Daniel B. Markind, Esq.
Weir and Partners, LLP
Recent decisions raise the big question: will energy policy be determined by law or by fiat? For New York and propane gel fracking it’s fiat, of course.
Following a string of politically expedient, scientifically questionable and legally obtuse rulings by state and federal agencies, the Colorado Supreme Court delivered a dose of sanity and reality last week. It ruled that local governments cannot ban or declare a moratoria on hydraulic fracturing in Colorado when state law approves of the practice. Writing for a unanimous Court, Justice Richard Gabriel wrote “(i)n matters of statewide or mixed concern…state laws supersede any conflicting government regulations.” Energy policy in Colorado was thus determined by interpretation of law but, increasingly, it is being determined by fiat.
The Colorado decision struck down a fracking ban in Longmont and a moratorium in Fort Collins, as well as other communities. It was simple common sense, but stands in contrast to that of the New York Court of Appeals, which held in the 2014 Dryden and Middlefield cases that local communities did have the right to ban the practice. The tension always has been where the authority of local zoning and land use law ends? Can it be utilized, in effect, to overrule state law that permits an industry to operate? In New York, the State’s highest court ruled that the locality does have such a right. In Colorado it does not.
The same tension is being played out at the federal level. On Thursday, the Environmental Protection Agency issued new methane standards aimed at reducing emissions in 2025 by up to 45% from the 2012 levels. The new regulations will not affect most of the currently-existing rigs, well pads and auxiliary equipment. However, the agency made clear it intends to regulate them also.
The EPA methane regulations were first proposed last year, and since that time have been expanded significantly. For example, they now will cover more low-producing wells than those originally proposed and will require more annual inspections than previously published.
As with the Colorado Supreme Court decision, the push for new federal regulations turns on one key question. That question likely is to be decided only by the United States Supreme Court, and probably in the current litigation over recent EPA coal regulations. The question is how far does the authority of an unelected administrative agency extend? Can it, as in the case of coal, make continuing to do business in a legal industry so onerous as to be practically impossible? Can it, as in the case of methane, add large costs to an industry that was decreasing emissions by itself? While few doubt the overall goal expressed in either set of regulations – clean air and water – do we have now government by unelected fiat?
One state where that issue will be particularly acute is New York. Following Governor Andrew Cuomo’s fracking ban for horizontal shale wells, the State Department of Environmental Conservation begins to realize that it has only opened up the issue, not closed it. On Friday, the DEC asked for more information about possibly fracking wells in the Southern Tier of the State using propane and sand rather than water.
The proposal by Tioga Partners LLC is to frack wells in Tioga County on a hay and corn farm using propane and sand instead of water to cause the micro-fractures of the shale. This propane gel would be recaptured as a gas when it rises back to the surface. The process would bypass the 2014 State ban.
In response to Tioga Partners’ permit application, the DEC followed the traditional New York State playbook – it issued a notice of incomplete application, the DEC asked for more information of things like truck traffic and prepared a notice that the process would be a potential contributor of greenhouse gas emissions. Obviously, the same could be said of nearly all industrial processes (including any process to move energy produced by “renewable” sources, if those processes really can be invented).
As New York’s ban was based on politics rather than science, it will need to keep finding political reasons to deny new processes. At some point, the illogic will stretch too far, and the absurdity will overwhelm the political expediency. Let’s hope there will not be too much damage to our environment, economy and national security before that happens.