Gas driller sues DEC, town over local moratorium

Nov 30, 2012

Credit Lenape Resources

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. Hudson Valley Bureau Chief Dave Lucas reports.

John Holko, owner of Lenape  Resources, says papers were served this week in a 50 Million dollar lawsuit against the town of Avon. He says the town's gas-drilling moratorium and others like it violate a law giving the state Department of Environmental Conservation sole authority to regulate oil and gas development. He argues the ban has cost his company millions of dollars in lost business and unused mineral rights.

Holko fears that although the moratorium is set for a one-year term, Town attorneys have told him it could continue indefientely.  Holko believes the moratoriums are aimed at the prohibition of the development of natural gas and oil as a resource - when asked if he thought the bans came about as a reaction to anti-hydrofracking sentiment, Holko says 99 per cent of the wells he has already drilled are "hydraulically fractured" - low-volume style.

Holko is also suing the DEC, saying it's required to take action against the local bans. DEC has had a moratorium on gas wells using horizontal drilling and high-volume hydraulic fracturing since it began its environmental impact review in 2008. A deadline for finalizing new regulations expired Thursday, but DEC asked for a 90-day extension to allow a health impact study to be completed and additional comments to be chronicled.

Local courts have upheld drilling bans in the towns of Dryden and Middlefield- those cases are under appeal with arguments before the state Appellate Division expected in February.

The town of Avon sits outside of any Marcellus Shale drilling hot spots. Town Supervisor David LeFeber did not return calls for comment - attempts to reach town council members in time for broadcast were unsuccessful. John Holko is biding his time until he and the town meet in court in January.

DEC spokeswoman Emily DeSantis responded to a request for comment by email, stating "This issue is before the courts and we will let that process progress."