The Town of Delaware’s Town Board voted unanimously (with one member abstaining) at its June 20th regular meeting, to pass a resolution recognizing a landowner’s “… right to determine how they exercise and protect their mineral rights …” in accordance with the laws of New York State and the laws of the U.S. As reported by the Sullivan County Democrat in it’s June 22nd edition, the Town of Delaware, located in the western part of Sullivan County, had previously taken a neutral position with regard to natural gas development within the Town. Any drilling permits for natural gas development await the adoption of final regulations by the State’s Department of Environmental Conservation permitting such gas drilling activities. Those regulations will be considered for adoption once the environmental review process, commenced in 2008, is complete – which some speculate will occur by the end of 2012.
A number of other local New York municipalities have adopted provisions in their zoning laws which aim to prohibit any natural gas development activity anywhere in their jurisdictions. The laws of two such municipalities have been challenged and upheld by local county courts. Some legal observers believe that the analyses in those cases are not consistent with the state statute which appears to grant exclusive regulatory authority for natural gas development to the state, except for issues directly related to a municipality’s roads and otherwise applicable real property taxes. That issue will be finally decided by either the decision of a higher court – most likely New York’s highest court – the Court of Appeals, or by an act adopted by the State legislature which more clearly sets forth the regulatory authority as between the State and local municipalities.
It should be emphasized that the June 22nd resolution of the Delaware Town Board further provides that, if gas drilling comes to Delaware, “…those who are involved in the process of gas drilling and those who regulate the gas drilling process see to it that the entire process of gas drilling be made in a responsible and safe manner.” The Board’s resolution is one in a seemingly continuing series of observations by various entities and organizations apparently concluding that, provided it’s done safely and in a carefully regulated manner, gas leasing should proceed in New York. There are many other entities – including some local municipalities and various environmental groups – that have taken positions in total opposition to any natural gas drilling in the Marcellus Shale formation in New York – under any circumstances. Time – and experience – will tell.
We in the firm’s Natural Gas Working Group work with landowners who desire to preserve, protect and exercise their real property rights – including their mineral rights relevant to any natural gas activities – whether or not they choose to enter into a natural gas lease. If they do decide to enter into such a lease arrangement, we assist in negotiating for adequate provisions that provide protections and enforcement rights to preserve the current and future intended use of the property – not just for the period of drilling but for future generations as well.
Gerald A. Lennon is a partner on the Real Estate Team and is in charge of the firm’s Natural Gas Working Group. He can be reached by phone at 845-778-2121 toll free or 845-778-2121 and by email.