Appellate Division Upholds Right of New York Municipalities to Regulate Fracking through Zoning Ordinances

Posted By on May 16, 2013

Municipalities in New York have received the green light to regulate fracking – even to the point of banning it – through local zoning ordinances.  It’s a second consecutive victory for municipalities in the New York courts, and an affirmation of New York’s long history of vesting decision making powers in local governments through Home Rule.

On May 2nd, 2013, the Appellate Division for the New York State Supreme Court Third Judicial Department handed down its ruling in the closely watched case of Norse Energy Corporation v. Town of Dryden et al. As we had previously reported here at the Periconi, LLC Environmental Law Blog, Anshultz Exploration Corp., the predecessor-in-interest to Norse Energy, had appealed a 2012 ruling of the New York State Supreme Court upholding a Dryden, New York zoning ordinance which limited the areas in the town where fracking was permitted (as well as a similar zoning ordinance in Middlefield, New York, which was consolidated with the Dryden case).

Anshultz had argued that the ordinance sought to regulate fracking, and therefore was preempted by New York State’s Oil, Gas and Solution Mining Law (OGSML), which reserves regulatory authority over oil and gas extraction for the New York State Department of Environmental Conservation. After losing its challenge at the trial level, it appealed the decision to the Appellate Division. The appeal was later taken over by Anshultz’s successor, Norse Energy.

Writing for a unanimous court, Justice Peters affirmed the trial court’s decision, holding that “the OGSML does not preempt, either expressly or impliedly, a municipality’s power to enact a local zoning ordinance banning all activities related to the exploration for, and the production or storage of, natural gas and petroleum within its borders.”

The court’s analysis followed the same “how” versus “where” distinction adopted by the trial court. Whereas the OGSML regulated how oil gas extraction may take place – the technical details governing how wells are drilled and gas extracted – a municipality’s zoning ordinance only regulates where that activity takes place, and general land use regulation is not preempted by the OGSML.

The court recognized that “the Town’s exercise of its right to regulate land use through zoning will inevitably have an incidental effect upon the oil, gas and solution mining industries,” but concluded “that zoning ordinances are not the type of regulatory provision that the Legislature intended to be preempted by the OGSML.” In fact, the OGSML specifically reserves municipal authority over local roads and taxes, a clear indication to the court that the Legislature meant to ensure that municipal jurisdiction over certain areas remained.

While the Norse decision is certainly a victory for proponents of home rule in New York State, Norse Energy has hinted that an appeal to New York’s highest court, the Court of Appeals, is likely. Stay tuned to the Periconi, LLC Environmental Law Blog for further updates.

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