Zoning out fracking: zoning authority under New York State's oil, gas and solution mining law.

• Author: Hooker, Thomas

Introduction I. Fracking and Its Current Legal Landscape A. What Is Fracking, and Who Regulates the Process? B. Federal Law & Interstate Law C. New York State Law 1. Fracking on Hold 2. Environmental Conservation Law 3. Oil, Gas and Solution Mining Law 4. Preemption 5. New York State Constitution and Home Rule Law 6. Mined Land Reclamation Law II. Local or State Rule over Local Governance A. Preemption of Fracking Under the Oil, Gas, and Solution Mining Law B. Constitutional Analysis III. Increasing Public Welfare One Zoning Ordinance at a Time A. Preemption Analysis Should Not Apply B. Applying the Constitution Conclusion INTRODUCTION

Over the past several years, an increasing amount of public concern has focused on the ills of a method of natural gas drilling called hydraulic fracturing, or "Cracking." (1) Fracking has been linked to contamination of drinking water, earthquakes, rapid deterioration of public roads, and air pollution. (2) The safety of drinking water has been a particularly prevalent topic. Although only two Environmental Protection Agency (EPA) studies have linked Cracking to the contamination of water wells, (3) there have been several incidents in which safety precautions have failed to prevent the escape of natural gas into the water aquifer, (4) and several studies have shown a correlation between drilling activity and high methane levels in nearby water wells. (5)

On the other hand, states are always in need of jobs, and natural gas jobs are particularly attractive in a worsening economy. (6) Studies have shown that natural gas has not only been a boon to employment in the core drilling industry, but also to employment in ancillary industries. (7) At a time when the financial crisis has run a number of states' budgets to a financial precipice, (8) the natural gas industry provides a stable source of tax revenue. (9) Moreover, a large state supply of natural gas would decrease dependence on other energy sources, namely coal and nuclear power, which operate within unstable regulatory environments. (10)

Currently, New York faces both a host of financial issues and its own energy crunch. The upcoming closing of the Indian Point nuclear power plant, which supplies up to 25 % of New York City and Westchester County's energy capacity, and the simultaneous impact of proposed state and environmental regulations may cause a 50% reduction in New York State's generating capacity by 2016. (11) As a result, state officials are pushing the State to look for more stable sources of energy. (12)

Due to stricter federal regulation of dirty fossil fuels, such as coal and oil, (13) and advancements in drilling technology, natural gas, which is the cleanest burning fossil fuel, has become a much more attractive resource. (14) The skyrocketing demand for locally extracted and developed natural gas that can be supplied with minimal transportation costs is clearly an incentive behind New York's Department of Environmental Conservation's (DEC's) push to permit instate well drilling and development. On a national scale, consumption is rapidly increasing. (15) The current oversupply of natural gas on the market has pushed natural gas prices down. (16) In anticipation of the expected shift by U.S. utilities from coal to natural gas, (17) however, producers are still desperately seeking to open up more untapped domestic natural gas resources. (18) An increasing percentage of domestic natural gas resources are coming from shale gas. (19)

New York sits atop one of the largest shale formations in the country, the Marcellus Shale. Shale gas found in a shale formation is thermogenic gas. (20) Thermogenic gas, the type of natural gas found in the Marcellus Shale, is formed over millions of years by the application of heat and pressure to buried organic matter. (21) Wells drilled into the gas reservoir allow the highly compressed gas to expand through the wells. (22) Due to the very low permeability of these wells, it is generally not cost-effective to drill a vertical well into the formations. (23) Using an advanced technology like fracking makes the development of unconventional resources cost-effective. (24)

Recently, the U.S. Geological Survey increased its assessment of the Marcellus Shale from 2 trillion cubic feet to approximately 84 trillion cubic feet of undiscovered, technically recoverable natural gas. (25) The wellhead value of 50 trillion cubic feet of natural gas may be $1 trillion; thus, making the natural gas in the Marcellus Shale worth close to $1 trillion. (26)

