NY’s Ongoing War Against Natural Gas – An Update

Lenape Resources is one of MDN’s favorite NY-based energy companies. We’ve heard their CEO John Holko speak at events touting the benefits of shale drilling in NY. John doesn’t just say good things about drilling, he puts his money (and his time) into the cause as well. In 2012 Lenape sued the Town of Avon, NY (Livingston County) over their hastily passed fracking ban, a ban that not only bans horizontal or shale fracking (which isn’t even allowed in NY) but also ended up banning vertical fracking in the town, something that’s been going on in NY for more than 40 years. Lenape lost the case in lower court and appealed it (see Lenape Appeals Ruling, Seeks to Overturn Frack Ban in Avon, NY).

In its heyday, before the NY frack moratorium that’s now 5 1/2 years old, Lenape employed 100 people. Today? They have 5 people. Sound familiar (cough *Norse Energy* cough)? NY is driving energy companies out of business with ongoing hostility by municipalities like Avon and with delays by the state. NY is about as business unfriendly as you get. Here’s an AP update on Lenape and the ongoing negative impact of the frack moratorium in NY:
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Lenape Appeals Ruling, Seeks to Overturn Frack Ban in Avon, NY

Lenape Resources Inc., a small independent oil and gas company located in western NY, and its president John Holko, have “guts.” The Town of Avon, NY (Livingston County) where Lenape has a good portion of its operations voted last year to ban fracking. The poorly written law violates existing New York State law which says towns can’t regulate oil and gas drilling. It also was so broadly written it affects conventional/vertical drilling as well as unconventional/horizontal drilling. Lenape has used vertical fracking in Avon for decades (for background, see Fracking Ban in NY Town Closes Conventional Wells Too). Lenape shut down operations in Avon and sued to have the ban overturned.

Unfortunately, in March an “acting” judge in a lower court decision (misleadingly and quirkily called “Supreme” Court in NY) supported Avon’s illegal law (see Third NY Town Wins Court Approval to Ban Fracking). Lenape has received overwhelming support from the oil and gas industry and landowners, so they’ve decided to appeal the lower court ruling to the next level up in an effort to resolve this mess for all drillers in NY:

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Third NY Town Wins Court Approval to Ban Fracking

Tomorrow, the Appellate Division (court) in Albany, NY will hear arguments in the twin cases of Dryden and Middlefield—two New York towns that illegally seized the property rights of all their citizens by completely banning fracking (see Important Developments in NY Fracking Ban Court Cases for background).

A third town, Livingston, has just won a court case that allows them to also illegally ban fracking. Lenape Resources had sued Livingston after the town passed a ban in 2012, claiming the ban affects their conventional/vertical drilling in the town, which has been going on for decades (see Lenape Sues Avon, NY & DEC over Fracking Ban – Seeks $50M). An “acting” judge didn’t agree, and cited Dryden and Middlefield to support his opinion…

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Lenape Sues Avon, NY & DEC over Fracking Ban – Seeks $50M

The residents of Avon, NY will have to come up with $50 million if a local driller wins a lawsuit filed earlier this month. Lenape Resources, a small, independent conventional (vertical) natural gas driller in western New York sued Avon, NY and the state Dept. of Environmental Conservation (DEC) because of a broad-based ban on fracking and natural gas activities in the township passed in June.

Avon, in a misguided attempt to ban fracking, drafted and passed a new zoning law so broad it affected not only unconventional shale drilling but also conventionally drilled (vertical) gas wells. At the time, Lanape’s president John Holko threatened to sue both the town and the DEC if the ban was not rescinded (see this MDN story for background on the ban and Holko’s threat of a lawsuit). The ban stayed, the DEC has refused to enforce a 1981 state law that says only the DEC has the power to regulate drilling, so Holko has sued. He’s asking for compensation to reimburse him for the millions the company has invested in wells and other infrastructure in the township, and for lost revenue because he’s had to shut it all down.

Way to go Avon! Three town board members have just bankrupted your township.

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York, NY Votes Down Fracking Moratorium

Town council members for York, NY (Livingston County) recently voted against a proposed fracking moratorium for the town. Unlike their unwise neighbors in Avon, NY (see this MDN story), York town board members took the time to carefully review the situation and instead of making a hasty political statement, they voted to remain neutral, saving the town a lot of money in legal fees to defend an illegal moratorium (the City of Binghamton’s moratorium was recently overturned).

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NY Driller Threatens DEC with Lawsuit over Town Bans

Dumb and DumberIn the misguided attempt to ban hydraulic fracturing in New York, one town took their ban vote too far. MDN reported about the bone-headed vote by the Town of Avon (Livingston County, NY) on June 28 to ban drilling activity in the town with a broadly worded zoning ordinance (see this MDN story).

A local driller with wells in Avon, Lenape Resources, warned Avon that the broad language they intended to use in their zoning ordinance would cause Lenape to shut down 16 existing conventional (vertical-only) gas wells they operate in the town along with a gas pipeline. Avon town board members didn’t listen and passed the new ordinance. Lenape president John Holko promptly shut down all of his wells in the town, ending free gas for some local residents, and low cost gas for the town itself. A really dumb move on the part of Avon.

There is a new development in this ongoing situation.

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Portage, NY Attorney: Bans are a Form of Regulation

For or against? That’s the question being played out at town board meetings across New York State. And the full question is, “For or against hydraulic fracturing?” As the state Dept. of Environmental Conservation (DEC) gets closer to releasing new drilling regulations for horizontal drilling and fracking, towns are lining up to either ban it (illegal in MDN’s opinion, although the court is still weighing that issue), or to “support it,” which usually means a vote to let the DEC actually issue the new regs before passing judgment.

Somehow, if you vote to wait for the DEC, anti-drillers consider that support. Whatever. One of the latest townships to consider the issue is in western New York—the Town of Portage in Livingston County. The board seems to sense the local political winds are blowing in favor of a ban, but they aren’t acting quick enough for the local anti-drilling zealots who attend every board meeting and complain. What’s interesting about the latest board meeting is not that the board decided to wait, but the admission their attorney let slip in his comments:

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