By J. Wylie Donald, Partner, McCarter & English
Columbia Law School convened a panel on hydraulic fracturing ("fracking") earlier this month. One of the subtopics was its effect on climate change mitigation.
Professor Michael Gerrard laid out the pluses and minuses. On the plus side: burning natural gas yields about one-half the amount of carbon dioxide as burning coal for the same amount of energy. This has been demonstrated by the 9% drop in United States CO2 emissions in the 5 years from 2007 to 2011. Confirming Professor Gerard's statistics is a recent report by the Center for Climate Energy Solutions, Leveraging Natural Gas to Reduce Greenhouse Gas Emissions. On the minus side: natural gas is composed in substantial part of methane, a much more potent greenhouse gas than carbon dioxide, and methane leakage occurs in the production, processing and distribution of natural gas; the low price of natural gas depresses the market for nuclear, solar, wind and other greenhouse-gas-free energy sources; and natural gas greenhouse gas emissions, while better than coal, are still greenhouse gas emissions.
Theoretically, one could assess scientifically this fracking algebra. But, as might be imagined, the future of fracking is not likely to be determined based on a balancing of pluses and minuses. Politics will be central and for the moment those politics are distinctly local. Fracking's future in many places hinges on the ability of local zoning authorities to zone fracking out of the local community. The New York Court of Appeals has been asked to join this fray, when fracking supporters filed a petition for review. In the case, In re Norse Energy, [enhanced version available to lexis.com subscribers], a panel of the Appellate Division considered a local zoning ordinance that banned "all activities related to the exploration for, and the production or storage of, natural gas and petroleum." Petitioner Norse Energy argued the ordinance was preempted by the express terms of ECL 23-0303 [enhanced version available to lexis.com subscribers], of New York's Oil, Gas and Solution Mining Law, which provides that "[t]he provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law." The panel concluded that this language was meant to address the details of mining, but did not reach the traditional power of a community over land use. Accordingly, there was no express preemption. The court further found that there was no implied preemption either.
In our view, reasonable minds could differ. But also in our view, the Appellate Division decision does not matter yet; it would have been appealed by whichever side lost.
The Court of Appeals, if it takes the case, will have to engage in statutory construction. We cannot read the tea leaves there. We hope, however, that the Court keeps the future in mind. More than 170 municipalities in New York have enacted some sort of limitation on fracking within their borders. The Oil, Gas and Solution Mining Law [enhanced version available to lexis.com subscribers], forbids activities that lead to "waste," defined to include: "The locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations, or which causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas." A patchwork of municipalities with zoning ordinances barring fracking will be physically juxtaposed with a patchwork of municipalities permitting fracking. After some time, proponents undoubtedly will have the technical data to support the conclusion that "waste" is occurring and with those facts will return to seek enforcement of a statute forbidding regulation of the "locating ... of any oil or gas well" that causes "reduction in the quantity of oil or gas ultimately recoverable." The Court should consider how its decision now will affect that future situation (unless, of course, New York's legislature acts first).
J. Wylie Donald, a partner at McCarter & English, LLP, counsels and litigates for clients on insurance coverage, environmental and products liability matters. Mr. Donald co-chairs the firm's Climate Change and Renewable Energy Practice. He draws on his substantial environmental experience, his prior non-legal technical work, and his deep involvement in risk management to assist clients in understanding and controlling the coming regulatory and non-regulatory impacts of climate change. He has tried cases and argued appeals in the state courts in New Jersey and Maryland, conducted private arbitrations and mediations, and argued motions in federal courts across the nation.
Read more at Climate Lawyers Blog by McCarter & English, LLP.
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