New York fracking regulations

New York regulationsWhile less prominent than states like Texas, Alaska, or Oklahoma, New York has had a longstanding and cooperative history with the oil and gas industry.  In fact, the first fossil fuel discovery in the United States was made in Cuba, NY at the Seneca Oil Spring in the 17th century1.  However, with the onset of the shale gas rush, this relationship has begun to falter.  As fracking in New York has become a very real prospect, the state is struggling to construct effective New York regulations for hydraulic fracturing.

A brief history of New York regulations

The first natural gas well in the United States was actually drilled in Fredonia, New York in 18211.  Drilling in New York has been expanding ever since, triggering the introduction of state regulations in the last century.

In 1963, the state established clear regulation of the oil and gas industry in the Oil, Gas, and Solution Mining Act (Article 23 of the Environmental Conservation Law).  While this Act specifically addresses well spacing and permitting, leases for drilling on state lands, underground storage of gas, transport of gas, and fuel refining, it makes no mention of hydraulic fracturing8.

The second major source of state regulatory power was established in 1978.  The State Environmental Quality Review Act (SEQRA) requires the submission of an Environmental Impact Statement (EIS) for the permitting or initiation of any activity that is likely to have significant environmental implications().  According to SEQRA9, an EIS should include:

  • a description of the proposed action
  • a description of the environmental setting
  • an analysis of potential environmental impacts
  • an analysis of reasonable alternatives
  • recommendations to reduce or avoid environmental impacts

Each EIS is then required to go through a proscribed vetting process before any action is approved.  This process includes a minimum 30 day public comment period before review by the government9.  While SEQRA also includes no specific mention of hydraulic fracturing, it has become extremely significant in the development of New York regulations for fracking.

In 1985, a Generic Environmental Impact Statement (GEIS) was issued on oil and gas drilling in New York1.  While the statement completed the SEQRA vetting process, it again made no mention of hydraulic fracturing.  Consequently, in 2008, when permitting applications began flooding in from companies looking to use fracking to cash in on Marcellus Shale gas, the state had no regulatory framework to deal with these requests.

Celebrity activists delay New York regulations for fracking

Actor Mark Ruffalo heads up an anti-fracking rally in New York.

However, as oil and gas companies began to seek leases and mineral rights from private landowners, the issue began to gain a lot of publicity due in no small part to a plethora of celebrity activists like actors  Mark Ruffalo, Matt Damon, and filmmaker Josh Fox1.

In response to these stimuli, then Governor David Paterson enacted the first New York legislation addressing fracking in the summer of 20081.  Unfortunately, the legislation did not establish any permanent New York regulations or permitting process.  Instead, Governor Paterson ordered a Supplemental Environmental Impact Statement (SGEIS) under SEQRA that would include fracking.  All hydraulic fracking operations would be put “on hold” pending the completion of the SGEIS.

Current state of New York regulations

Five years after the 2008 order, the SGEIS remains uncompleted.  As all hydraulic fracturing is “on hold” until completion, the state of New York is currently in its fifth year of a de facto moratorium on fracking.

New York regulations for fracking delayed by environmental groupsThe original SGEIS was made public in the summer of 2009, with permitting expected to begin by the fall of that year1.  However, as the SGEIS release date approached, a coalition of 18 environmental groups including the New York Public Interest Research Group (NYPIRG), the National Resources Defense Council (NRDC), and Earthjustice mobilized to demand public hearings in addition to the normal SEQRA process1.  The groups demanded increased public comment periods and worked with celebrity spokespeople to gain publicity and flood the New York Department of Environmental Conservation (DEC) with 13,000 comments2.  Due to the high amount of public pressure, the DEC ended up missing all set deadlines for the original SGEIS and scrapped it altogether in favor of compiling a new, revised version1.

In the meantime, all hydraulic fracturing was still “on hold” in New York.  After the 2009 success, environmentalists recognized this advantage.  The past four years have seen a sweeping grassroots movement orchestrated by environmental groups across the state that successfully pushed back the finalization of an SGEIS first to 2011 and then further to 2013 when activists generated 200,000 public comments all legally requiring review by the DEC2.

