This week the Joint Landowners Coalition of New York, Inc. (JLCNY) announced that they are seeking landowner plaintiffs for a lawsuit against New York State. JLCNY announced in early February its plan to sue the state. According to JLCNY, the lawsuit “will focus on claims where the failure to grant [high-volume hydraulic fracturing] permits has deprived landowners of all economically viable uses of their real property or interfered with reasonable investment-backed expectations.” The Associated Press recently reported on the fear shared by many New York landowners that a “golden opportunity” has passed due to the state rulemaking delay.
The New York State Department of Environmental Conservation (DEC) missed a Wednesday, February 27th deadline to issue a final version of its proposed regulations for high-volume hydraulic fracturing, or fracking. DEC Commissioner Joe Martens reportedly stated in early February that the regulations will not be completed until the New York State Department of Health (DOH) concludes its review of potential health impacts. Also in early February, DOH Commissioner Nirav Shah signaled that more time was needed to complete the health study. Missing the February 27th deadline means that DEC will need to entertain another round of public comments if the agency re-proposes the regulations. More than 200,000 public comments were reportedly submitted in response to DEC’s proposal published on December 12, 2012.
On February 12, 2013, two environmental groups reportedly filed a lawsuit in federal district court against the Town of Sanford, New York, alleging that the town board unconstitutionally restricted free speech rights by passing a resolution that precludes further discussion of natural gas drilling at monthly board meetings. Sanford, with a population of 2,400 residents, is located near the Pennsylvania border and lies above the Marcellus Shale formation. In September 2012, the board unanimously approved a resolution which provided that “hereafter no further comment will be received during the public participation portion of this or any future meeting regarding natural gas development,” until the New York State Department of Environmental Conservation completes its environmental review of hydraulic fracturing. The board has heard extensively from both sides of the hydraulic fracturing debate and, according to Sanford attorney Herb Kline, “the fracking discussions occupied so much time during the public participation portion of the prior meeting that the town board was not able to accomplish its regular business.” As an alternative, Mr. Kline said the board is willing to accept written materials regarding gas drilling.
The fate of New York’s fracking moratorium remains uncertain. According to the Huffington Post, if the rules proposed by the New York State Department of Environmental Conservation (DEC) are not finalized by February 27, 2013, the proposal will expire and create an opportunity for another round of public comment. Whether the new rules will be issued by the deadline remains uncertain. DEC Commissioner Joe Martens recently testified before state legislators that DEC “[does] not have a timetable” for completing the environmental impact review related to the regulations. Martens indicated that DEC’s completion of the rules is dependent upon a forthcoming report from the Department of Health. Martens added that completing the rules could take even longer if the Health report recommends modifications to the proposed rules. A coalition of New York state lawmakers has demanded that DEC provide an opportunity for the public to comment on the health aspects of the impact review. This could delay the completion of the rules even further. Based on a recent telephone poll of approximately 1,200 registered voters in New York, there is an even divide among New Yorkers on whether to lift the 4 ½ year-long moratorium.
New York State Comptroller Thomas DiNapoli has announced that Cabot Oil and Gas Corporation has agreed to disclose its policies and procedures for reducing and eliminating toxic substances associated with its hydraulic fracturing fluids. DiNapoli commended Cabot Oil and Gas in the announcement, stating “Cabot has taken a positive step to reduce risk to shareholders, the environment and the communities in which it operates . . . This agreement means that Cabot will publicly release what it is doing to use less toxic substances in its hydraulic fracturing fluids and detail how it is ensuring these efforts are being carried out.” DiNapoli has also reached agreements with Hess Corp., Range Resources and SM Energy to disclose potential risks associated with their respective hydraulic fracturing activities.
Bloomberg News is reporting that New York Supreme Court Judge Eileen A. Rakower has denied a petition to block Spectra Energy Corporation’s New Jersey-New York Expansion Project. According to Bloomberg, Judge Rakower ruled that federal law precludes her from hearing the petition, which was filed by Sane Energy Project and other environmental groups. Spectra Energy’s project, which is slated for completion in November 2013, includes the installation of approximately 16 miles of new pipeline and five miles of replacement pipeline in northern New Jersey and southern New York, including Manhattan.
The 30-day public comment period for the New York Department of Environmental Conservation’s (DEC’s) proposed regulations regarding hydraulic fracturing activities ended on Friday, January 11, 2013. The DEC rejected earlier calls to extend the comment period up to 90 days. The DEC currently faces a February 27, 2013 deadline to finalize the draft regulations or allow them to expire.
John Holko, president of Lenape Resources, recently filed suit against the New York State Department of Environmental Conservation and the town of Avon, NY (Livingston County), seeking $50 million in damages for lost business since the town enacted a drilling ban last summer. Lenape Resources has acquired drilling rights on over 100,000 acres in various towns in New York. Like many operators, Mr. Holko must determine if it is economically viable to pursue further drilling in New York in light of local drilling bans and proposed state regulations. Governor Cuomo has said that towns and cities should have a say in a decision about whether to allow drilling within their boundaries. The public comment period for the proposed regulations ends next week, but some public interest groups want additional time to comment.
On January 3, 2013, Minard Run Oil Company (Minard Run), which is based in Bradford, Pennsylvania, announced that it has acquired more than 400 natural gas wells, 56,130 acres of oil and gas leasehold rights, and approximately 195 miles of field production pipelines and other facilities in Central New York from Chesapeake Appalachia LLC, an affiliate of Chesapeake Energy Corporation. Minard Run said that it intends to expand its operations in the Finger Lakes region by developing the newly-acquired oil and gas leasehold rights and by pursuing additional property acquisition opportunities.
The New York Times recently uncovered an eight-page New York Health Department analysis which concluded in early 2012 that fracking could be conducted in a safe manner in New York. The analysis states, “the Department expects that human chemical exposures during [high-volume hydraulic fracturing] operations will be prevented or reduced below levels of significant health concern.” The analysis also states that too many assumptions would need to be made and too many variables exist to project the probability of various hazards. The analysis is a summary of research conducted by the state and other parties, and concludes that fracking can be done safely within the regulatory system that the state has developed over the past several years.