The New York Supreme Court has upheld the use by municipalities of zoning laws to block hydraulic fracturing of oil and gas wells. The decision won't stop fracing in New York because, thanks to a state-level moratorium imposed to accommodate health and environmental studies, no such work is under way. The decision will, however, complicate future regulation—perhaps enough to preclude drilling in New York's part of the Marcellus shale play. And it's part of a broader trend.
The Pennsylvania Supreme Court took a similar step late last year when it struck down a year-old law giving state regulation of hydraulic fracturing precedence over local zoning controls. The Ohio Supreme Court is expected to rule this year in a similar case. In Colorado, where several municipalities have blocked hydraulic fracturing, an important item before voters in November probably will be a constitutional amendment asserting "an inherent and inalienable right to local self-government," especially in matters involving "health, safety, and welfare."
Problems of localization
For oil and gas operators, localization of regulatory authority creates obvious problems. In many places, it will ban fracing outright. Where it doesn't, regulation will be multilayered, inconsistent, and often incompetent. And where courts, like those in New York and Pennsylvania, uphold local preemption of state governance of hydraulic fracturing, delays are inevitable. States will try to reclaim lost authority, probably with legislation requiring time. Holders of state leases and permits will resort to litigation when they find themselves blocked by local jurisdictions exercising newly validated power. Political backlashes will develop as the economic pain of work undone takes hold.
These developments nevertheless give the producing industry ways to defend hydraulic fracturing—and therefore booming development of unconventional resources—for the long term.
They reveal, for example, the hypocrisy of obstructionism mobilized externally to exploit the politics of localization. One case in point is a group called the Colorado Community Rights Network, which submitted the proposed constitutional amendment in Colorado. According to an April article in Natural Gas & Electricity by Paul S. Enockson, a partner in the Denver office of the law firm BakerHostetler, the group claimed to be fully rooted in the state but in fact received support from the Community Environmental Legal Defense Fund of Pennsylvania. That group, Enockson reported, has supported efforts to ban hydraulic fracturing in Pennsylvania, New York, Maryland, Ohio, and New Mexico. Then there's the supposedly grassroots Frack Free Colorado, led by Russell Mendell. He's a former Occupy Wall Street activist and "field organizer" of Water Defense, an interest group based in New York that opposes fracing. Justifiable irritation over outside pressure on local decision-making helps explain the June 24 defeat of a ban on hydraulic fracturing by voters in Loveland, Colo.
To professional activists, jurisdictional issues are just tactical levers to pull in pursuit of strategic goals—namely, to foreclose development of oil and gas resources. The producing industry should point this out at every opportunity.
At the same time, the industry must fully heed local concerns. Hydraulic fracturing does create environmental problems—just not the scariest ones, such as threats to drinking water, activists trumpet to provoke alarm. Fracing creates problems on the surface: industrial activity in areas unaccustomed to it, various types of spills, disturbance to landscapes, noise, road damage, cultural upsets. Worries about them are inherently local.
Extending setbacks
A controversy in Colorado offers the industry a way to localize operational responsibility. The state allows fracing to occur within 350 ft of homes in urban areas and 150 ft elsewhere. Those limits are appropriate for traditional frac jobs in vertical wells. They're inadequate for the much larger operations now performed in multiple stages in lateral holes thousands of feet long.
The industry should support modernization of Colorado's setback requirements. The position addresses genuine local concerns. And—unlike demands of groups for which no distance from anything promising greater oil and gas supply ever is sufficient—it is, in every sense, workable.
