BREAKING NEWS: Small town wins big fracking case Home Rule decision allows ban of shale gas exploration

With a landmark decision issued today by the New York State Supreme Court, local governments suddenly gained a significant measure of control over the hydraulic fracturing debate.

While the New York state DEC continues it’s multi-year task to figure out how to permit shale gas wells, the court issued a summary judgment in the matter of Anschutz Exploration Corporation versus Town of Dryden. Dryden won, and one word explains why that ruling is a big headache for the industry and a huge victory for anti-fracking activists. Precedent.

Following the political disposition of the small town in the Finger Lakes Region, Dryden leaders passed an ordinance last August banning the controversial process – fracking -- to extract gas from shale by injecting high volumes of pressurized solution into the ground. The zoning ordinance was swiftly challenged by the oil and gas industry. The industry, specifically the West Law Firm representing Anschutz, argued that the state had the sole authority to regulate the industry as stated in the Oil, Gas and Solution Mining Law. To do this, the state must follow policy outlined in the Generic Environmental Impact Statement, which applies general guidelines to the approval of gas drilling within the state’s border, without taking into account many localized variables and the dispositions and circumstances of individual town governments.

This process is rooted in law last amended in 1981, long before high volume fracking made shale gas development feasible. In 2008, the state began updating its permitting guidelines to account for shale gas by drafting an amendment to the GIES --  a supplemental, or SGEIS. While Pennsylvania pushed ahead with shale gas development, New York stopped permitting until the new guideline could be finalized, a process mired in dissention and yet to be completed. The anti-fracking backlash grew – especially in the Catskills and Finger Lakes regions with a history of land preservation over mineral extraction; and the moratorium gave Dryden – one of the most active anti-fracking towns --  a chance to pass a zoning ordinance that was quickly challenged by Anschutz, which holds leases for mineral rights on more than 22,000 acres in the town.

Supreme Court Justice Phillip R. Rumsey in Tompkins County ruled today that the language of the original state law was too vague to expressly prohibit Dryden from making its own laws to control drilling, a concept known as home rule.  “There remains an absence from the OGSML [Oil, Gas and Solution Mining Law] of clear expression of legislative intent to preempt local zoning control over land use concerning oil and gas production." The ruling also noted that the OGSML was “last amended more than thirty years ago. Long before the potential use of hydrofracking to recover natural gas from the Marcellus Shale in New York could have been anticipated. “

Some of the richest parts of the Marcellus and Utica shales extend from Pennsylvania into southern and central New York, where the gas industry has not been uniformly welcomed by towns as it has in Pennsylvania. Given what’s at stake – the likelyhood that one ban could lead to another, and another -- the industry is likely to appeal the Dryden decision, or possibly pursue other legal options. One of those options is a "takings claim", which seeks compensation for landowners unable to capitalize on their mineral rights due to government restrictions.