New York Court of Appeals Upholds Municipal Authority to Ban Fracking

New York’s highest court dealt a blow to the hydrofracking industry on June 30 when it upheld, in a consolidated opinion in Matter of Wallach v. Town of Dryden and Cooperstown Holstein Corp. v. Town of Middlefield, the authority of municipalities to use their zoning powers to ban hydrofracking. The Court of Appeals held that provisions on the towns’ zoning ordinances that prohibited hydrofracking anywhere within their borders were not preempted by the “supersession clause” of the state’s Oil, Gas and Solution Mining Law (OGSML). That clause, said the Court, prevents municipalities from regulating the “how” of hydrofracking but does not bar them from limiting “where” it can take place.

Hydrofracking — or, more properly, hydraulic fracturing — uses pressurized fluids injected into wells to fracture underground rock formations and liberate natural gas trapped within the rock. The Marcellus Shale formation, which extends over a number of states including New York, contains significant amounts of gas, and therefore has attracted intense interest from energy companies. At the same time, concerns have been raised about hydrofracking’s environmental impacts, especially those related to chemicals in the pressurized fluids. Those types of concerns led the Town of Dryden, a rural community in Tompkins County, and the Town of Middlefield, which includes part of the Village of Cooperstown in Otsego County, to amend their zoning plans to ban hydrofracking. (Both towns argued that their zoning plans already banned hydrofracking because they did not list it as a permitted use.) The appellants, companies with interests in leases that would have permitted exploring and developing natural gas through hydrofracking, challenged the ordinances, arguing that they were preempted by the OGSML’s supersession clause. They failed in the trial court and the intermediate appellate court, and then presented their arguments to the Court of Appeals.

The Court of Appeals also rejected their arguments, finding that the supersession clause, which provides that the OGSML “shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,” did not preempt the town’s ordinances. Citing New York’s strong “home rule” tradition, based upon an explicit provision in the state’s Constitution and several implementing statutes, the Court noted that zoning ordinances will be held to have been preempted only where there is a “clear expression of legislative intent to preempt local control over land use.” Neither the plain language of the OGSML’s supersession, nor the overall statutory scheme, nor the legislative history of the provision pointed to any such legislative intent. Instead, said the Court, the supersession clause was intended to protect the ability of the state’s Department of Environmental Conservation (DEC) to establish uniform regulations for exploration and extraction activities without interference from conflicting or inconsistent local ordinances. A ban on hydrofracking, even one covering the entire municipality, causes no such interference, the Court found. Thus –and perhaps somewhat paradoxically — a municipality cannot seek to make hydrofracking safer by imposing its own regulations, but it can ban the practice completely.

Because of a statewide moratorium on large-scale hydrofracking activities, the decision in the Dryden and Middlefield cases will have little immediate impact. But once the moratorium is lifted — and assuming the Legislature and DEC decide that the practice may proceed — the decision may become a significant barrier to hydrofracking throughout the state.

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