Gas-drilling cases heard in highest court

The Enterprise — Marcello Iaia

Thomas West answers reporters’ questions with his back against a column in the Court of Appeals rotunda Tuesday afternoon. West, of The West Firm, represents Mark S. Wallach, a trustee of the now bankrupt Norse Energy Corp., USA, which owned oil and gas leases in Dryden, N.Y. Speaking before the court, West and Scott Kurkoski, of Levene Gouldin & Thompson LLP, said decisions on where natural-gas development could occur by individual towns would create uncertainty that would prevent the larger and more prudent gas companies from investing in the state. 

The Enterprise — Marcello Iaia

John J. Henry of Whiteman Osterman & Hanna LLP confers outside the courtroom of the Court of Appeals on Tuesday just after he argued that state law does not preempt local zoning powers regarding the gas and oil industry. He represented the town of Middlefield, which has prohibited natural-gas development through local law. Henry’s counterpart in a similar case, Deborah Goldberg of Earthjustice, represented the town of Dryden and its town board. 

ALBANY — In a lively session at the Court of Appeals Tuesday, judges honed the arguments determining whether local laws prohibiting gas-extraction are trumped by state law.

Four lawyers — facing off in two separate cases — pitted the statewide importance of efficient, comprehensive energy development against local zoning powers.

“We have to agree that there are important state interests that sometimes the not-in-my-backyard mentality will always (oppose),” attorney Scott Kurkowski told the court. He represents Cooperstown Holstein Corporation — a farm that wants to lease land for oil and gas development.

“All I’m saying to you is, there’s a flip side to that argument, which is, you don’t bulldoze over the voice of the people in individual municipalities who want to be heard about how they live their lives,” Chief Judge Jonathan Lippman said, concluding an hour of oral arguments. “So, I'm not taking either side. What I’m saying to you is, we get it, we get your policy arguments, and we get their policy arguments, too. The question which we have to determine — what did the representatives of the people who ultimately have that power actually do? — and we’ll try and make that decision.”

While the state government has held back for several years on finalizing regulations in order to study the gas-extraction process of high-volume hydraulic fracturing, towns across the state have voted to support or oppose it in some form. According to fracktracker.org, 75 municipalities have banned hydraulic fracturing and 102 have done so temporarily by passing moratoria.

The process forces large volumes of water, along with particles and chemicals, deep and laterally underground to fracture shale and release the gas inside.

Locally, all four Hilltowns have cautiously progressed toward addressing the process, remaining uncertain about what the state will decide. The southwestern corner of Albany County sits over the gas-rich Marcellus Shale formation that has been drilled in nearby Pennsylvania. Prospects for gas development are much greater in the Southern Tier region of New York than in Albany County. Marcellus doesn’t quite reach Guilderland, which has banned the process.

In a unanimous ruling, the state’s middle-level Appellate Court, Third Judicial Department affirmed the Tompkins and Otsego County supreme courts’ decisions to dismiss cases brought against the towns Dryden and Middlefield for prohibiting gas-drilling and related activities in their zoning ordinances.

The judges of the state’s highest court, which deals with new legal territory, are deciding an appeal to reverse the lower-court decisions.

The plaintiff against Dryden was once Norse Energy Corp., USA, which bought oil and gas leases in the town and has since gone bankrupt. Cooperstown Holstein Corporation entered into oil and gas leases and sued the town of Middlefield for its zoning prohibition.

The top court’s decision is expected by the end of June at the earliest but could come later.

The four lawyers arguing on Tuesday presented different readings of the state’s Oil, Gas and Solution Mining Law, which says, “The provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law.”

When asked by Lippman how municipalities can have a say in what happens with hydraulic fracturing, attorney Thomas West said they can regulate their local roads. That would include dictating weight limits, routes, and the schedule of traffic on local roads, West said. He and Kurkoski argued that the legislature allowed municipalities only to regulate roads and real property, leaving all other matters, including zoning, superseded by the state.

Representing the town of Dryden and its town board, Deborah Goldberg argued that the state law regulates the gas and oil industry, its technical operations and activities — not land use. She said the law is silent on zoning.

“We rely on the principle that there has to be a clear expression of intent here,” Goldberg said. “And, when the law is silent, that this court must find that there is an ambiguity at best as to the intent of the legislature and, when there is an ambiguity as to the intent of the legislature, which will find there is no intent to preempt.”

Goldberg cited a distinction between the regulation of business and the regulation of land use. The town’s zoning power is limited to the surface, Goldberg said, and zoning to prohibit horizontal drilling underneath a town that doesn’t want it is superseded by the state.

West acknowledged that, if the court decided not to reverse the decisions, his client would have to petition the legislature for a statute that clearly overrides local zoning laws. He told The Enterprise afterward that, without statewide regulation, larger companies wouldn’t invest in New York. For the municipalities in the gas-rich Southern Tier, he said, smaller companies might have host agreements with those towns.

Proponents of hydraulic fracturing point out that natural gas, a fossil fuel, is a widely available domestic resource and burns more cleanly than petroleum and coal. It is increasingly used for electricity generation. This week, the federal Environmental Protection Agency announced new rules intended to cut carbon-dioxide emissions at coal-burning plants by 30 percent overall by 2030.

“I can tell you that if these decisions are not reversed, and we leave this to our 932 towns to make decisions about the energy policy in New York, we won’t be able to do it,” Kurkoski said of meeting the demands of the new rule.

He argued that individual town decisions conflict with the comprehensive interest the state has in an overriding energy policy.

As to the state law’s policy statement, which describes the need to have a vibrant energy policy for the public interest while avoiding waste, Goldberg pointed to other states that allow local controls, such as Texas and Oklahoma.

“This industry figures out where the lay of the land is and it manages to accommodate itself and do very well,” said Goldberg.

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