Responding to public concerns, many towns and cities across the country have taken the initiative to prohibit local gas drilling. In New York, several towns (27) have amended or passed zoning ordinances that would ban fracking, "high impact heavy industry," (28) or gas drilling entirely. Gas drilling companies advocated strongly against these zoning ordinances, and are now filing suit to invalidate them. (29) The DEC has not taken a position against municipalities in court. (30) The Court of Appeals has yet to rule on a municipality's authority to ban fracking locally. Two lower courts have only recently taken up litigation directly addressing the issue. (31)

This Note argues that New York State law does not preclude local zoning ordinances from prohibiting local fracking. Part I of this Note lays out the origin of local zoning authority in the state constitution and subsequent statutes. Part I also outlines the preemption analysis that a court dealing with a challenge to a local anti-fracking ordinance will likely apply. Part II examines the conflict among case precedent that would uphold local zoning ordinances based on express statutory language or based on constitutional authority, and case precedent that would find express preemption. Part III concludes that a constitution-based approach to local authority that adheres to the plain meaning of the constitution most adequately protects local interests of those affected, and best preserves predictability in judicial statutory construction.

1. FRACKING AND ITS CURRENT LEGAL LANDSCAPE

   1. What Is Fracking, and Who Regulates the Process?

      Fracking is a process of stimulating a natural gas well to maximize the amount of recoverable natural gas from the well. (32) To frack shale rock, drillers first drill a vertical well that reaches beyond the underground water resources (33) to the shale formation. (34) A pipe extends through the well, (35) and is encased in cement pursuant to agency regulations. (36) Once the pipe reaches the shale formation, a lateral wellbore will drill 2,000 to 6,000 feet into the shale formation. (37) To facilitate the escape of the highly compressed natural gas into the wellhead, the well operator emits fracking fluid through the piping and into the formation causing the fracturing of shale rock. (38) Fracking fluid is principally water, but also contains sand to crack the shale rock, and a number of unknown chemicals. (39) The potential for these unknown chemicals to reach water wells through fissures formed during the fracking process, (40) and the issue of what to do with the millions of gallons of water mixed with possibly toxic chemicals that will return through the wellhead, are significant environmental concerns. (41)

      Fracking exists within a complex web of overlapping regulatory bodies. (42) Due to its heavy use and discharge of water, it falls under the jurisdiction of federal, state, and interstate governing bodies. (43) Due to the high volume of gas extracted in the process, it falls under state regulation, and due to the fact that drilling involves development of local property, it may fall under local government authority as well. (44)

   2. Federal Law & Interstate Law

      The federal government, through the EPA, sets standards for what can be injected underground, and how to dispose of the wastewater that returns to the surface. (45) Under the Safe Drinking Water Act (SDWA), states are authorized to administer underground injection programs requiring prospective drillers to seek permits disclosing the chemicals they plan to inject underground. (46) A 2005 amendment to the SDWA prohibits the EPA administrator from prescribing requirements that interfere with any underground injection for the recovery of natural gas unless essential to ensuring the safety of underground sources of drinking water. (47) The term "underground injection" excludes the "injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to ... gas ... production activities." (48) Therefore, unless gas drillers that plan to use fracking technology inject diesel fuel underground, they are not required to seek a permit, or to disclose any of the chemicals in their fracking fluid under federal law. (49) Even a restriction on diesel fuel has proven overly burdensome for gas drillers who have yet to file for a diesel fuel permit under SDWA, though multiple tests of fracking wastewater have found diesel fuel is being used in fracking fluid. (50)

      Acting in tandem with SDWA, the Clean Water Act endows the EPA with authority to set standards for the discharge of effluent that comes back up through the well. (51) Under the National Pollutant Discharge Elimination System (NPDES), the EPA prohibits the direct discharge of fracking wastewater into waters of the United States (52) and sets minimum standards for the quality of pre-treatment wastewater. (53) The DEC administers NPDES on a statewide level. (54) Fracking wastewater still ends up in New York's rivers and lakes. (55) The majority of water treatment centers, though happy to take the wastewater and the payments that come along with it, are not properly equipped to fully treat wastewater that has been contaminated with a host of unknown chemicals. (56)

      Fracking requires tons of water and naturally results in tons of wastewater rising back to the surface. (57) A large portion of that water...