August 25, 2014 Articles

New York Municipal Bans on Oil and Gas Drilling: Authorized by Home Rule or Preempted by State Law?

Oil and gas development may be banned by municipalities, but all is not yet lost.

By Cindy M. Monaco – August 25, 2014

In a much-awaited decision, the New York Court of Appeals has determined that the New York Oil, Gas, and Solution Mining Law (OGSML) does not preempt municipal bans on oil and gas drilling.

The emergence of high-volume hydraulic fracturing (fracking) as a technology that can effectively recover previously unrecoverable natural-gas resources sparked a struggle for control between municipalities and mineral-rights owners in the state of New York. Although New York has a long-standing history of oil and gas drilling, including horizontal drilling, the potential use of fracking spawned significant community and political opposition. Many municipalities responded by enacting zoning controls that prohibit all oil and gas drilling and development within their borders. This, in turn, resulted in litigation by landowners and oil and gas lessees, asserting that the law (New York Environmental Conservation Law [ECL], art. 23, tit. 1-13) expressly or impliedly preempts municipal drilling bans. See Anschutz Exploration Corp. v. Town of Dryden, 35 Misc. 3d 450, aff’d sub nom. Norse Energy Corp. USA v. Town of Dryden, 108 A.D.3d 25 (3d Dep’t 2013) (Dryden); Cooperstown Holstein Corp. v. Town of Middlefield, 35 Misc. 3d 767, aff’d, 106 A.D. 3d 1170 (3d Dep’t 2013) (Middlefield). In June 2014, the New York Court of Appeals answered the question in the negative, finding no preemption. See Wallach v. Dryden, 2014 WL 2921399, 2014 N.Y. Slip Op. 04875.

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