Fracking Insider Readers: We are pleased to bring you Volume 20 of our State Regulatory Roundup, including updates in New York, North Dakota and Wyoming. As we explained in earlier volumes, we designed the Roundup to provide quick overviews on state regulatory activity. If you have any questions on any of these summaries, please do not hesitate to ask.
New York – On May 2nd, the Supreme Court, Appellate Division, Third Department handed down twin decisions that upheld two local zoning laws that prohibited activities related to hydraulic fracturing for oil and gas development. The two appeals had challenged the zoning laws as preempted by the Oil, Gas and Solution Mining Law (OGSML) (ECL 23-0301 et seq.), which supersedes all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries. However, the court held that zoning ordinances are not the type of regulatory provision that the Legislature intended to be preempted by the OGSML. On May 31st, attorneys for Norse Energy and an Otsego County farmer filed an appeal of the decision with the Court of Appeals. It is uncertain whether the case will be heard, and because the lower court ruling was unanimous, there is no requirement for the Court of Appeals to do so.
North Dakota – House Bill No. 1134, which was signed into law on April 26th by Gov. Jack Dalrymple, goes into effect on July 1st. The law’s amendments to flaring and oil and gas production tax statutes are intended to reduce natural gas flaring at oil and gas wells. At the end of a one-year flaring grace period, well operators are limited by the statute to three options: 1) capping the well, 2) connecting the well to a gas gathering line, or 3) equipping the well site with an electric generator that consumes 75% of the gas from the well. All three options are subject to an “economic infeasibility” exception. The law also creates an oil and gas production tax exemption for a period of two years and thirty days for all gas that is: 1) collected and used by an electric generator that consumes at least 75% of the gas produced at the well site, 2) collected by a collection system at the well site, or 3) collected by other value-added processes.
Wyoming – Senate File 118, which was approved during the past legislative session, goes into effect on July 1st. Landowner advocates and the oil and gas industry remain at odds over the law, which adds protections for landowners in eminent domain cases. The law allows a judge to dismiss a condemnation case without prejudice if developers or government entities fail to show why their eminent domain request was justified, and requires them to pay landowners’ legal fees if a judge determines they did not offer fair value for the property.