Law Offices of Rodenhausen Chale & Polidoro LLP

According to weather forecasts, crops in the southwestern Midwest will continue to bake as the region endures the most severe drought in decades. Corn and soybean crops have been especially hard hit, which will cause prices for food, including corn products, beef, chicken and dairy products, to temporarily spike.

As a result, farmers in the Hudson Valley region may experience an economic boom this year as their crops sell for record prices. This temporary economic benefit is in addition to the growing local food economy. A recent article in the New York Times states that “the movement toward local food is creating a vibrant new economic laboratory for American agriculture,” which in turn fosters "more stable, predictable and measurable [local farm sales]." PR Newswire reports that Jerry Cosgrove, Associate Director of the Local Economies Project and a local foods expert in the Hudson Valley, agrees with the New York Times article’s focus on “the fact that local food production is a great way to strengthen local economies.”In fact, the local food industry banked in at $4.8 billion back in 2008, a number that is sure to keep growing despite the poor economic climate.

Economics aside, the drought reaffirms the need to support local agriculture to assure the continued availability of local food sources. Local farmer's markets provide access to corn and other crops that may not be readily available in other parts of the country.

A quick review of available zoning laws reveals that nearly every community in Dutchess County allows agriculture as a permitted use. However, communities can do more to encourage the continued growth of agriculture through zoning. For example, the Town of Red Hook has recently created the “Agricultural Business District” to support farming operations and related industries while discouraging residential development projects which often fragment important farmlands and result in conflicts between agricultural and residential uses. Many uses that support agriculture, such as wineries, distilleries, cold storage facilities, farm equipment repair and agritourism uses are permitted and subject to a streamlined review process.

Other methods that communities can use to support agriculture include purchasing development rights, requiring new residential devlopment to provide a buffer around existing farms, permitting roadside stands in every district, and using an average density, rather than a minimum lot size, which allows for greater protection of open space. More information on supporting farming with zoning can be found on the American Farmland Trust website.

Only July 27, the EPA announced in a Federal Register notice, that it is inviting public comment on the possible cancellation of the registration of clothianidin, the pesticide associated with honey bee colony collapse. We reported previously that on July 19 the EPA denied a petition filed by beekeepers and honey producers, among others, asking for the emergency suspension of the registration of clothianidin. EPA is now accepting comments on the agency's denial of emergency suspension as well as on the petition for permanent cancellation of the registration.

Interested persons may submit comments to EPA by referencing docket identification number EPA-HQ-OPP-2012-0344; FRL-9355-1. Comments may be submitted electronically by going to http://www.regulations.gov and following the instructions. Further information on how to submit comments is set forth in the Federal Register notice cited above.

NRDC recently released a report on state fracking chemical disclosure laws and their enforcement. The report found that more than half of the states with fracking activity currently have no disclosure requirements at all. Of the state disclosure laws, none require comprehensive disclosure. In those states requiring some degree of disclosure, enforcement was found to be uneven.

NRDC lists the following reasons, among others, why the chemical constituents of fracking fluids should be publicly disclosed. Disclosure in advance of the fracking would allow neighboring landowners to establish a baseline for the presence or absence of those chemicals in their groundwater. In the event any contamination is detected, disclosure of the contents of the fracking fluid would help determine the source of the contamination. Medical professionals and first responders would have ready access to the information, rather than having to go through the process of attempting to get confidential information from state agencies, if they have it. Finally, if it is true, as the industry claims, that there is little or no risk to the public from fracking fluids, full disclosure would allow open discussion and analysis that may (or may not) confirm their position.

The study found that of the 29 states with fracking activity, only fourteen required some level of public disclosure as of June, 2012. The states with disclosure requirements in effect as of the time of the study were Alabama, Arkansas, Colorado, Indiana, Louisiana, Michigan, Montana, New Mexico, North Dakota, Ohio, Pennsylvania, Texas, West Virginia, and Wyoming. In many of those states, the report found that information was difficult to obtain. State disclosure websites were found to be difficult to navigate and individual wells difficult to locate.

The site www.fracfocus.org, touted by some industry spokesmen as the full disclosure center, was found by NRDC to be "severely limited". The disclosure form contained fields for only a limited subset of the information that state disclosure rules required. The site did not contain the full required disclosure for any of the states covered by the site.

In this report, NRDC considered New York to be a state in which fracking activity is being conducted with no chemical disclosure law in place. This is because the moratorium on fracking only applies to high volume, high pressure hydraulic fracturing. Fracking using less than 300,000 gallons of water has been occurring and continues to be permissible. New York's proposed fracking regulations would allow drillers to claim the constituents of their frack fluids is confidential business information so that public disclosure would not be permitted except in emergency situations.

Pennsylvania has for some time had an active fracking industry and a continuing controversy over the rights of municipalities to control where fracking occurs. In February of this year the Pennsylvania legislature enacted a law known as Act 13, which attempted to preempt local zoning with regard to drilling in the Marcellus Shale for natural gas. The law essentially attempted to take control of zoning away from municipalities and to determine what could or could not be included in local zoning provisions. It also imposed a state-wide impact fee and gave state officials the authority to waive setback requirements.

