ENVIRONMENT

Threat to NY's fracking ban could come from Congress

John Ferro
Poughkeepsie Journal
Singer Natalie Merchant leads a group of anti-fracking activists in a rendition of Pete Seeger's "This Land is Our Land" during an event at the New York State Capitol building in Albany on Dec. 18 to thank Gov. Andrew Cuomo and state Department of Environmental Conservation officials for the banning of high-volume hydraulic fracturing.
  • Courts unlikely to overturn ban outright
  • Legal challenges based on property rights have better chance%2C experts say

When Gov. Andrew Cuomo announced last month that the state would soon ban high-volume hydraulic fracturing, those who had opposed the controversial method of extracting oil and gas rejoiced.

But even as the anti-frackers gather in Albany this week for another celebration, uncertainty remains about whether the ban will be challenged in court, or perhaps undermined through legislative action in Congress.

Indeed, Cuomo predicted there would be "tons" of lawsuits.

At issue is the impact the ban will have on property owners, particularly in the Southern Tier, who were counting on revenue from the sale or lease of the mineral rights to their land.

The Poughkeepsie Journal has learned that even before the state has finished writing its final language for the ban, some in Congress have begun considering ways to make it easier for those property rights owners to sue the state for compensation.

"I think they are potentially looking at legislation that would make it easier to bring that kind of claim, where you have a governmental interference with property rights, including mineral rights," said Tom West, an Albany-based lawyer who has represented oil and gas companies in fracking cases.

Acting health commissioner Dr. Howard Zucker presents the department's findings on hydraulic fracturing during a cabinet meeting at the Capitol last month in Albany. At right is environmental conservation commissioner Joseph Martens. Gov. Andrew Cuomo’s administration will move to prohibit fracking in the state, citing unresolved health issues and dubious economic benefits of the widely used drilling technique.

In a statement, U.S. Rep. Chris Collins, a Republican from western New York who has been a strong supporter of fracking, said he is "engaged in a series of discussions on the next steps needed to help restore the individual property rights of New Yorkers."

Collins, who was elected to a second term in November, was recently named to the House Energy and Commerce Committee, which has broad economic oversight, ranging from the energy sector to manufacturing and health care.

Collins did not provide specifics, but experts say such challenges would revolve around the concept that governments, in certain circumstances, must compensate landowners for the loss of property rights.

In a blog post, two former high-ranking state officials said lawsuits based on property rights would have a better chance of succeeding in court than an effort to overturn the ban.

Steven Russo, former chief legal officer of the state Department of Environmental Conservation, and Robert Rosenthal, a former assistant counsel for energy and environment in the governor's office, declined to comment on potential legal threats.

But in their blog post, they argue a direct challenge to the ban is unlikely to succeed because the courts, on matters as scientifically complex as fracking, tend to defer to the judgment of the regulatory agencies.

Threats to New York’s fracking ban could come from Congress. A Western New York congressman said he has begun discussions that would make it easier for landowners to sue the state in court. Last month, Gov. Andrew Cuomo announced the state would ban the controversial practice of removing oil and gas from underground using drilling rigs like this one in New Milford, Pa.

Another factor: The drop in oil and natural gas prices has decreased the likelihood the energy industry will bother to mount a costly legal battle in a state as unfriendly as New York.

And even if those prices rebound, it likely will be too late since New York's statute of limitations on challenges to agency decisions is just four months.

Property rights fight more likely

More likely is a fight arising on the property-rights front, where landowners would bring what are known as "takings" claims.

"You have a bundle of rights when you buy a piece of land that has not had its mineral rights (sold or leased)," West said. "You own the surface, and you own all the minerals underneath it, to the center of the earth."

The challenge facing the claimants is to demonstrate that their property interests have been illegally confiscated by the state.

Owners of property rights who seek a takings claim must provide that they have no reasonable use for their property as a result of the government's action.

The state could counter that despite a fracking ban, a landowner could still use the surface of the property, say, to farm or subdivide into condominiums. And a fracking ban does not stop landowners from selling their mineral rights to mining interests.

Congress could step in, West said, and write law that would make the mineral rights separate and distinct. Furthermore, it could ensure that the owner of those rights could make those claims in federal court, as opposed to state court.

Such action may not challenge the fracking ban outright.

"But keep in mind," West said, "if you have the prospect of having to pay out hundreds of millions — or billions — of dollars to landowners as a result of your regulatory action, you might rethink your strategy."

A lawyer based in the Southern Tier, who represented the Joint Landowner Coalition of New York in legal challenges to the fracking moratorium, said it is too early to predict what will happen next, partly because the state has not finalized the ban.

"We don't know how they are going to write it up," said Scott Kurkoski of Vestal in Broome County.

Said West: "We have to first see what the state does to finalize the process, how many nails they put in the coffin or whether they leave the lid open a crack."

John Ferro: 845-437-4816; jferro@poughkeepsiejournal.com; Twitter: @PoJoEnviro