State appellate court upholds 'home rule' over OGSML laws

May 2, 2013

In two separate rulings Thursday, the state's Appellate Division, Third Department has ruled that the state's Oil, Gas and Solution Mining Law (OGSML) does not preempt municipal land use laws.

The decision on so-called 'home rule', was being closely monitored because of the implications for future resource development, which could include hydraulic fracturing or fracking. 

In the first case, NORSE ENERGY U.S.A. vs TOWN OF DRYDEN et al., Anschutz Exploration Corporation and subsequently Norse Energy sought a court ruling to support its argument that the state’s OGSML should override local laws.

The Oil, Gas and Solution Mining Law is contained in the state's Environmental Conservation Law, overseen by the NYSDEC.

In August 2011 the Town of Dryden had amended a local zoning ordinance to ban all activity related to exploiting oil and gas resources, driven by local concerns over the potential fracking operations. Oil and gas leases owned by Anschutz, (and later Norse Energy) covered some 22,000 acres in the town.

On Thursday, the Appellate panel of four judges ruled in favor of the Town of Dryden, and its co-respondents the Dryden Resources Awareness Coalition, made up of over 70 residents and landowners.

There is nothing in the statute or its legislative history suggesting, as petitioner does, that it is the policy of this state to "maximize recovery" of oil and gas resources at the expense of municipal land use decision making.

The ruling continues,

Thus, we hold that the OGSML does not preempt, either expressly or impliedly, a municipality's power to enact a local zoning ordinance banning all activities related to the exploration for, and the production or storage of, natural gas and petroleum within its borders.

In the second decision, COOPERSTOWN HOLSTEIN CORPORATION vs TOWN OF MIDDLEFIELD, the panel ruled along similar lines, regarding a zoning change made in the town in June 2011.

For the reasons set forth in Matter of Norse Energy Corp. USA v Town of Dryden (supra), we find plaintiff's claim to be without merit and affirm Supreme Court's judgment declaring that defendant's zoning law is valid.

Here's additional background on the story from the Innovation Trail's Matt Richmond, who will file on this development later on Thursday with reactions from the legal teams.

Because of the unanimous decisions, the State Supreme Court would have to grant 'leave' for the decisions to be appealed. 

A week ago Gas and Oil producer Lenape Resources filed a note of appeal as part of an attempt to overturn a court decision made in March that allowed the town of Avon to maintain its moratorium on fracking. Innovation Trail has requests for comment in with relevant parties to see whether Thursday's decision will have any bearing in this case.