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June 13, 2013

Another local moratorium on drilling challenged in New York

While the Court of Appeals decides whether to grant leave to consider the Dryden and Middlefield cases, a new case challenging a local moratorium on drilling was filed yesterday in Delaware County State Supreme Court. One might wonder why after the recent decisions in Dryden and Middlefield upheld drilling bans. However, the basis for new lawsuit is quite different and does not concern whether the local moratorium is preempted by New York’s Oil, Gas and Solution Mining Law. In this case, two landowners have sued the Town of Sidney claiming that its one year drilling moratorium, which was approved on February 14, 2013, is (1) defective under Town Law “protest petition” procedure for failure to secure a supermajority vote (2) invalid for failure to comply with the requirements for a moratorium and (3) unconstitutional under the federal Commerce Clause. Only the second argument regarding the requirements for a moratorium has been previously addressed in the context of drilling moratoriums with one court finding the moratorium improper and the other upholding the moratorium (see prior 10/4/12 alert: http://www.hblaw.com/alerts/NY-Court-Invalidates-City-of-Binghamtons-Two-Year-Moratorium-on-Natural-Gas-Development-10-04-2012 and 3/21/13 alert: http://www.hblaw.com/alerts/Court-Upholds-Local-Moratorium-on-Natural-Gas-Development--Opponents-Strongest-Arguments-Avoided-03-21-2013). Notably, both of these cases are on appeal before different intermediate appellate courts here in New York. The take away is that local control over whether drilling can occur in New York continues to be a very hot issue, requiring court involvement. It also continues to be an issue of great importance to those who hope to see drilling take place in New York, including landowners with land sitting above potentially viable shale reserves, and one that those who oppose drilling bans and moratoria have not given up on. Indeed, this case is just another example of why New York’s Court of Appeals needs to step in and decide once and for all that localities cannot enact ANY local laws or ordinances that concern oil and gas development, including bans and moratoria. Such intervention is essential if, assuming that the statewide moratorium is lifted, New York is ever going to reap the benefits of its vast shale gas reserves.

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