Gas company sues local town for fracking ban

Author: Phillip YuenPipe Dream News
Published: September 23, 2011

Denver-based gas company Anschutz Exploration Corporation filed a lawsuit Friday, Sept. 16 against the Town of Dryden, a municipality about 40 miles from Binghamton in Tompkins County, in an effort to strike down the town’s zoning ordinances and regulations that prohibit oil and gas drilling. The lawsuit is the first in New York to challenge a town’s ability to ban hydraulic fracturing, or “fracking,” a method of drilling for natural gas, and it could potentially have a significant impact on the legality of similar fracking bans enacted in 15 other New York municipalities.

Fracking releases natural gas from subsurface rock formations by drilling into the ground and pumping millions of gallons of water laced with chemicals down to fracture the bedrock, allowing the gas to bubble up to the surface. The Southern Tier sits on top of the Marcellus Shale, a formation of rock stretching beneath several states that contains one of the country’s largest deposits of natural gas.

Ian Tarbania/Contributing Photographer

A pro-fracking banner posted in front of a red shed on Bunn Hill Road. Anschutz Exploration will be the first corporation to take legal action against a municipality for establishing anti-fracking city codes.

Whether the government should allow fracking to take place has become a contentious political issue since large amounts of natural gas were found in the Marcellus Shale. Those opposed to the practice say the chemicals and other contaminants involved in the drilling can seep into and contaminate drinking water supplies.

The New York State Department of Enivronmental Conservation ruled this year that fracking can be permitted to take place in several New York counties, including Broome, Cattaraugus, Chemung, Chenango, Delaware and Tioga Counties. Fracking is still not legally allowed in New York at present, however, while the DEC completes a review process of its findings.

The New York State Department of Enivronmental Conservation ruled this year that fracking can be permitted to take place in several New York counties, including Broome, Cattaraugus, Chemung, Chenango, Delaware and Tioga Counties. Fracking is still not legally allowed in New York at present, however, while the DEC completes a review process of its findings.

Anschutz’s lawsuit argues that local governments in New York like the Town of Dryden overstep their powers if they attempt to regulate oil and gas industries, because the state’s Environmental Conservation Law specifies that only the state government may do so.
Thomas West, the Albany-based attorney who represents Anschutz, said the company’s lawsuit “is based upon the fact that the Environmental Conservation Law contains a very broad express preemption provision that … prohibits towns from enacting any local laws or ordinances that relate to oil and gas drilling, period.”

“The only two exceptions are the regulation of local roads and taxation,” West said. “What the Town has done goes well beyond that.”


“If I thought this would destroy my water or my property, I would not be interested in it,” she said.

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The West Firm of Albany, New York, on behalf of the Colorado-based oil and natural gas company, Anschutz Exploration Corporation (Anschutz), filed today a lawsuit in New York Supreme Court, Tompkins County, seeking to overturn an ordinance and zoning amendment adopted by the Town of Dryden (Town), which bans all oil and gas exploration and development activities in the Town. The basis for Anschutz’s lawsuit is that the zoning ban is preempted by New York’s Oil, Gas and Solution Mining Law, Article 23 of the New York State Environmental Conservation Law (ECL).
ECL §23-0303(2) expressly supersedes all local regulations relating to oil and gas exploration and development, with the exception of local roads and real property taxes. Specifically, the ECL provides that:

The provisions of this article [ECL Article 23] 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.

The litigation papers filed on behalf of Anschutz demonstrate that this clear and unequivocal preemption language was intended to and does preempt all municipal regulation of oil and gas extraction and development, including local zoning, with narrow exceptions concerning roads and taxation. The papers further demonstrate that any effort by the Town to regulate or prohibit oil and gas exploration and development would conflict with the extensive statutory scheme administered by the New York State Department of Environmental Conservation (DEC) relative to oil and gas development and the stated purposes of New York law to promote the development of these resources and protect the correlative rights of owners, including landowners. The litigation papers also include an affidavit from Greg Sovas, the former Division Director of the Division of Mineral Resources at DEC, concerning DEC’s long-standing interpretation that the supersedure provision at issue in this litigation was intended to preempt all local regulation of the oil and gas industry, including local zoning, with the exception of the regulation of local roads and taxation.
Although Anschutz does not dispute the role of local governments, including the Town regarding traditional zoning, Anschutz has commenced this litigation to protect its substantial lease holdings in the Town. Anschutz and The West Firm look forward to having the Supreme Court resolve this dispute to provide Anschutz and the Town with guidance concerning the Town’s role relative to the extensive leases held by Anschutz within the Town.