ALBANY, N.Y., Nov 4 (Reuters) - As New York inches closer
to approving the controversial gas-drilling method known as
hydro-fracking, environmental groups and some state lawmakers
are pushing for legislative changes to traditional tort
litigation to assist property owners seeking damages if their
water or soil is contaminated.
State lawmakers are mulling two proposals that would give
property owners more options and, perhaps, an upper hand in
court, including shifting the burden of proof from landowners
to gas companies and creating an industry-supported remediation
"The way things are structured right now, the only recourse
a landowner has is to sue," said Deborah Goldberg, an attorney
with Earthjustice, a non-profit environmental law firm. "And
every time there is pollution, the industry claims it's not
Gas drilling is already common in upstate New York, but a
protracted debate over whether to permit fracking, which
involves blasting millions of gallons of water and chemicals
into wells at high pressure, has brought renewed scrutiny to
the industry. Opponents point to the potential for spills to
contaminate land surrounding gas wells, and concerns that the
intensive industrial process could trigger the migration of
natural gases into private water supplies.
But many environmental law experts and industry attorneys
say new legislation is unnecessary, and that a combination of
proposed drilling regulations and what they say is the
industry's clean record will keep accidents to a minimum. Even
when accidents occur, they add, the current legal remedies
available to landowners are sufficient.
"This whole debate is about what types of risks people are
willing to take in order to have low-cost energy and a higher
standard of living," said Karen Bulich Moreau, an Albany-area
attorney and the president of the Land and Liberty Foundation,
a non-profit that advocates against government intrusion on
individuals' land-use rights.
"We are a society that depends on certain industrial
activities to maintain our quality of life, and there are
certainly going to be risks associated, but that's what courts
are for," said Moreau, who favors fracking because of the
potential economic boon for depressed rural communities.
BURDEN OF PROOF
Some upstate towns aren't waiting for a legislative fix.
Residents of Horseheads, a town of about 20,000 in Chemung
County, filed a $150 million federal lawsuit last March against
Anschutz Exploration Corporation, which operates two gas wells
near the town, after the Department of Environmental
Conservation investigated complaints about water contamination
The DEC issued a memo that said many of the wells were
contaminated long before drilling began, but the plaintiffs
sought to hold the company strictly liable because, they said,
gas drilling is an "ultra-hazardous" activity.
"The risk of (gas drilling) outweighs any associated
value," the complaint read.
The plaintiffs also alleged Anschutz was reckless and
negligent in causing water contamination.
Anschutz called the suit an "extortion" scheme riddled with
factual errors, and said the DEC investigation largely
vindicated the company.
The Chemung suit, which is pending in the Western District
of New York, is the first in the state in which property owners
have sued a drilling company for negligence, according to
Napoli Bern Ripka, the law firm representing the plaintiffs.
But it is the suit's strict-liability claim, and its
shifting of the burden of proof, that challenges bedrock
principles of tort litigation.
When drilling accidents occur, the owners of the
contaminated land can bring claims against drilling companies.
But in New York, as in most other states, the plaintiff carries
the burden of proving not only that the company caused the
pollution, but that it did so through negligence. The time and
expense required to mount such a claim and see it through the
appeals process can be prohibitive to many homeowners.
A bill that stalled in both houses of the legislature this
year would impose strict liability on gas companies,
essentially stripping away the requirement that plaintiffs
prove negligence. But that proposal, industry attorneys said,
may be untenable because gas companies could be held
responsible when natural phenomena trigger the migration of gas
into water supplies.
"Strict liability is not appropriate when you have
pre-existing contamination in some of these wells," said Tom
West, whose Albany law firm represents oil and gas companies.
Adding to the complication, natural methane occurs at
shallower than normal depths in the state's gas-rich Southern
Tier, which covers large swaths of western New York, including
Chemung County. As a result, private water supplies are
particularly prone to contamination not caused by industry.
Moreau, the president of the Land and Liberty Foundation,
said contamination caused by industry is normally
distinguishable from that caused by nature because of the
presence of traces of "fracking fluid," or chemicals blasted
into wells to help release gas.
"If there were a legitimate case where contamination had
occurred, a trained expert could easily identify the source,"
Another proposal before the legislature is aimed at keeping
some cases out of court altogether by creating an
industry-supported fund to cover remediation costs when
contamination occurs. The measure, which would also increase
the amount of the bonds a drilling company is required to post,
was first proposed by Comptroller Tom DiNapoli and sponsored in
the Assembly this year by Bob Sweeney, a Long Island Democrat
and head of the Assembly's Environmental Committee.
West, the industry attorney, said he believes the fund was
designed by fracking opponents to make New York uncompetitive
with neighboring Pennsylvania and other states. It's also
unnecessary, he said, because contamination is rare and when
there is an accident, it's in the company's best interest to
clean it up quickly.
But Goldberg, the Earthjustice attorney, said contamination
is far more common than the industry likes to admit. A recent
report by the Denver Post found that in Colorado, there are
seven oil and gas spills every five days.
"I would hardly call that a freak occurrence," Goldberg
FIRST PERMITS BY SPRING
Lawmakers won't take up the liability question until
January at the earliest, when the legislature reconvenes in
But Steven Russo, general counsel for the DEC, said the
issue is "almost academic" because of a proposed regulation
that would require gas companies to pay for water-quality tests
prior to and during drilling.
"If the well was clean before, and now there's gas in it,
there's a clear cause and effect," Russo said last month at a
hearing on fracking in Albany.
The proposed regulation would also require four additional
water-quality tests in the first year after a well is drilled.
Both state officials and industry attorneys say New York's
regulatory scheme for fracking will be the most robust in the
nation. The state has proposed banning drilling on state-owned
land and in the New York City and Syracuse watersheds, as well
as mandated setbacks -- within 500 feet of private water
supplies and 2,000 feet of public reservoirs -- that, if
adopted, would be the largest in the country.
In August, the DEC released a draft report declaring
fracking to be safe, as long as the industry is strictly
regulated. A public comment period on the report, as well as a
set of proposed regulations, runs until Dec. 12.
State officials have said if fracking is officially
sanctioned, the DEC could begin issuing drilling permits as
early as next spring, but DEC Commissioner Joe Martens said
last month that it could take the agency longer to sift through
the thousands of comments.
(Reporting by Dan Wiessner)
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