Last week, the New York Court of Appeals held that a town may ban oil and gas exploration and production activities, including hydraulic fracking, within its municipal boundaries through the adoption of local zoning laws. The Court held that the supersession clause in New York’s Oil, Gas and Solution Mining Law, set forth in section 23-0303(2) of the Environmental Conservation Law, does not pre-empt the “home rule authority” that is vested in municipalities to regulate land use.
In Matter of Wallach v. Town of Dryden (Case No. 130) and Cooperstown Holstein Corporation v. Town of Middlefield (Case No. 131), decided June 30, 2014, the Court upheld zoning laws of the towns of Dryden and Middlefield that entirely banned gas exploration and extraction activities within their jurisdictions. The plaintiffs, a private gas company in the Town of Dryden case and a private property owner in the Town of Middlefield case, claimed that the supersession clause in the Oil, Gas and Solution Mining Law (“OGSML”), which provides that the OGSML “shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,” demonstrated that the legislature intended to preempt local zoning laws that impact energy production. The towns however, argued that they acted within their home rule authority in adopting the challenged local laws and that the OGSML did not extinguish their zoning powers. The State Municipal Home Rule Law empowers local governments to pass laws both for the “protection and enhancement of [their] physical and visual environment” and for the “government, protection, order, safety, health and well-being of persons or property therein.” Further, the state’s Town Law grants towns the power to enact zoning laws for the purposes of fostering the “health, safety, morals or general welfare of the community.”
The Court reviewed the plain language of the OGSML, the statutory scheme, and its legislative history, and concluded that the legislature did not expressly or by implication preempt the power of localities to regulate land use. The Court held that the OGSML was most naturally read as preempting only local laws that purport to regulate the actual operations of oil and gas activities--not zoning ordinances that restrict or prohibit certain land uses within town boundaries. The Court also held that the zoning laws in these cases were directed at regulating land use generally, and not the operation of the oil and gas industry. The Court also found nothing in the statutory scheme of the OGSML indicating that “the supersession clause was meant to be broader than required to preempt conflicting local laws directed at the technical operations of the [oil and gas] industry.” Lastly, the Court found nothing in the legislative history of the statutes to undermine its opinion that the OGSML’s supersession clause does not interfere with local laws regulating the permissible and prohibited uses of municipal land.
As a result of these decisions, other municipalities looking to limit hydraulic fracking or oil and gas exploration within their municipal borders may seek to prohibit such activities through local land use regulation.