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Ohio Utica Shale

New York drilling company sues over local moratorium

By Bob Downing Published: November 29, 2012

From the Associated Press:

By MARY ESCH

Associated Press

A natural gas drilling company is suing state regulators and a western New York town where it has operated for decades over a local moratorium that threatens to put the company out of business.

Papers were served this week in a lawsuit against the Livingston County town of Avon and the state Department of Environmental Conservation, said John Holko, owner of Lenape Resources, a small natural gas company based in Alexander, 35 miles southwest of Rochester. Holko is seeking at least $50 million in damages from the town, claiming its recent ban on gas drilling and storage has cost Lenape millions of dollars in lost business and unused mineral rights.

"I’ve drilled over 100 wells in this county," Holko said. "I have 100 miles of pipeline, compressor stations and a disposal well. I supply gas to farmers, industrial users and interstate commerce. Now, because three guys on a town board decide they don’t want me here anymore, I’m out of business. There’s something dramatically wrong with that."

Holko said the town’s gas-drilling moratorium and similar ones passed by dozens of other upstate New York towns violate a 1981 law giving the state Department of Environmental Conservation sole authority to regulate oil and gas development. He’s also suing DEC, saying it’s required to take action against the local bans.

Local courts have upheld drilling bans in the towns of Middlefield and Dryden. Both cases are under appeal with arguments before the state Appellate Division expected in February. Lenape’s suit is the first that also names DEC.

"This issue is before the courts and we will let that process progress," DEC spokeswoman Emily DeSantis said Thursday in response to a question about the Lenape lawsuit.

Avon Town Supervisor David LeFeber said Thursday that he could not comment on pending litigation.

DEC has had a moratorium on gas wells using horizontal drilling and high-volume hydraulic fracturing since it began an environmental impact review in 2008. The technology frees gas by injecting a well with millions of gallons of chemically treated water at high pressure to crack rock deep underground. Environmental groups say it could contaminate air and drinking water supplies or cause other harm, but drillers and DEC say state regulations and standard industry safeguards protect against harm from drilling and fracking.

A deadline for finalizing new regulations expired on Thursday, but DEC sought a 90-day extension to allow a health impact study to be completed. Revised regulations will be released for public comment within that 90-day period.

Lenape’s wells, drilled in sandstone deposits, aren’t subject to the state’s moratorium because they’re vertically drilled and use low-volume fracking rather than the newer technologies necessary for shale gas development.

Michael Joy, a Pittsburgh lawyer representing Lenape, said papers filed with the lawsuit demonstrate that Avon officials weren’t acting to prevent a problem caused by gas drilling, but were bowing to political pressure from anti-drilling groups.

Local control over gas drilling has also been an issue in other states in the Marcellus Shale region, which includes southern New York, Pennsylvania, Ohio and West Virginia. The gas industry says local laws create a patchwork of regulation that thwarts development.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.