The latest finalization deadline was set for February 27, 2013.  However, the deadline passed this spring with no final SGEIS and no establishment of regulations.  DEC Commissioner Joseph Martens cited a missing report from the New York Department of Health.  According to Martens, no finalization can occur until the health report is completed7.

So far, Department of Health Commissioner Nirav Shah has set no deadline or date for the completion of his department’s report7.

‘The time to ensure the impacts on public health are properly considered before a state permits drilling. Other states began serious health reviews only after proceeding with widespread HVHF (high volume hydrofracking),’ said Shah.3

As Dr. Shah seems unconcerned with the state deadline, it is still unclear as to when we can expect the implementation of any state level New York regulations on hydraulic fracturing.

Local New York regulations

The five year delay in establishment of state laws has created a vacuum of regulatory power that local governments have begun to fill.  Over 50 New York municipalities have established moratoriums on gas drilling since 2008 and over 100 have banned certain drilling activities such as fracking10.

Cases to watch in the development of New York regulations

As the battle for New York regulations continues, several current lawsuits promise to set important precedents and determine the future of New York regulations.

Norse Energy Corp. v Town of Dryden

Town of Dryden bans frackingWhile numerous New York towns have recently been banning fracking on the basis of local zoning laws, Norse v Dryden is challenging their right to do so.  In 2011, the town of Dryden, NY issued a local zoning ordinance banning oil and gas drilling in the town10.  Soon after, they were sued by Anschutz Exploration Corp.  on the grounds that the local ban was illegal as it was superseded by the state level Oil, Gas, and Solution Mining Act.

After the Dryden ban was upheld by Justice Phillip Rumsey in the original ruling in February 2012, the decision was appealed with Norse Energy Corp. replacing Anschutz Exploration in the suit4.  Upon this first appeal, Dryden’s ban was upheld by a four-judge appellate court in the spring of 20134.  This decision has signaled that New York regulation of hydraulic fracturing may be highly concentrated at the local level in the near future.

However, this case bears close observation as Norse Energy has indicated intentions to appeal the latest decision at higher levels.

Joint Landowners Coalition of New York v New York State

Landowners support fracking in New YorkThe Joint Landowners Coalition of New York Inc. (JLCNY) is a non-profit coalition of landowners in favor of leasing their land to oil and gas companies looking to extract Marcellus Shale gas5.  Citing the economic benefits for private citizens, the group has been an advocate of safe drilling in New York and the establishment of clear regulations and a permitting process5.

When the DEC again defaulted on its latest SGEIS deadline on February 27, 2013, the JLCNY announced its intention to sue the state of New York for violation of its citizens’ property rights3.  The JLCNY maintains that the lengthy delay in establishing permitting and the resulting moratorium has violated private property rights by prohibiting citizens from leasing their land as they see fit3.

The JLCNY is currently accepting donations and fundraising in preparation for the suit.  The coalition is also appraising the value of the potential mineral rights leases of its members with the intention of suing the state for lost profits due to regulatory delays5.

While still in early stages, this pending lawsuit bears watching as it could potentially provide the motivation needed to push through a regulatory finalization at the state level.

 

References:

1)       Ayala, S. (2011, November 29). The story of nys’s fracking moratorium. The Examiner

2)       Campbell, S., & Turrettini, J. (2013). New york state faces a turning point in debate over natural gas fracking .Bloomberg Law

3)       Chick, A. (2013, February 27). Ny misses fracking deadline, landowners to file lawsuit. WBNG News

4)       Dolmetsch, C., & McLaughlin, D. (2013, May 2). Anti-fracking laws in new york towns upheld on appeal.Bloomberg

5)       Fitzsimmons, D. (2013). Lcny hoping for sgeis considers takings lawsuit otherwise.

6)       Gralla , J. (2013, March 7). New york state assembly passes fracking moratorium in largely symbolic measure.Huffington Post

7)       New York Department of Environmental Conservation, (2013). High volume hydraulic fracturing proposed regulations

8)       New York Department of Environmental Conservation, (1963). Oil, gas, and solution mining law

9)       New York Department of Environmental Conservation, (1978). State environmental quality review act

10)    Walsh, G. (2013, May 2). Ny local fracking bans upheld by appeals court. Huffington Post

 

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