On February 21, in Anschutz Exploration Corporation v. Town of Dryden, a state trial court judge upheld a provision of the Town of Dryden Zoning Law that prohibits all petroleum and natural gas exploration, production and storage in that town. Dryden sits atop the Marcellus Shale formation and is one of several New York municipalities that have adopted local laws intended to prohibit or limit high volume horizontal hydraulic fracturing, more commonly known as “fracking.”
The plaintiff oil and gas company unsuccessfully argued that the challenged provision of the Town’s Zoning Law was contrary to the New York Oil, Gas, and Solution Mining Law (“OGSML”). That law supercedes “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.” (Environmental Conservation Law (“ECL”) § 23-0303(2).)
The trial court found the operative language did not clearly foreclose local land use authority, and was almost identical to language in the State’s Mined Land Reclamation Law (“MLRL”), ECL § 23-2703(2), which the Court of Appeals has held does not supercede local zoning authority. In the absence of a clear statement from the Legislature that it intended to displace local zoning authority, Justice Rumsey determined that the Court of Appeals decision, Frew Run Gravel Products v. Town of Carroll, 71 N.Y.2d 126 (1987), controlled. In Frew Run, the Court of Appeals held that local zoning laws were not laws relating to the extractive mining industry, but were laws regulating the appropriate use of land which had an incidental effect on extractive mining. The trial judge concluded that Dryden’s zoning law prohibiting all oil and gas exploration, production, and storage in the Town was not a local law relating to regulation of the oil, gas and solution mining industries and, therefore, was not preempted. This decision is highly likely to be appealed.
Although not addressed specifically in the decision, it would appear to leave open the option of allowing fracking in some zoning districts and prohibiting it in others. Also left open is whether a zoning law could allow fracking subject to the grant of a special permit. Finally, it remains to be seen how this decision will affect the draft rules regulating fracking which have been proposed by the New York State Department of Environmental Conservation.
On February 4, 2012, the Supreme Court, Otsego County similarly upheld a local zoning ordinance banning fracking. The court’s decision in Cooperstown Holstein Corporation v. Town of Middlefield rested on the same reasoning as the Dryden decision.