In a split decision announced this week, the court overturned on constitutional grounds the attempted preemption of local zoning authority and the provision allowing state officials to waive setback requirements. The court ruled that the preemption provision "violates substantive due process because it does not protect the interests of neighboring property owners from harm, alters the character of neighborhoods and makes irrational classifications -- irrational because it requires municipalities to allow all zones, drilling operations and impoundments, gas compressor stations, storage and use of explosives in all zoning districts, and applies industrial criteria to restrictions on height of structures, screening and fencing, lighting and noise."

In New York, the courts in the Middlefield and Dryden cases discussed earlier in this blog held that the state had not preempted local zoning in the 1981 Oil, Gas and Solution Mining Law. If these decisions are ultimately upheld, the New York legislature will be faced with the difficult decision of whether to expressly preempt local zoning. The words of the Pennsylvania court not only introduce constitutional issues to be considered in any such override, but also highlight the inappropriateness of state control of local zoning laws and local zoning decisions.

Over the past three years, state and local officials, business leaders, environmentalists, and the public in New York have been locked in a fractious and escalating debate about whether and how to allow high pressure high volume hydraulic fracturing (known as “hydrofracking” or “fracking”), a method of drilling for natural gas, in New York.

Under the Environmental Conservation Law of the State of New York, the New York Department of Environmental Conservation (“DEC”) is the permitting agency for drilling operations and must study the potential environmental impacts of hydrofracking before finalizing its regulations. The DEC has released a revised Draft Supplemental Generic Environmental Impact Statement (“dSGEIS”) regarding hydrofracking. Until the environmental impact statement is final, there is a de facto moratorium on the issuance of drilling permits. In the meantime, the industry is laying the groundwork for obtaining permits by leasing land.

Several towns in the Marcellus Shale region have taken affirmative action against hydrofracking in their communities by temporarily or permanently banning it within their borders. Proponents of hydrofracking have brought legal challenges against the towns of Dryden and Middlefield, which have permanently banned gas drilling through zoning; the plaintiffs assert that the towns lack legal authority to adopt such laws in light of preemptive language contained in the relevant language of the Environmental Conservation Law.

The Town of Middlefield is a rural community which encompasses a portion of the Village of Cooperstown in Otsego County, New York. Its predominant land uses are agriculture, forest and low density residential. Concerned about its water supply and its community character, the Town hired a consultant to analyze the potential impacts of heavy industry on the Town and then amended its comprehensive plan and zoning law to prohibit heavy industry throughout the Town. Heavy industry is broadly defined by its characteristics and includes “drilling of oil and gas wells” as well as chemical manufacturing, petroleum and coal processing and steel manufacturing. The local law to amend the Town’s zoning was adopted on June 14, 2011.

The Town of Middlefield’s law was challenged by Cooperstown Holstein Corporation (“Holstein”), a local dairy operation that has leased approximately 400 acres of its land for natural gas development. In its complaint, Holstein claims that the Oil, Gas and Solution Mining Law of the State of New York (“OGSML”) preempted all local regulation of gas drilling, including the adoption of local zoning laws.

On February 24, 2012, Supreme Court Justice Donald F. Cerio issued a decision denying Holstein’s motion for summary judgment and granting summary judgment in favor of the Town of Middlefield, upholding the Town’s zoning law which banned natural gas drilling. After thoroughly reviewing the legislative history of the OGSML, the court found no provision in it to support Holstein’s position, stating that

[N]either the plain reading of the statutory language nor the history of [the OGSML] would lead this court to conclude that the phrase ‘this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries’ was intended by the Legislature to abrogate the constitutional and statutory authority vested in local municipalities to enact legislation affecting land use.

The court also relied on caselaw interpreting a “strikingly similar” provision of the state’s Mined Land Reclamation Law (“MLRL”), which found that “in the absence of a clear legislative intent to preempt local control over land use, the [MLRL] could not be read as preempting local zoning authority.”

The Middlefield decision upholds the constitutional authority of municipalities to control the land uses within their borders through zoning. Towns seeking to amend their zoning laws to regulate natural gas drilling activities should take care to limit such regulations to the location of such operations, and not the manner of such operations.

The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.

This article was prepared with John R. Nolon for a forthcoming article on the regulation of hydrofracking. Mr. Nolon is Professor of Law at Pace Law School, Counsel to the Land Use Law Center, and director of the Kheel Center for the Resolution of Environmental Interest Disputes. He has been a visiting professor at the Yale School of Forestry and Environmental Studies since 2001.

A report released last week by the environmental group Earthworks questions whether the staffing available at DEC will be adequate to handle the increased workload of enforcing the proposed fracking regulations. Indeed, the report questions whether cuts in staff have left DEC unable to competently enforce the current regulations applicable to existing oil and gas wells.

