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Recent Hydraulic Fracturing Developments in New Jersey and New York

On June 25, 2012, the New Jersey Senate passed bill A-575 by a vote of 30-5 that would prevent hydraulic fracturing waste from entering New Jersey.  While New Jersey does not have the large pockets of natural gas found in neighboring Pennsylvania, no rules or laws have been enacted in New Jersey regarding the acceptance of by-products from the natural gas drilling process commonly referred to as hydraulic fracturing or “fracking.”  The bill was previously approved by the Assembly and is now awaiting Governor Christie’s review.

The main fear of proponents of the legislation is that significant waste from large scale fracking operations in Pennsylvania and beyond would end up in landfills, treatments plants, and other facilities in New Jersey, further encumbering the State, which is already overburdened with thousands of polluted sites, with additional environmental issues.  The New Jersey Department of Environmental Protection has said that very little fracking waste currently comes into New Jersey and that regulations are in place that would ensure the safe handling of any such waste.  Currently, Pennsylvania fracking operations send some drill cuttings and waste water to nearby states, including New York.  Opponents of the bill appear to have a two-fold argument: (1) the ban would only rob companies that treat industrial waste of business opportunities; and (2) the ban would likely not have a major effect since most drilling companies prefer to recycle waste on-site.

It is unclear whether the legislation will be signed into law.  At a town hall event in Mahwah, New Jersey on June 27, Governor Christie indicated that he has yet to review the bill.  The Governor indicated that he would confer with environmental and business groups before deciding whether or not to sign the proposed legislation.

In New York, natural gas drilling has been the subject of an ongoing moratorium.  However, the current administration, headed by Governor Andrew Cuomo, is in a political quagmire and appears to be considering a plan to allow fracking in portions of several economically struggling New York counties that border Pennsylvania.

The crux of this dispute is between two diverse groups in Upstate New York.  On one hand, property owners above the Marcellus Shale formation in New York reside in somewhat economically depressed regions that want to be able to reap the economic benefits of fracking similar to their Pennsylvania neighbors.  On the other hand, environmental groups are fighting to maintain the environmental health of their communities, which they claim will be significantly adversely impacted by fracking.

Currently, more than 100 New York towns, villages, and hamlets have passed bans on fracking in anticipation of the statewide moratorium being lifted in the near future.  In at least two instances, the Supreme Court of New York in Tompkins and Otsego Counties have upheld zoning amendments that effectively banned hydraulic fracturing and gas drilling activities in the Towns of Dryden and Middlefield, respectively (Anschutz Exploration Corp. v. Town of Dryden, 2011-0902, New York Civil Supreme Court, Tompkins County; Cooperstown Holstein Corp. v. Town of Middlefield, 2011-0930, New York Civil Supreme Court, Otsego County).  It appears that both decisions have been appealed.

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