Home Rule vs. State Rule – Can communities in New York State stop or regulate drilling activities?

Many municipalities in Upstate New York have passed bans on gas drilling. Many more municipalities have enacted moratoriums in anticipation of the DEC’s completing its environmental review. If the DEC lifts the four year old State moratorium, these local regulations will directly affect drilling activities in the subject municipalities. One company, Lenape Resources, has already sent a letter to the Department of Environmental Conservation Commissioner Joe Martens warning that a moratorium prohibiting natural gas development of wells located in the town of Avon forced them to
shut down wells there, we can expect to see these threats turn into lawsuits in New York State Courts in the not too distant future.

So far the towns issuing bans have been successful because judges have ruled that the bans are not regulations, and therefor they do not violate the New York State law against local regulation of gas development. Other states have been dealing with this  same issue. In Pennsylvania a court has ruled that a state can’t restrict localities
from using zoning laws to regulate oil and gas drilling within their borders. The state of Ohio passed a law in 2004 banning townships from passing local ordinances. West Virginia courts have overturned ordinances passed by local municipalities that banned gas drilling.

The basic legal issue at stake here is called “preemption”. Everybody recognizes that Federal Government can preempt State Government on issues such as constitutionality, federal taxes, and interstate trade. Likewise, in theory, States can preempt local municipalities on issues of public policy that affect the entire state.  New York is somewhat unique as its governance model is based upon the Dutch model, which allows for more discretion at the local government level. This is why New York is known as a “Home Rule” state. It will be interesting to see how this issue is ruled upon by Appellate Divisions in the State of New York. In all likelihood, the New York Court of Appeals will have to rule to resolve any conflicting case decisions that are decided here in New York.



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