Towns can ban fracking, New York’s top court rules

 Local governments in New York can use their zoning ordinances to ban drilling for oil and gas, including fracking, the state’s highest court has ruled.

By a 5-2 vote, the New York Court of Appeals rejected energy industry arguments that only the state Department of Environmental Conservation (DEC) has legislative authority to regulate fracking.

The decision focused on industry challenges to zoning ordinances in two Finger Lakes rural towns — Dryden in Tompkins County and Middlefield in Otsego County. Both are in the Marcellus Shale region.

Middlefield includes the village of Cooperstown, best known as the home of the Baseball Hall of Fame.

The issue, Judge Victoria Graffeo emphasized in the majority opinion, was “not whether hydrofracking is beneficial or detrimental to the economy, environment or energy needs of New York,” saying that the court wasn’t judging the merits of the practice.

She noted that New York is engaged in an ongoing debate about possible safety and environmental risks associated with shale gas production and has a statewide moratorium on “high-volume” fracking pending a further environmental study.

The legal issue at stake, she said, is “the relationship between the state and its local

government subdivisions.”

Currently, 170 local governments ban or have a moratorium on oil and gas drilling, according to Deborah Goldberg, an Earthjustice lawyer who represented Dryden in the appeal. “This covers all of them.”

And on the other side, more than 40 towns passed resolutions supporting shale gas development, according to the Business Council of New York, which submitted a friend-of-the-court brief on behalf of the energy companies.

At least three other oil- and gas-producing states, including Illinois, allow their local governments to ban drilling within their borders, according to the towns.

The case drew friend-of-the-court briefs from advocacy and industry groups on both sides of the issue, including the Farm Bureau, American Petroleum Institute, American Planning Association, Community Environmental Defense Council and Independent Oil and Gas Association of New York.

 Background as explained by the court

In 2006, drilling companies began to acquire oil and gas leases in Dryden. Two of those leases were assigned to Norse Energy Corp. In 2011, the town board conducted a public hearing, reviewed scientific research and amended its zoning ordinance to ban “all oil and gas exploration, extraction and storage activities.”

In 2007, Cooperstown Holstein Corp. obtained two leases from a dairy farmer to explore fracking development in Middlefield. In 2011, the town board amended its master plan to classify a variety of “heavy industrial uses, including oil, gas and solutions mining and drilling.”

Middlefield’s town board said at the time that the Cooperstown area “is known worldwide for its clean air, clean water, farms, hills, trout streams, scenic viewsheds, historic sites, quaint village, rural lifestyle, recreational activities, sense of history and history of landscape conservation,” adding that fracking would “eliminate many of these features” and “irreversibly overwhelm the rural character of the town.”

The towns argued that limiting their zoning authority would “exalt oil and gas development above all other land uses.”

The energy companies sued, contending that the ordinances conflict with state energy policy and New York’s Oil, Gas and Solution Mining Law as amended after the national energy crisis of the 1970s “to further enable the efficient and safe development of oil and gas.” More specifically, they argued that the legislature intended to preempt or preclude local ordinances that restrict or ban gas and oil operations.

In addition, as Cooperstown Holstein argued in its brief, allowing such ordinances “would obliterate the rights of mineral owners throughout this state and in effect ban an entire industry from New York.” Oil and gas extraction is a half- billion-dollar-a-year industry in the state, it said.

The Cuomo administration took no position in the case.

Lower courts sided with the towns, as did the Court of Appeals majority.

It said regulation of land use through zoning ordinances is “one of the core powers of local governance,” and the state oil and gas law doesn’t “clearly preempt” local governments from using their zoning powers.

In addition, the zoning ordinances don’t intrude on DEC’s regulatory oversight of “safety, technical and operational aspects of oil and gas activities across the state,” the court said.

“Dryden and Middlefield engaged in a reasonable exercise of their zoning authority. The towns both studied the issue and acted within their home rule powers in determining that gas drilling would permanently alter and adversely affect the deliberately cultivated small-town character of their communities,” Graffeo wrote in the decision.

She noted that the legislature has the right — “if it chooses to exercise it” — to preclude such ordinances. Earthjustice’s Goldberg called such legislation “highly unlikely.”

In a dissent by Judge Eugene Pigott Jr., two members of the court said the challenged ordinances “do more than just regulate land use” but also regulate the gas and oil industries “under the pretext of zoning.”

The authority to regulate those industries belongs exclusively to DEC, Pigott wrote, and under the two ordinances, “prohibition of certain activities is, in effect, regulation.”