Fracking Zoning Case Seeks Review By New York's Highest Court

by McCarter & English: Climate Change & Renewable Energy
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Columbia Law School convened a panel on hydraulic fracturing ("fracking") yesterday. One of the subtopics was its effect on climate change mitigation.

Professor Michael Gerrard laid out the pluses and minuses. On the plus side:  burning natural gas yields about one-half the amount of carbon dioxide as burning coal for the same amount of energy. This has been demonstrated by the 9% drop in United States CO2 emissions in the 5 years from 2007 to 2011.  Confirming Professor Gerard's statistics is a recent report by the Center for Climate Energy Solutions, Leveraging Natural Gas to Reduce Greenhouse Gas Emissions. On the minus side:  natural gas is composed in substantial part of methane, a much more potent greenhouse gas than carbon dioxide, and methane leakage occurs in the production, processing and distribution of natural gas; the low price of natural gas depresses the market for nuclear, solar, wind and other greenhouse-gas-free energy sources; and natural gas greenhouse gas emissions, while better than coal, are still greenhouse gas emissions. 

Theoretically, one could assess scientifically this fracking algebra. But, as might be imagined, the future of fracking is not likely to be determined based on a balancing of pluses and minuses. Politics will be central and for the moment those politics are distinctly local.  Fracking's future in many places hinges on the ability of local zoning authorities to zone fracking out of the local community.  On Tuesday, the New York Court of Appeals was asked to join this fray, when fracking supporters filed a petition for review.  In the case, In re Norse Energy, a panel of the Appellate Division considered a local zoning ordinance that banned "all activities related to the exploration for, and the production or storage of, natural gas and petroleum." Petitioner Norse Energy argued the ordinance was preempted by the express terms of ECL 23-0303 of New York's Oil, Gas and Solution Mining Law, which provides that "[t]he 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."  The panel concluded that this language was meant to address the details of mining, but did not reach the traditional power of a community over land use.  Accordingly, there was no express preemption.  The court further found that there was no implied preemption either.

In our view, reasonable minds could differ.  But also in our view, the Appellate Division decision does not matter yet; it would have been appealed by whichever side lost. 

The Court of Appeals, if it takes the case, will have to engage in statutory construction.  We cannot read the tea leaves there.  We hope, however, that the Court keeps the future in mind.   More than 170 municipalities in New York have enacted some sort of limitation on fracking within their borders.  The Oil, Gas and Solution Mining Law forbids activities that lead to "waste," defined to include:   "The locating, spacing, drilling, equipping, operating, or producing  of  any  oil  or  gas well or wells in a manner which causes or tends to  cause reduction in the quantity of oil  or  gas  ultimately  recoverable from  a  pool  under  prudent  and proper operations, or which causes or  tends to cause unnecessary or excessive surface loss or  destruction  of oil or gas."   A patchwork of municipalities with zoning ordinances barring fracking, will be physically juxtaposed with a patchwork of municipalities permitting fracking.  After some time, proponents undoubtedly will have the technical data to support the conclusion that "waste" is occurring and with those facts will return to seek enforcement of a statute forbidding regulation of the "locating ... of any oil or gas well" that causes "reduction in the quantity of oil or gas ultimately recoverable."  The Court should consider how its decision now will affect that future situation  (unless, of course, New York's legislature acts first).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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