Gas Well Zoning in New York

8/3/2019 Gas Well Zoning in New York

1/45

!"#$%$&'( )*+,-. '#/ 0$1$2'2$*#.3$24 5,.&,%2 2* 6'2"-'( 7'. 8-$(($#9

8':$/ 5;


2/45

Municipal Preemption

! Municipalities are preempted by State law from regulating natural

gas drilling except:

(1)local roads

(2) real property taxes

! ECL 23-0303(2) states:

The provisions of this article shall supersede all local laws or

ordinances relating to the regulation of the oil, gas and solution

mining industry; but shall not supersede local government

jurisdiction over local roads or the rights of local governments under

the real property tax law.


3/45

What Can a Municipality Do

Under the Preemption?

(1) Establish a local road preservation program

(2) Possibly adopt zoning laws related to natural gas drilling

discuss pending lawsuits

(3) Adopt other local laws of general applicability

(4) Participate in the NYSDECs permitting process for

natural gas wells


4/45

Why Should a Municipality Establish a

Road Preservation Program?

Anticipated Traffic Impacts (from SGEIS Section 6.11)

! General rule of thumb: a single large truck = 9,000 automobiles

! Truck traffic will be two (2) to three (3) times greater than for a

vertical well

! DEC estimates 3950 one way heavy truck trips and 2840 one way

light truck trips PER HORIZONTAL WELL (Section 6.11.1.1-Table 6.62)

! If multiple wells are developed at a single well pad, these trips will

repeat for each well (see SGEIS Figure 6.22)


5/45

Why Should a Municipality Establish a

Road Preservation Program?

Anticipated Traffic Impacts (from SGEIS Section 6.11)

! Local roads are not typically designed to sustain a highlevel of vehicle trips or loads (Section 6.11.3)

! In 2010, natural gas companies had spent $200 million in

repairing roads damaged in Pennsylvania from gasdrilling operations


6/45

Authority to Regulate Local Roads:

! The NY Constitution and the Municipal Home Rule Law (MHRL) give

municipalities the power to adopt local laws related to the acquisition,

care, management and use of its highways, roads, streets, avenues and

property. N.Y. Const. art 9, 2(a)(6) and MHRL 10(1)(ii)(a)(6).

! ECL 23-0303(2) allows municipalities to regulate local roads used in

gas drilling operations

! NY Vehicle and Traffic Law (VTL) allows municipalities to regulate

roads

! VTL imposes limitations on municipalities to require permits and fees for

road use

! Under MHRL municipalities can adopt laws requiring payment of road

damage caused by users

Municipal Regulation of Roads


7/45

! Municipal Powers Under VTL:

! Exclude trucks and commercial vehicles from certain roads

! Establish truck routes for trucks in excess of 10,000 pounds

(gross weight)

! Exclude trucks and commercial vehicles in excess ofany

designated weight, length or height! Exclude trucks with gross weight over four tons to prevent

road damage and issue permits based on hardship

! Adopt local laws and ordinances with respect to traffic as

local conditions may require



8/45

! Municipal Limitations Under VTL:

! Section 1604 generally prohibits municipalities

from requiring any tax, fee, license or permit

for use of public highways or excluding an owner

or operator from the free use of publichighways

EXCEPT as authorized in the VTL



9/45

Who Pays for Highway Repairs?

! Generally, the Town Law and Highway Law set forth

comprehensive rules for budgeting and funding for

local road improvements, maintenance and repair! Municipal burden to raise funds via general taxes

! Imposition of general fees for future road

maintenance and improvement upon private parties

based on use of public roads has been ruled invalid! Albany Area Builders Assn v. Town of Guilderland, 74 N.Y.2d 372

(1989) attempt by Town to impose fees upon developers for road

improvements found invalid as preempted by State regulation of

these areas


10/45

Who Pays for Highway Repairs?

! Municipalities have power to seek damages for

damage caused to public highways (but not general

fees)

! Developers often recognize the need not only to

undertake repairs at their cost but to upgradeexisting roads to accommodate their construction

traffic


11/45

Past Experience on Handling Road Repairs

for Large Scale Construction Projects

Wind Park Development

! Issues

! Large numbers of oversize, overweight, over-width vehicles for turbine

deliveries

! High volume gravel and concrete truck traffic

! Project footprint covered most or all of town and used many town roads

! Town roads lacked sufficient surfaces, widths and turning dimensions

! Solutions! Road use agreements between developers and municipalities

! Use of expert engineering consultants to monitor road conditions and

identify necessary repairs! Consultants fees paid by developers

! Repairs paid by developers

! Security/bonding for repairs in event developer failed to perform


12/45

Road Preservation Program Goals

Goals:

! Avoid or minimize damage to local roads resulting from construction

traffic

! Ensure municipality not burdened with costs of repairs to roads

resulting from such use

! Ensure that users who may cause damage to local roads:

! Identify its haul routes! Cooperate in assessing condition of such roads identified

! Undertake any upgrades to accommodate traffic and repairs as

needed during construction

! No fees or taxes levied only security/bonding to ensure work can

be completed if developer fails to do so


13/45

3 Basic Options for

Road Preservation

1. Post roads, issue permits (where allowed), and

obtain security for damage

2. Rely on voluntary Road Use Agreements (RUAs)

3. Adopt local road use and preservation laws


14/45

Posting Roads

Posting Roads:

! Must be done by local law, ordinance, order, or regulation of Town Board

! Restrictions much be reasonable and not arbitrary and capricious

Pros:

Relies on authority granted by

VTL 385(15)(b) (power to

issue permits foroverweight/oversize vehicles)

and VTL 1660 (10), (11), (17),

and (28) (power to establish

truck routes and exclude trucks

from designated highways).

Cons:

Time Consuming to monitor road use and enforce

May be subject to challenge if restriction is not

reasonably related to public safety or protection of roadsor thresholds are arbitrary

May exclude traffic that is not damaging

May allow traffic that is damaging. Weight alone is not

the problem; the problem is weight combined with

frequency


15/45

Voluntary RUAs

Voluntary RUAs

! Contract entered into between municipality and developer in relation to a specific project

! Have been successfully used in connection with large construction projects such as wind

farms and gas pipelines

! Primary mitigation measure for road impacts identified in SGEIS (Section 7.11.1.3)

Pros:

Provides a natural and cooperative framework

to address road damage and repair

Are not triggered by particular thresholds

(weight or number of trucks) all developers

traffic is covered

Allows municipality to require developer to pay

for all costs of implementing program: pre-use

analysis, upgrades, post-use analysis, repairs,

legal fees, etc.

Cons:

Subject to negotiation municipality may

not get everything it wants or needs

Not every developer whose traffic may

damage roads will be willing to enter into

an RUA


16/45

Whats in a good RUA?

! Freedom for Developer to choose haul routes and traffic volume

! Developer agreement to pay for towns consultants to oversee and

implement agreement terms

! Developer to pay for agreed upon upgrades to haul route and for

repairs as needed until project completion

! Reasonable and specific mitigation measures and means of

evaluation of road for damage during and at completion of project

! Proper insurance to be provided

! Contact information for all parties to ensure good communication


17/45

Road Preservation Law

Road Use and Preservation Law

! May be adopted as local law or ordinance

! Must be reasonably related to public health, safety, or general welfare

Pros: Cons:

Allows regulation of all traffic

that can damage roads

May be subject to legal challenges

Can provide for significant

penalties for violations

Must be carefully drafted


18/45

Road Preservation Supported

by Engineering

Any road preservation program should be based on an engineering

standard in order to predict anticipated damage and measure actual

damage.

Engineering standards provide for an objective approach to:

! Establish security/escrow amounts

! Discriminate between developers traffic and baseline traffic

! Discriminate between developers traffic and traffic of other heavy

users

! Determine appropriate upgrades and repairs


19/45

Zoning

Can a municipality use zoning to ban gas drilling as a land use?

! 20 municipalities have adopted zoning bans prohibiting natural

gas drilling

! 49 municipalities have adopted moratoria on natural gas

drilling pending further study

! Some municipalities classified natural gas drilling as a heavy

industrial use and prohibited it. DEC considers gas drilling to

be a heavy industrial use

! Two zoning bans have been challenged in court


20/45


21/45

Zoning

(2) Cooperstown Holstein Corporation v. Town of

Middlefield (Sup. Court Otsego County)

(September 2011)

! Holstein owns and leases almost 400 acres of land

in the Town to natural gas drilling companies.

! Town enacted a new zoning law which prohibited

heavy industrial users (including oil and gas drilling)

in the Town.


22/45

Zoning

Municipal Arguments:

(1) Municipalities have the legal authority to adopt zoning to

regulate land uses (like gas drilling).

(A) Article IX, Section 2 of the NYS Constitution provides

broad home rule authority for municipalities to adopt

local laws that:

! Relate to the property, affairs or government of the

local government

! Are not inconsistent with the NYS Constitution and

general State laws


23/45

Zoning

(B) Statute of Local Governments confers to municipalities

the rights to:

! Adopt zoning regulations

! Comprehensively plan

(C) Zoning authority also found in Municipal Home Rule Law,

Town Law, Village Law and General City Law


24/45

Zoning

(2) Plain language of the preemption statute:

! ECL 23-0303 expressly preempts all local laws

relating to the regulation of the oil, gas and solution

mining industry.

! Zoning regulations do not relate to the regulation of

natural gas drilling. Zoning relates to local land useand is not expressly preempted.


25/45

Zoning

(3) Legislative history of the preemption statute:

! The legislative history does not indicate that the State

Legislature intended to preempt local zoning powers.

(4) Purpose of the preemption statute:

! ECL 23-0303 prevents a patch work of differing

municipal regulations related to the operations of gasdrilling.

! Zoning regulates land uses; it does not regulate the

operation of gas drilling or frustrate the purpose of the

preemption provision.


26/45

Zoning

(5) Municipalities expend significant resources developing comprehensive plansto guide land use development in their communities. Gas drilling may conflictwith these plans.

(6) Natural gas drilling has thrived and co-existed with zoning controls in otherstates (Texas, Colorado, etc.) Why not in New York?

(7) Each municipality should decide for itself under its home rule powers whether

natural gas drilling should be a permitted land use within its borders.NYSDEC and private companies should not make this decision for amunicipality.

(8) Courts have examined similar preemption language in the sand and gravelmining context and upheld a municipalitys right to ban mining through zoningpowers.


27/45

! Interpreting Almost Identical Preemption Statutes--

(1) Mined Land Reclamation Law (1974-1991):

This title shall supersede all other State and local laws relating

to the extractive mining industry. ECL 23-2703

(2) Oil, Gas and Solution Mining Law (1972-present):

This article shall supersede all other local laws or ordinances

relating to the regulation of the oil, gas and solution mining

industries. ECL 23-0303

Zoning


28/45

Frew Run Gravel Products, Inc. v. Town of Carroll, 71 N.Y.2d 126

(1987)

! A sand and gravel mine challenged the Towns zoning code

which permitted mining only in certain areas of the Town.

! The Court of Appeals made 7 critical holdings:

(1) The supersession of all local laws relating to the extractive

mining industry was not intended to preempt the Towns

zoning law establishing zoning districts where mining was

permitted or prohibited.

Zoning


29/45

(2) Zoning laws relate not to the regulation of the mining

industry but to the regulation of land uses generallyan

entirely different subject matter.

(3) By regulating land use a zoning ordinance inevitably exerts

an incidental control over any of the particular uses or

businesses which may be allowed in some districts but not

others.

(4) Local laws of general application which are aimed at

legitimate concerns of a local government will not be

preempted if their enforcement only incidentally infringes on

a preempted field.

Zoning


30/45

(5) There is nothing in State law that was intended to preempt

the Towns zoning law.

(6) Allowing such an intent would drastically curtail the Towns

Municipal Home Rule Law powers to adopt zoning laws in

the best interest of the Town.

(7) The purpose of the mining preemption was to prevent local

governments from enacting laws that would conflict and

frustrate the States encouragement of mining through

standardized regulations. Zoning laws do not conflict with

this purpose.

Zoning


31/45

Gernatt Asphalt Products, Inc. v. Town of Sardinia, 87 N.Y.2d 668 (1996).

! Sardinias zoning law prohibited mining anywhere in the Town. A mining company

challenged the ban.

! The mining company argued that if land within the Town contained extractable

minerals, State law obliges the Town to permit them to be mined somewhere in the

Town.

! Court of Appeals made 2 critical holdings:

(1) the State law does not preempt the Town from adopting a zoning law that

bans mining as a land use in the Town.

(2) a Town is not obliged to permit the exploitation of any and all natural

resources within the Town as a permitted use if limiting the use is a

reasonable exercise of its police powers to prevent damage to its citizens

and to promote the interests of its community.

Zoning


32/45

Final Thoughts:

! Whether or not a municipality can adopt zoning bans

(or moratoria) related to natural gas drilling is now in

the hands of the courts.

! Lower court decisions could be issued by the first half

of 2012. Appeals likely. Final appellate court

decisions expected in late 2012 or 2013.

Zoning


33/45

! NY Court of Appeals held:

Local laws of general applicationwhich are aimed at legitimate

concerns of a local governmentwill not be preempted if their

enforcement only incidentally infringes on a preempted field. Frew RunGravel Products, Inc. v. Town of Carroll, 71 N.Y.2d 126 (1987).

! ECL preemption overrides all local laws relating to the regulation of

gas drilling. It does not override other expressly granted State

powers duly delegated to the municipality.

Other Municipal Laws


34/45

! State laws allow municipalities to adopt local laws on a variety of topics. These laws may

incidentally infringe on gas drilling and may not be preempted.

! Wetlands Protection Laws (ECL Article 24, Title 5)

! Flood Plain Protection Laws (ECL Article 36)

! Solid Waste Management Laws (ECL Article 27)

! Air Pollution Laws (ECL 19-0709)

! Tree Preservation Laws (GML 96-b)

! Water Basin Laws (GML 99)

! Building Code Laws (Executive Law Article 18)

! Real Property Taxes (ECL 23-0303(2) & Real Property Tax Law)

! Road Protection Laws (VTL & ECL 23-0303(2))

! Miscellaneous local laws

! These local laws must apply equally to everybody in the Town. They cannot apply to gas

drilling only.



35/45

Wetlands

! ECL 24-0501 each local government may adopt, amend, and upon

filing of the appropriate freshwater wetlands map, implement a

freshwater wetlands protection law or ordinance in accordance with

this article to be applicable to all freshwater wetlands wholly or

partially within its jurisdiction.

! Natural gas well sites and their access roads may impact wetlands.

! The Courts have upheld local wetlands laws as having only incidental

effect on preempted mining operations. Patterson Materials Corp. v. Town ofPawling, 264 A.D.2d 510 (2d Dept. 1999).



36/45

Flood Plains

! DECs SDGEIS: the SGEIS supports a finding that the [NYSDEC] not

issue permits for high volume hydraulic fracturing operations of any

well pad that is wholly or partially within a 100-year flood plain.

! ECL 36-0101 land use regulation is principally a matter of local

concern; therefore local governments have the principal responsibility

for enacting appropriate land use regulations that will meet federalstandards and permit the sale of flood insurance in such

communities.

! Municipalities adopt flood damage prevention local laws to regulate

development in flood plains.



37/45

Solid Waste

! ECL 27-0711 nothing in this titleshall preclude the right of any governing body of

atown to adopt local laws, ordinances or regulations [relating to solid waste] which

are not inconsistent with this title or with any rule or regulation which shall be

promulgated pursuant to this title.

! These ECL provisions allow municipalities to adopt local solid waste laws that are as

stringent, if not more stringent, than State solid waste laws.

! Municipalities have adopted local solid waste laws regulating recycling, disposal of

solid waste, land clearing waste, etc.



