FrackingInsider has provided a few updates on the status of two municipal bans on hydraulic fracturing in the towns of Dryden and Middlefield in New York State (see our previous coverage here,here, and here). Last month, the New York State Court of Appeals sided with the towns and upheld the local bans on oil and gas development. The specific issue at hand in the case was whether towns have the right to limit oil and gas drilling using their local zoning laws, or whether the state Oil, Gas, and Solution Mining law pre-empts municipalities’ authority to ban development within municipal boundaries. Notwithstanding that the court’s 5-to-2 decision was based on an application of New York law, it was closely watched by stakeholders across the country embroiled in similar preemption debates. Interestingly, a few weeks later, a Colorado court struck down a local ban that was passed in the town of Longmont.
The Dryden and Middlefield bans that were the subject of the Appeals Court decision were part of a surge of proposed laws and resolutions among municipalities in a number of states to limit or outright ban hydraulic fracturing and the disposal of waste from the process. Such actions have faced stiff resistance from the oil and gas industry, royalty owners, and often states, which argue that giving control of energy permitting introduces significant regulatory uncertainty that can make it hard to justify investing potentially hundreds of millions of dollars into assets that could be stranded by arbitrary local actions. State governments and their environmental regulators also have significant expertise on energy issues, compared to their municipal counterparts. Finally, a local approach to energy regulation introduces the possibility of hundreds of individual regulatory structures creating a patchwork that industry must navigate, often to access the resources of a single formation.