."

Blacksville, Granville and Star City also border Morgantown, the lawsuit notes, and drilling operations in those communities could potentially be affected by an ordinance.

"Morgantown neither sought nor received the consent of any of these municipalities," the lawsuit says.

Northeast's drilling operations at the Morgantown site are continuing, but the company is not yet fracking.

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