On May 2, 2013, the New York Supreme Court, Appellate Division, ruled that a zoning ordinance banning “all activities related to the exploration for, and the production or storage of, natural gas and petroleum,” was not preempted by the New York Oil, Gas and Solution Mining Law (OGSML). Norse Energy Corporation USA v. Town of Dryden, No. 515227 (3d Dep’t 2013). If not overturned by the Court of Appeals, or over-ridden by statutory amendment, the Norse Energy decision provides each municipality in New York the power to preclude hydraulic fracturing and related exploration and production activities.
The Third Department’s decision contains several dubious leaps of logic and reason to arrive at a result that seems entirely inconsistent with the OGSML. The statute states that its provisions:
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].
Slip op. at 7. To avoid the seemingly plain meaning of the broad preemption language, the Third Department interpreted the phrase “regulation of the oil, gas and solution mining industries” to mean only the “detail or procedure” of those industries. Id. at 8. By contrast, the court ruled that the town’s zoning ordinance “simply establishes permissible and prohibited uses of land within the Town for the purpose of regulating land generally.” Id. (citation omitted).
While purporting to analyze the legislative history of the OGSML, and decisional precedent in New York, the Third Department ignored such authority as the regulations promulgated pursuant to the OGSML and the environmental impact statements prepared to address the environmental impacts of such activities to inform its analysis of the scope of how the oil, gas and solution mining industry is “regulated.” Similarly, in its determination that an ordinance banning all such activities “will inevitably have an incidental effect upon the oil, gas and solution mining industries,” the court stretched its authority to interpret and analyze well past defensible limits.
Norse is entitled to petition for leave to appeal from the Court of Appeals. However, the court does not routinely grant such leave, particularly in cases where the Appellate Division affirms without dissent or there is a split in authority among departments of the Appellate Division. Entities seeking to develop oil and gas resources in New York should seriously consider filing amicus briefs in support of leave to appeal and on the merits of Norse’s arguments.