American Oil and Gas Reporter - January 2018 - 18

IndustryDigest
owned stock in natural gas and energy
companies, and several of those
operated in the state. The attorneys
claimed those financial holdings created
a conflict of interest that violated the
plaintiffs' right to due process. Walker
later reported her husband had divested
his stock holdings in all companies
involved in producing oil, natural gas,
coal, wind or solar energy. r

Tennessee DEC Seeks
Regulatory Changes On
Tank Setbacks, Bonds
NASHVILLE, TN.-The Tennessee
Department of Environment and
Conservation is proposing to amend
state regulations on tank battery
setbacks and landowner well bonds, the
Tennessee Oil & Gas Association says.
According to TDEC, it wants to
change drilling permit provision Rule
0400-52-02.02. The amended rule
affects wells reverting back to
landowners who wish to use a well for
domestic gas use. Under the revision,
the required plugging bond jumps to
$1,500 from $500. The amendment
adds a sentence covering wells deeper
than 2,500 feet, setting the plugging
bond at $1 a foot for every foot deeper
than 2,500 feet. It adds that wells
reverting back to the landowner will not
require a reclamation bond.
TOGA points out the amendment
balances out for landowners with wells
shallower than 2,500 feet, as current
regulations mandate a $1,000
reclamation bond. The change hits
deeper wells hard, the association
suggests, calculating a 5,000-foot well
would require a $4,000 plugging bond-
$1,500 for the standard fee and an
additional $2,500 fee for the extra depth.
The changes to TDEC's regulations
on containment pits at tank batteries,
Rule 0400-54-01.05, lessen the
separation between tanks and state
highways or county roads from 100 to
50 feet.
The rules don't explicitly address
the grandfathering of tanks, but TOGA
says TDEC has indicated that status
will be granted in locations where
trucks can entirely pull off the road to
service the tanks.
The comment period for the
proposed regulations closed in
December. They are accessible at
http://tn.gov/environment/topic/ppo18 THE AMERICAN OIL & GAS REPORTER

water.
TOGA says following the comment
period, the proposed changes will
advance to the Board of Water Quality,
Oil and Gas to begin the rule-making
process. However, the association notes,
in August the board voted to decrease
the frequency of its meetings from once
a month to semiannually.
"Though the board may call a special
meeting to allow the department to move
forward on these regulatory changes, as
of now, the board is not scheduled to
meet until April 2018 in line with the
statute, which requires the semiannual
public comment meetings in April and
October of each year," TOGA reports.
r

New York Landowner
Files Federal Suit Over
State's Fracturing Ban
ROCHESTER, N.Y.-An upstate
New York landowner is suing a state
agency in federal court in his latest
attempt to access oil and gas resources
on his property, arguing the state's
fracturing prohibition violates the
takings and due process clauses of the
U.S. Constitution.
David Morabito, a Rochester, N.Y.
lawyer, filed his lawsuit on behalf of
himself and his wife, Colette, in the
U.S. District Court, Western District of
New York, against the New York
Department of Environmental
Conservation. It argues the agency
usurped his property rights in June 2015
when it prohibited high-volume
horizontal fracturing operations in the
state.
Morabito and his wife own property
in Monroe and Allegany counties. This
is his second lawsuit against the state;
Morabito sued in the summer of 2015,
arguing New York's fracturing ban
contradicted its years of study on the
stimulation technique (AOGR, August
2015, pg. 21).
According to the lawsuit, they could
not begin to secure a permit to conduct
high-volume fracturing activities on
their land because of state agencies'
"arbitrary or capricious actions." The
Morabitos filed their earlier lawsuit in
state courts arguing the prohibition
violated their rights under the New York
and U.S. constitutions. A state supreme
court justice and state appellate court

dismissed their petition, ruling they
didn't have standing to sue because they
never applied for a drilling permit.
In his latest filing, Morabito asserts
New York's actions in prohibiting highvolume fracturing are not based on
science, technology or conservation.
"Rather, the actions taken by the
defendants are based on speculation,
conjecture, misinterpretation of
extensive studies conducted by the
Department of Environmental
Conservation, other conservation
departments in other states, and even
the United States government," he says.
During the 25 years DEC has
analyzed, critiqued and deciphered
extensive studies of high-volume
fracturing, Morabito writes the agency
has established and promulgated
proposed rules and regulations that
protect the state's soil, water and air
quality. As evidenced in those studies
and its host of environmental impact
statements, New York has established
that high-volume fracturing is "a viable
and acceptable practice of retrieving
and extracting the enormous gas
reserves in Western New York and in
particular, the Southern Tier of New
York incorporating plaintiff(s)'
properties," he says.
Lifting the prohibition would have
positive economic impacts on the
plaintiff as well as for the entire
Southern Tier, Morabito says, adding
the New York Department of Health
admitted it had insufficient information
to make an intelligent decision before it
recommended the fracture ban.
The Independent Oil & Gas
Association of New York continues to
monitor Morabito's legal actions, and
supports the attorney's best intentions,
says Brad Gill, the association's
executive director.
"It is hard to prevail against the state
with a takings claim, as it has been tried
against the DEC in the past and always
without success," Gill notes. "That
being said, IOGA NY has offered to
support Morabito in any way possible,
but it regrets that it cannot assist him
financially. That support includes
association members being expert
witnesses, and sharing industry insights
with him. Despite skepticism of his
chances of winning, the association
applauds Morabito's efforts and, of
course, hopes he prevails, as it would be
a great victory for all of us here in New
York's natural gas industry." r
http://www.tn.gov/environment/topic/ppo-water http://www.tn.gov/environment/topic/ppo-water
American Oil and Gas Reporter - January 2018

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