Driller Sues NY Town to Challenge Local Drilling Ban

judge's gavelAnschutz Exploration this week will file a lawsuit against the Town of Dryden (NY) to strike down the town’s recently passed ban on gas drilling. Dryden is a small township with two villages—Dryden and Freeville—located in Tompkins County, near Ithaca. Its land area is 94.2 square miles with some 13,500 people living there.

In New York, the state reserves the right to regulate the oil and gas industry and, according to state law, local municipalities are restricted to regulating road use with respect to oil and gas drilling. Dryden’s measure banning drilling (passed in August) is, according to the drilling industry, illegal. This lawsuit will challenge it.

Dryden officials argue that the state does not and cannot tell a municipality how it can regulate other industries, and the gas industry should be no different. It is a classical constitutional issue and both sides are watching this one closely.

In what could be a precedent-setting case for municipalities statewide, a Denver-based natural-gas company will file the first lawsuit against a local drilling ban in New York, the company’s attorney said Tuesday.

Anschutz Exploration Corp. plans to file a lawsuit this week in state Supreme Court in Tompkins County to have the town of Dryden’s ban struck down, according to Thomas West, an Albany-based attorney representing the company.

With the state moving toward allowing high-volume hydraulic fracturing – a technique used with gas drilling – Dryden has been among more than 15 municipalities or counties across the state that have altered zoning regulations or passed legislation meant to ban the activity, either temporarily or permanently.

But state Department of Environmental Conservation Joseph Martens has said a court will likely have to decide whether those bans hold up under state law. New York’s environmental conservation law includes a two-sentence clause adopted in the 1980s giving the state power to regulate the oil and gas industry, though it allows municipalities to regulate the industry’s use of their roads.

In August, the Dryden Town Board unanimously approved a change to its zoning laws, expressly prohibiting any gas exploration, extraction or storage.

"It will be a good opportunity to let the courts decide whether municipalities can, under the guise of zoning or otherwise, ban or regulate drilling," West said. "Hopefully, it won’t be a difficult issue for the court."

Dryden Supervisor Mary Ann Sumner defended the town’s decision, saying she was confident the town has firm legal standing. The town, she said, conducted "research on the legality of doing what we did and we are confident that our zoning is within our jurisdiction.

"DEC cannot preempt our ability to regulate land use," she said, asserting that Dryden, like any other municipality, has the right to decide the industries that conduct business within its borders. "Heavy industry is in conflict with our major industries," she said, and the town can regulate heavy industry using its land use laws.*

*Binghamton Press & Sun-Bulletin (Sep 14, 2011) – Gas company to sue Dryden over town’s drilling ban