## Facts

- Norse Energy Corp. USA held oil and gas leases in the Town of Dryden; its Chapter 7 trustee, Mark S. Wallach, challenged Dryden’s zoning amendment.
- In August 2011, Dryden amended its zoning ordinance to prohibit all activities related to the exploration for, and the production or storage of, natural gas and petroleum, effectively banning drilling and high-volume hydraulic fracturing within the town.
- A separate, consolidated appeal involved a similar zoning amendment by the Town of Middlefield prohibiting oil and gas exploration and production as land uses.
- The challengers argued the zoning bans were preempted by the Oil, Gas and Solution Mining Law (OGSML), Environmental Conservation Law (ECL) article 23.
- The dispute centered on ECL § 23-0303(2), which supersedes “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,” while preserving local authority over roads and certain taxation matters.
- The towns argued the ordinances did not regulate industry operations; they exercised traditional zoning authority to determine permissible land uses.

## Issues

1. Whether ECL § 23-0303(2) preempts municipal zoning ordinances that prohibit oil and gas exploration, extraction, and storage (including hydrofracking) as land uses.
2. Whether a local law that excludes an industry from a municipality through zoning “relat[es] to the regulation” of that industry within the meaning of the OGSML supersession clause.

## Decision

- The Court of Appeals affirmed the judgments upholding the zoning amendments.
- The court held municipalities may prohibit oil and gas production activities, including hydrofracking, through zoning, because the OGSML supersession clause does not eliminate municipal land-use authority.
- The court interpreted the supersession clause to target local laws that regulate operational details of oil and gas development, not zoning determinations about where industrial activities may occur.
- The court concluded any impact on oil and gas development from a zoning ban is incidental to land-use regulation and does not convert the ordinance into operational regulation preempted by the OGSML.
- The court limited its holding to use-based zoning exclusions and did not decide whether municipalities may impose technical or operational requirements on drilling activities.

## Legal Principles

- Statutory preemption of municipal zoning authority requires a clear legislative expression of intent; absent such clarity, traditional local land-use power remains.
- A supersession clause preempting local laws “relating to the regulation” of an industry is construed to preempt local operational regulation (methods, procedures, technical standards), not general zoning that defines permissible land uses.
- Municipal zoning may lawfully exclude particular industrial activities to preserve community character and protect health, safety, and welfare, even if the exclusion substantially affects an industry.
- Express statutory preservation of certain local powers (such as roads and taxation) does not, by itself, transform zoning into “regulation” of an industry for preemption purposes.

## Conclusion

The Court of Appeals held that New York’s OGSML supersession clause does not preempt municipal zoning ordinances that ban oil and gas development, including hydrofracking, as land uses, because such ordinances regulate land use rather than the operational details of the oil and gas industry.


Wallach v. Town of Dryden, 23 N.Y.3d 728 (N.Y. 2014)