Home Rule Over Gas Drilling

New York is a state with strong home rule. Here local governments (county, town, and city/village) are granted broad powers to govern themselves. Under Article IX of our State Constitution as implemented by Municipal Home Rule Law, they can set up their own system of governing and ordinances. State approval is unnecessary, subject to excluding certain topics and to meeting certain requirements.

Nevertheless, New York State can pass general laws. In 1971, our State passed the Environmental Conservation Law. Within it, Article 23 defines and empowers the Bureau of Oil and Gas Regulation in the Division of Mineral Resources. As amended in 1981, title 23-0303(2) states

“The provisions of this article shall supersede all local laws or ordinances relating to the regulation of oil, gas, and solution mining industries; but shall not supersede local government jurisdiction over local roads or rights of local government under real property tax law.”

In other words, the State grabbed complete control over drilling except when it concerns local roads or property taxes. As it stands today, with all local zoning control preempted, if a landman could lease an acre or two within the Village of Franklin, they could drill from there, and the Board of Trustees would be powerless. However, the meaning of §23-0303(2) is unsettled, with no decision by the Appellate Court to support this interpretation, which hinges on the meaning of “relating to regulation of.”

There is court precedent for home rule over mining. Another title of the ECL, §23- 2703(2) (title 27, known as the Mined Land Reclamation Law), performs the same function for the Bureau of Resource Management and Development. It originally defined the control by our State over mining in terms similar to those for drilling. Then, in the 1980s, the town of Carroll in Chautauqua County passed a zoning ordinance that prohibited surface mining in its AR-2 districts. Frew Run Gravel Products, Inc. sued the town to have this ordinance overturned. In 1987, the Appellate Court affirmed the zoning powers of the town (71 N.Y. 2d 126, 131-133). It wrote

“A municipality is not obligated to permit the exploitation of any and all natural resources within the town as a permitted use, if limiting that use is a reasonable exercise of its police power to prevent damage to the rights of others and to promote the interests of the community as a whole.”

Other towns followed, such as New Scotland, Albany County and Smithtown, Suffolk County. Likewise they were challenged and affirmed. To cut through this confusion, the state legislature in 1991 revised §23-2703(2) to codify the court rulings. It now reads, in part “that nothing in this title shall be construed to prevent any local government from … enacting or enforcing local zoning ordinances or laws which determine permissible uses of zoning districts.”

A similar process has begun for home rule over drilling. A few towns have passed moratoriums while they rewrite their zoning: DeWitt, Marcellus, Skaneateles, and Tully in Onondaga County, Gorham in Ontario County, and Jerusalem in Yates County. The first town to revise their zoning of heavy industry to explicitly cover drilling was Otsego in Otsego County, by a vote of 4 to 1 this May, followed in June by neighboring Middlefield 5 to 0.  Also in June, neighboring Springfield, which has no zoning, passed a ban on heavy industry 5 to 0. These are the three towns that surround Otsego Lake.

Eventually one or more of these towns will have their ordinance challenged in court, and defending such challenges would be long and expensive. To avoid this, two local State Senators – Bonacic (R-42nd, including Delaware County) and Seward (R-51st, including Otsego county) – are among several co-sponsors of legislation to amend ECL title 23-0303(2) to affirm the power of local governments to regulate natural gas drill through planning and zoning: S.3472/A.3245, Clarify Applicability of Local Protections Over Natural Gas Development.

What could it mean to Franklin if home rule over drilling is affirmed? Town Law Section 264 requires that zoning regulations be “made in accordance with a comprehensive plan.” Town of Franklin Comprehensive Plan (2006), section 11.9 (Mineral Extraction & Natural Gas) reads “… natural gas exploration in the town must be carefully monitored by the Planning Board to ensure they are well-sited.” As to what should constitute a “well-sited” well, the first six goals from Chapter 12 of our plan are:

  • Retain rural character
  • Revitalize hamlet business center
  • Enhance economic development, specifically agri-business, eco-tourism, and small business
  • Preserve historic resources
  • Protect natural resources
  • Better design of commercial and industrial developments

Since the amendment of ECL in 1991, courts have continued to affirm home rule over mining. The court affirmed the right of towns to ban mining entirely in Gernatt Asphalt Products, Inc. v. Town of Sardinia, 87 N.Y. 2d 668, 683 (2d Dept. 1996)). This raises the possibility of similarly banning drilling in a town.

Also since then, the court has affirmed the general applicability of town law to mining. For examples, restricting construction on steep slopes (Patterson Materials Corp. v. Town of Pawling, 264 A.D. 2d 510, (2d Dept.,1999)) and building of associated structures on site (Town of Parishville v. Contore Co., Inc., 667 A.D. 2d 453 (3d Dept. 1998)).

Some land owners have claimed that if their towns did not allow unrestricted drilling, then these towns were robbing them potential signing bonuses and royalties. However restrictions on land use through zoning are not a form of taking, which would be unconstitutional under the Fifth Amendment “… nor shall private property be taken for public use, without just compensation.” A taking is the loss of all use of property according to the Supreme Court, for example in eminent domain. Zoning merely restricts the legal uses. What is more, under common law, “all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community” according to the Supreme Court in Mugler v. Kansas 123 U.S. 623, 665 (1887). This is a function of zoning. If the courts or legislature similarly affirm home rule over drilling, then towns will be able to direct drilling so that it benefits our community, not just the energy companies.