Attorney Daniel F. Leary
Cuddy & Feder LLP, Attorneys at Law

On November 29th, I attended the evening session of the DEC public hearing on the Revised Draft SGEIS for Hydraulic Fracturing/Marcellus Shale, held in Loch Sheldrake, NY. Among those speaking from the public that night was the Supervisor-Elect of the nearby Town of Tusten, who announced that on the previous evening, Tusten had adopted a local zoning law effectuating a wholesale ban on all natural gas exploration, extraction and production activities throughout the entire town. This announcement received a warm reception from those in the audience who oppose the efforts of the natural gas industry in New York State. If “zoning by applause” carried the day, one observing might even think that Tusten was on solid legal footing with its explicit, town-wide prohibition against all natural gas extraction/production activity, but my subsequent research casts doubt upon the Town’s action. First and foremost, I confirmed that DEC regulates and administers the development, production and utilization of oil and gas resources through Article 23 of the Environmental Conservation Law (“ECL”), with Section 23-0303(2) expressly stating:

“The provisions of this article 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” (emphasis added). Other than the express exclusions for roads and real property taxation, this section clearly and unambiguously states that all other local laws or ordinances regulating the gas industry are preempted by Article 23.

The only published case that deals directly with Section 23-0303(2), Envirogas, Inc. v. Town of Kiantone, 112 Misc.2d 432, 447 N.Y.S.2d 221, affirmed 89 A.D.2d 1056, 454 N.Y.S.2d 694, appeal denied 58 N.Y.S.2d 602, 458 N.Y.S.2d 1026, 44 N.E.2d 1013 (1982), nullified a section of the underlying zoning ordinance that imposed a compliance bond and a permit fee on oil and gas wells, finding that it “preempts not only inconsistent local legislation, but also any municipal law which purports to regulate gas and well drilling operations…” (unless the law relates to local roads or real property taxes).

It is hard to comprehend how an explicit and all encompassing local prohibition against natural gas extraction/production activity, such as the one recently enacted by Tusten, is not preempted by ECL Article 23. Interestingly, the Town of Tusten itself previously acknowledged that “Section 23-0303 preempts towns from regulating land use of gas and oil mining in NYS, except over local roads or the rights of local government under the real property tax law” (emphasis added), when it adopted Resolution 91-08 on July 14, 2008.  Resolution 91-08, with its attendant acknowledgment of DEC preemption, was specifically relied upon in the Town of Tusten’s comment letter of December 29, 2009 to the DEC on the prior dSGEIS.   Interestingly, Resolution 91-08 authorized a road assessment study and I could find nothing to explain or justify Tusten’s reversal of its prior position on DEC preemption.

Notwithstanding all the above, advocates of local bans on gas drilling are now relying upon a 25 year old case that involved the New York State Mined Land Reclamation Law (ECL §23-2701, et seq.). In Frew Run Gravel Products, Inc. v. Town of Carroll, 71 N.Y.2d 126, 518 N.E.2d 920, 524 N.Y.S.2d 25 (1987), the Court of Appeals interpreted the supersession provision governing mining activity, ECL §23-2703 (2), to allow for limited local zoning authority, but the supersession provision in effect at that time contained an express exception allowing for local legislation prescribing stricter standards for mined land reclamation activity, whereas the supersession provision governing oil and gas activity, ECL §23-0303 (2), provides no exceptions for any local legislation, other than the above-noted exceptions for roads and real property taxes.  This exception for mined land reclamation activity is specifically cited and discussed in Frew Run.  It should also be noted that ECL Article 23 contains specific provisions governing the siting and location of gas wells and facilities, while the regulatory scheme for the extractive mining industry set forth under the New York State Mined Land Reclamation Law in Title 27 does not.

The other case heavily relied upon by opponents of DEC pre-emption authority, Gernatt Asphalt Products, Inc., v. Town of Sardina, 87 N.Y.2d 668, 664 N.E.2d 1226, 642 N.Y.S.2d 164 (1996), also involved an interpretation of the supersession the provision of the Mined Land Reclamation Law, ECL §23-2703, but that was after a 1991 amendment in subsection [2] [b], which now provides: “For the purposes stated herein, this title shall supersede all other state and local laws relating to the extractive mining industry; provided, however, that nothing in this title shall be construed to prevent any local government from … enacting or enforcing local zoning ordinances or laws which determine permissible uses in zoning districts”.

Importantly, the New York State Legislature did not enact a similar express carve-out for local zoning authority in ECL §23-0303 (2) in 1991 or any time thereafter, and regulation and siting of gas wells has been exclusively by the DEC over the many years since then without any successful challenge to the DEC’s preemption authority.

In conclusion, I believe the DEC correctly relies upon current law in its responses  under  Sections 7.12 and 8.1.1.5 of the Revised Draft SGEIS, which states that the “Department’s exclusive authority to issue well permits supersedes local government authority relative to well siting.” Comments that suggest the DEC should now change its position due to pending lawsuits in  Dryden and  Middlefield and/or NYS pending legislation are presently speculative, and should not be accepted in the final SGEIS absent a change in circumstances. [See, eg, Matter of WEOK Broadcasting Corp. v. Planning Board of Town of Lloyd, 79 N.Y.2d 373, 384-85, 592 N.E.2d 778, 583 N.Y.S.2d 170 (1992)].

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Dan is a Partner in the law firm of Cuddy & Feder LLP, and co-manages the firm’s Hudson Valley office.  He practices in the firm’s Land Use and Telecommunications practice groups, and has over 20 years experience in the areas of land use, zoning, municipal, and related environmental law.  He was assisted by John Furst, a senior associate in the firm’s Land Use and Telecommunications groups.  For more information contact: