Hydrofracking Ban Codified in New York
On April 3, 2020, New York Governor Andrew Cuomo signed into law a budget bill that codifies the State of New York’s ban on high-volume hydraulic fracturing, also known as “hydrofracking.” Part WW of Chapter 58 of the Laws of 2020 (S7508-B/A9508-B), creates a new subdivision 3 of Environmental Conservation Law (ECL) §23-0501. The new subdivision states that no permits shall be issued authorizing drilling, deepening, plugging back or conversion of wells that use high-volume hydraulic fracturing. The law also places a moratorium on permit application for the use of gelled propane hydraulic fracturing until the New York State Department of Environmental Conservation (NYSDEC) completes an analysis of the potential environmental analysis of well development using that technique.
What is Hydrofracking?
Hydrofracking is a process for extracting oil or natural gas from underground rock formations. In New York, companies sought to extract natural gas from Marcellus Shale using horizontal drilling and hydrofracking. Horizontal drilling is a process in which a vertical well is drilled to right above a shale formation, and then the drill is turned horizontally into a shale formation. Many horizontal wells can be drilled from a single well pad on the ground surface and one vertical well. Hydraulic fracturing is then used to extract the gas from the shale. Holes are punched into the shale in the horizontal well using explosive charges. This process fractures the shale allowing for the release of natural gas.
High-volume hydraulic fracturing requires millions of gallons of water per well. Water is needed first to cool the drill bit and carry rock fragments out of the well. Then, water, mixed with sand (known as “proppant”) and chemicals to aid the fracturing process, are pumped into the vertical and horizontal wells to stimulate natural gas production. The sand keeps the fractures in the shale open, allowing the natural gas to be released. The various chemicals reduce friction, prevent corrosion, eliminate bacterial growth, dissolve minerals, and thicken the water to suspend the proppant. Some amount of the water mixture, with gas, then returns to the surface. The water mixture must be handled as a waste product and may contain low levels of radioactive materials including uranium, radium and radon. The natural gas then continues to be extracted from the well.
For the purpose of the new law, high-volume hydraulic fracturing is defined as “the stimulation of a well using three hundred thousand or more gallons of water as the base fluid for hydraulic fracturing, for all stages in a well completion” regardless of whether the well is vertical or horizontal.
NY Executive Orders and the Public Health and Environmental Review of Hydrofracking
After a temporary ban was enacted in Executive Order 41 in 2010 and then extended in 2011 by Executive Order 2, Governor Cuomo announced a permanent ban on hydrofracking in December 2014. The announcement was made following the release of a Public Health Review of hydrofracking by the New York State Department of Health. The Public Health Review concluded that while then-existing scientific information was insufficient, the literature and experience at the time showed negative environmental impacts that are “potentially adverse to public health” and that hydrofracking should not proceed in New York.
Executive Order 41 required that the New York State Department of Environmental Conservation (NYSDEC) complete the process of supplementing its Generic Environmental Impact Statement (GEIS) for Oil, Gas and Solution Mining Regulatory Program first released in 1992 to address hydrofracking. A Final Supplemental GEIS was issued by NYSDEC in May 2015. In its June 2015 Findings Statement, NYSDEC determined that the prohibition of hydrofracking was the “best alternative based on the balance between the protection of the environment and public health and economic and social considerations.”
Hydrofracking and Local Zoning
Alan Knauf and Amy Kendall of Knauf Shaw LLP represented Dryden Resources Awareness Coalition (DRAC), a citizens group that participated in Wallach v. Town of Dryden, 23 N.Y.3d 728 (2014). DRAC moved to intervene in Supreme Court to support the Town of Dryden’s amendment of its zoning ordinance to prohibit hydrofracking, arguing that New York’s Oil Gas and Solution Mining Law (OGSML), ECL §23-0303, does not preempt a local municipality’s rights under the “home rule” provision of the New York State Constitution, the Statute of Local Governments and the Town Law to enact zoning laws protecting the health and safety of their residents. While DRAC was not permitted to intervene, Knauf Shaw argued the merits on behalf of DRAC in Supreme Court and the Appellate Division, and submitted an amicus brief in the Court of Appeals.
In Wallach, the Court of Appeals held that the OGSML did not preempt town zoning laws prohibiting high-volume hydrofracking in the Towns of Dryden and Middlefield. The Court of Appeals described a municipality’s power to enact zoning laws for the health and welfare of the community as “one of the core powers of local governance.”