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May 13, 2013

Appellate Division Upholds Municipal Zoning Law Banning Fracking

On May 2, 2013, the Third Department of the New York State Supreme Court, Appellate Division, upheld a municipal zoning ordinance banning “all activities related to the exploration for, and the production or storage of, natural gas and petroleum,” in the case of Norse Energy Corporation USA v. Town of Dryden.

The Town of Dryden passed the ordinance in 2011 amid concerns about the environmental impact of high volume hydraulic fracturing, or “fracking,” in the Marcellus Shale.  The ordinance was challenged by Anschutz Exploration Corporation, an oil and gas exploration company that owned leases covering approximately 22,200 acres of land in the Town of Dryden.  Anschutz – which later assigned its interest in the leases to Norse, the appellant in the case – argued that Dryden’s ordinance was preempted by a provision of New York’s Oil, Gas, and Solution Mining Law (the “OGSML”), which states that the OGSML supersedes “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries . . . .” New York Environmental Conservation Law 23-0303(2).  Anschutz (and later Norse) argued that this preemption clause prevents municipalities from using their zoning powers to ban fracking within their borders, while Dryden argued that the zoning provision was not the type of regulation targeted for preemption by the OGSML.

Since the OGSML does not define what it means by “regulation of the oil, gas and solution mining industries”, the court in Norse Energy Corporation examined the legislative history of the law in order to determine whether the Town’s zoning ordinance fell within the ambit of the preemption clause.  The court ultimately concluded that the OGSML was aimed at “insur[ing] uniform statewide standards and procedures with respect to the technical operational activities of the oil, gas and mining industries”, and not to regulate where those activities could take place. Hence the OGSML would preempt a local law that attempted to regulate the actual operation of a natural gas well, but, the court held, it did not “usurp the authority traditionally delegated to municipalities to establish permissible and prohibited uses of land within their jurisdictions.”

This decision has important implications for fracking in New York State.  According to Earthjustice, an environmental group involved in the litigation, over 150 municipalities in New York have passed zoning ordinances banning or restricting fracking within their borders; in fact, a similar ordinance passed by the town of Middlefield was upheld by the same court on the same day. Another group, FracTracker, has compiled a table of municipal zoning actions on fracking in New York state, showing 55 bans and 105 moratoria on fracking, as well as several municipalities that have passed resolutions in favor of fracking.  The Norse Energy Corporation decision could encourage other municipalities to pass their own zoning resolutions restricting or banning fracking within their borders.

For more information about hydraulic fracturing and zoning matters, please contact Steve Barshov.



May 6, 2013

EPA Releases Revised Vapor Intrusion Guidance for Public Comment

By: Jonathan Kalmuss-Katz — Filed under: Brownfield Cleanup, CERCLA/Superfund, Emerging Issues, RCRA — Posted at 9:38 am

On April 16, the United States Environmental Protection Agency (“EPA”) took a significant step towards finalizing its long-pending guidance on the evaluation and response to vapor intrusion from contaminated soil and groundwater, releasing an updated draft of the guidance for public comment.  The guidance, which EPA first released in draft form in 2002, is anticipated to have significant impacts for the owners, operators, and potential purchasers of sites contaminated by solvents, petroleum, and other volatile organic compounds (“VOCs”), as well as any parties responsible for such contamination.

What sites are at risk of vapor intrusion?

Vapor intrusion, the migration of hazardous vapor from contaminated soil or groundwater into buildings, is of greatest concern at sites contaminated by VOCs , such as the chlorinated solvents perchloroethylene (“PCE” or “Perc”) and trichloroethylene (“TCE”), as well gasoline constituents.  Vapor can enter a building because of cracks in the foundation, openings around pipes or electrical wires, and heating and ventilation systems that decrease indoor air pressure, creating conditions that draw in vapor.

How have environmental regulators addressed vapor intrusion in the past?

In response to new evidence of human health risks and potential explosion hazards from vapor intrusion, EPA released draft vapor intrusion guidance under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and Resource Recovery and Conservation Act (“RCRA”) in 2002.  At the time, EPA stated that “as the state-of-the-science improves, this guidance will be revised as appropriate.”

Over the following decade, however, the draft guidance was neither finalized nor revised, and individual states began to fill the regulatory gaps left by EPA.  New York’s Department of Environmental Conservation (“DEC”) and Department of Health issued their own vapor intrusion guidance, and DEC began a formal re-evaluation of hundreds of contaminated sites – many of which had already been remediated and delisted – for new vapor risks.  In December 2009, EPA’s Inspector General reported that the absence of final EPA guidance had “[impeded] EPA’s efforts to protect human health at sites where vapor intrusion risks may occur,” and urged EPA to finalize its 2002 draft.

What changes did EPA propose in its revised vapor intrusion guidance?

In response to the Inspector General report, last month EPA released a pre-publication draft of its final vapor intrusion guidance for public review and comment.  The updated document incorporates a number of revisions from the 2002 draft, including:

  • A new, online calculator for determining generic and site-specific screening levels –contaminant concentrations where vapor intrusion is believed to present risk and additional investigation or mitigation is warranted;
  • New recommendations for preemptive mitigation and early action at certain sites before a full vapor intrusion analysis is complete;
  • New guidance on the use of deed restrictions and other institutional controls to restrict land uses or activities that could otherwise result in unacceptable exposure to the vapor intrusion pathway
  • A separate guidance document addressing petroleum vapor intrusion from underground storage tanks, which was not covered in EPA’s 2002 guidance.

Who is likely to be impacted by EPA’s new guidance?

EPA’s guidance is specifically addressed to sites being evaluated pursuant to CERCLA and RCRA, and it is expected to influence the scope of remedial investigations, risk assessments, and remedy selection at such sites.  Moreover, because many CERCLA sites where remediation is complete must undergo five-year reviews for remedial effectiveness, consideration of vapor intrusion could reveal new public health risks and trigger additional mitigation requirements.

The guidance will also have impacts extending beyond CERCLA and RCRA.  Vapor intrusion is an increasingly common topic in environmental due diligence for real estate transactions, and Phase I Environmental Site Investigations often analyze possible vapor intrusion pathways.  EPA’s new screening levels and recommended mitigation measures are likely to inform negotiating positions and risk allocation at sites where vapor intrusion is suspected.  Vapor intrusion could also give rise to toxic tort liability, with plaintiffs relying upon EPA guidance and other regulatory standards to establish a violation of the defendant’s standard of care.  Finally, because vapor intrusion may impose new costs at previously-remediated sites, the guidance could lead more property owners to pursue “reopener” environmental insurance policies covering expenses incurred after a “No Further Action” or “Construction Complete” letter has been issued by state or federal environmental regulators.

How can I submit comments on EPA’s new guidance?

Comments on EPA’s revised vapor intrusion guidance may be submitted online at http://www.regulations.gov/#!docketDetail;D=EPA-HQ-RCRA-2002-0033 through May 24, 2013.

For more information about EPA’s guidance or other issues relating to vapor intrusion, contact Christine Leas or Jonathan Kalmuss-Katz.