38/45

Air Pollution

! ECL 19-0709 nothing in this articleshall preclude the right of any governing

body of atown to adopt local laws, ordinances or regulations [relating to air

pollution] which are not inconsistent with this article or with any code, rule or

regulation which shall be promulgated pursuant to this article

! These ECL provisions allow municipalities to enact local laws to control air

pollution

! Municipalities have adopted local air pollution control laws regulating

incinerators, brush burning, fuel burners, etc.

! Natural gas well sites may generate air emissions related to fugitive dust

emissions on roads, etc.



39/45

Tree Preservation

! GML 96-b anytown is hereby empowered to provide for the protection and

conservation of trees and related vegetation. Such legislative body may require

appropriate conditions applicable to any activity involving the removal or destruction of

trees or the substantial alteration of grade level around trees may include, where

appropriate, requirements that the activity be done as specified in an approved

landscape plan and that the removed trees be replaced by the planting of the same or

alternate species of trees, and may provide, in connection therewith, required plantings

for screening purposes. Such regulations, special conditions and restrictions, adopted in

the exercise of the police power, shall be reasonable and appropriate to the purpose.

! The Courts have upheld local tree preservation laws as having only incidental effect on

preempted mining operation. Seaboard Contracting & Material, Inc. v. Town of Smithtown, 147A.D.2d 4 (2d Dept 1989).

! Natural gas well sites and their access roads may clear forested areas.



40/45

Water Basins

! GML 99 the governing board of any town may by local

law, ordinance or resolution regulate the construction,

maintenance or use of open wells, cesspools, cisterns,

recharging basins, catch basins or sumps and may require

that such installations be suitably covered or surrounded

with protective fencing.

! Natural gas well sites could use water impoundments.



41/45

Building Code

! Executive Law 381(2) every local government shall administer and

enforce the uniform fire prevention and building code

! Many municipalities adopt local laws providing for the administration

and enforcement of the State building code.

!

State Building Code applies to industrial structures including oil andgas facilities.

! Town building inspectors may have to issue building permits for

structures on gas drilling sites and conduct inspections.



42/45

Miscellaneous Local Laws

Legal Authority

! Town Law 130 the Town Boardmay enact, amend and repeal ordinances,

rules, and regulations not inconsistent with law for the following purposes:

(1) Building Code

(2) Plumbing Code

(3) Electric Code

(4) Fire prevention

(5) Dumping grounds

(6) Use of streets and highway

(7) Location and construction of driveways

(8) Smoke, gas and wastes

(9) Excavated lands

(10) Unsafe buildings and collapsed structures



43/45

Other local laws could include:

! Steep slopes (Paterson Materials case)

! Timber harvesting (Paterson Materials case)

! Historic preservation (City of Buffalo v. National Fuel Corp., 1 Misc. 3d 857 (Buffalo City Court 2003)*reversedgrounds unknown*

! Stream protection

! Stormwater control

! Farm land protection

! Nuisance control (noise, light, air pollution, water pollution, etc.)

! Curb cuts

! Many different types of local laws are possible.

! Any local laws must be drafted properly by your Town Attorney to ensure

that they dont run afoul of the preemption in ECL 23-0303(2)



44/45

Municipal Considerations in NYSDECs SDGEIS(subject to changes in SFGEIS)

! DEC will limit simultaneous construction of well pads in a Town and wells in close proximity to

each other.

! DEC will consider these measures in consultation with local governments to lessen cumulative

community character impacts.

! DEC will notify local governments of each drilling permit application for high volume

hydrofracturing.

! Well drillers must certify in their DEC permit application that the drilling is consistent with local

land use and zoning laws including comprehensive plans. If not, additional DEC review is

triggered.

! DEC created the Hydraulic Fracturing Advisory Panel to develop recommendations to avoid

and mitigate impacts to local governments and communities. Municipalities should notify the

Panel of potential concerns and issues.

Municipal Participation in NYSDEC

Permitting Process for Natural Gas Wells


45/45

Comments or questions?

!"#$%&$'

(%)*+ ,- .)/0/$$1 .23-

+/)/0/$$45"6-&"7

86*$/7%# 92$/07%# : ;%##%

Documents

Gas Well Zoning in New York