Feb. 22 (Bloomberg) -- A central New York town can block natural-gas drilling after a state judge, in the first test of local laws, upheld the Town of Dryden’s ban on hydraulic fracturing.
State Supreme Court Judge Phillip Rumsey in a ruling released yesterday said the town’s zoning amendment on gas drilling wasn’t pre-empted by state law. Denver-based Anschutz Exploration Corp. sued in September, seeking to overturn the ordinance, which bans gas and oil exploration in the town about 200 miles (322 kilometers) northwest of Manhattan.
New York placed a moratorium on the drilling process known as hydraulic fracturing in 2010 while state regulators developed environmental rules. Since then, about 20 towns in the state have adopted laws to ban drilling, Karen Edelstein, a geographic information-systems consultant in Ithaca, said.
“I think you’d call this a pretty substantial victory,” Mahlon Perkins, attorney for Dryden, said yesterday in an interview. “The pertinent part of it is, he declared that the zoning amendment as slightly modified is not pre-empted by state law.”
Tom West, an Albany attorney representing Anschutz, said the ruling was disappointing. Anschutz has 30 days to decide whether to appeal in state court, he said.
“These pure questions of law have a tendency to get reviewed, and different judges can see it differently,” West said in an interview. “We still feel very confident in our position that the oil and gas law does pre-empt municipalities from these types of regulation.”
Jim Monaghan, a spokesman for Anschutz, didn’t return a phone call seeking comment.
New York sits on the northern edge of the Marcellus Shale formation, which may hold enough natural gas to supply the U.S. for about seven years, according to the U.S. Energy Department. U.S. states from Wyoming to West Virginia with shale are encouraging so-called fracking even as the U.S. Environmental Protection Agency studies the effects on drinking water and may adopt nationwide regulations.
In Ohio, earthquakes that rattled the Youngstown area last year are under review by state officials for possible links to fracking, which forces millions of gallons of chemically treated water and sand underground to free gas trapped in rock.
New York, the nation’s third most-populous state, may become the only state that lets municipalities ban fracking, West said. Anschutz challenged the ban in Dryden, while Cooperstown Holstein Corp., a dairy farm, in September sued to overturn a similar restriction in Middlefield.
In West Virginia, the Circuit Court of Monongalia County in August overturned a Morgantown ordinance that prohibited fracking. In her decision, county Judge Susan B. Tucker said the state has “exclusive control” over oil and gas development.
New York and most other states regulate oil and gas development, according to Eric Waeckerlin, an environment and energy attorney with Kelley Drye & Warren LLP in Washington. The state also recognizes municipal home rule, which lets towns adopt laws to protect their “physical and visual environment” and the “safety, health, and well-being” of residents.
Most local bans would exclude heavy industry such as gas drilling through local zoning laws, Waeckerlin said.
In Pennsylvania, Ohio and West Virginia, drillers dipping into Marcellus Shale contributed to a boost in fracking that helped increase U.S. natural-gas supplies and cut prices 32 percent last year. A public comment period on draft regulations New York ended Jan. 11 with the state receiving an unprecedented “tens of thousands” of responses, Joe Martens, commissioner of the Department of Environmental Conservation, said in a statement.
Governor Andrew Cuomo, a Democrat, said Jan. 4 he would wait for state regulators to finish the guidelines before making a decision on how to proceed.
--With assistance from Steve Geimann in Washington. Editors: Steve Geimann, Andrew Dunn
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