Earthworks' study reported that the number of oil and gas inspections decreased by more than 1,000 per year between 2001 and 2010, while the number of active oil and gas wells increased by approximately 1,000 over the same time period. According to the report, In 2002, DEC inspectors were conducting one inspection per 2.6 active wells. By 2010, they were only able to conduct one inspection per every 4 active wells. In other words, three out of four wells are go without inspection every year. The report also claims inspections are few and far between and assessed penalties are low.

DEC has claimed repeatedly that it will only issue as many fracking permits as it can enforce. If the Eartworks report is correct , DEC will first have to beef up its staff to handle already active oil and gas wells.

Many neighbors and clients in our region are concerned with the die-off of honey bees. On July 17, EPA released its decision to deny emergency suspension of Clothianidin, the pesticide accused of killing honey bees. The determination was in response to a petition filed on March 20, 2012, by beekeepers, honey producers and several environmental and consumer organizations.

The petition (available at regulations, doc no. EPA-HQ-OPP-2012-0334-0002) claimed that the use of the neonicotinoid class of pesticides, of which clothianidin is one, coincided with mass die-offs of honey bee populations in the U.S. as the result of Colony Collapse Disorder. It reported that 90% of flowering plants require pollinators to reproduce and in agriculture, nearly a third of pollination is performed by honey bees. Pollination by bees is claimed to be needed for one-third of the American diet.

According to the petition, the neonicotinoids are used primarily as a seed treatment for corn, which is the largest single use of arable land in North America. The petition reported that except for a tiny fraction of organically produced corn, almost all of corn seed planted in America is coated with neonicotinoids, primarily Clothianidin and a related compound.

Beginning in the last decade, populations of honey bees have fallen precipitously. Colony Collapse Disorder was first documented in the U.S. in 2004. The petition reported that each winter since then, approximately one-third of the U.S. honey bee population has died off or disappeared. The first reported honey bee losses occurred immediately upon the widespread use of Clothianidin following its conditional registration by EPA in 2003. The petition claims that there is clear scientific evidence linking neonicotinoids to colony collapse.

In its letter of denial of suspension for imminent hazard (available at regulations, doc no.EPA-HQ-OPP-2012-0334-0006) , EPA announced it would now take public comment for 60 days on the petition’s request for cancellation of Clothianidin. However, EPA stated that at this time it does not believe the pesticide has caused or will cause significant reduction in populations of domestic bees, a significant decrease in honey production, serious effects on other agricultural systems as a result of decreases in pollination services or a reduction in pollination of wild plants in a way that may alter ecosystems.

The "leak" to the New York Times a month ago has left us guessing where New York is going with fracking. On June 13, the Times reported that the administration was pursuing a plan to limit hydraulic fracturing to counties along the border with Pennsylvania and to permit it only in communities that "express support" for fracking. Since the draft regulations had only provided for "consultation" by DEC with the municipalities permits are proposed, the possible change in the administration's position suggests they are considering following the Middlefield and Dryden decisions discussed in the previous post.

The proposal would limit hydrofracking to the deepest areas of Marcellus shale in the state, allegedly to provide a greater separation distance between the fracking and the shallower groundwater deposits used for drinking water. This rationale would conveniently limit fracking to the southern tier of the state, where reportedly about thirty towns have passed resolutions or taken other action to show their willingness to have fracking come to town. Under the proposal, fracking would be allowed "primarily" in Broome, Chemung, Chenango, Steuben and Tioga counties, and only where the town has shown support.

Although recognition of the right of municipalities to reject fracking is a positive step, an air of politics surrounds the proposal. A blog in the Huff Post Green claims that the proposal is an example of politics trumping science. Not only did the Environmental Working Group uncover DEC's practice of sending proposed regulations to industry representatives weeks in advance of releasing them to the public, but the dialogue that ensued between the agency and the industry clearly went beyond the cost impacts the agency must explore. One must wonder what role the industry is playing in shaping the new program while those of us not representing industry wait for the proposal.

The two court decisions upholding the right of municipalities to zone out high presssure, high volume hydrofracturing for natural gas, known as "fracking", have been appealed to the Appellate Division for the Third Department. The two appeals will most likely be heard together this winter and a decision issued by spring.

The Appellate Division decision will be pivotal. If the Appellate Division affirms the lower courts, an appeal to the Court of Appeals is not automatic. The industry and property owners would have to request leave of the Court to hear the appeal. Whether the Court of Appeals would take the case is difficult to assess. The lower court decisions relied heavily on Court of Appeals precedent in parallel mining cases. The Court could decide to let the lower court interpretation stand or it could create a new rule for natural gas drilling. If the Court hears the cases, we would probably not have a final decision until early 2014.

In the meantime, the rulings of the Middlefield and Dryden cases stand. New York State has not preempted a municipality's land use authority to decide where, if at all, fracking will be allowed. The state has also not preempted local jurisdiction over local roads or the right of local governments to tax fracking facilities under the Real Property Tax Law. Section 23-0303 of the Environmental Conservation Law does preempt local regulation of fracking operations, such as technical standards and operating procedures. In the words of these decisions, the state may determine "how" fracking will occur, but local governments may determine "where" it will occur.