Hydrofracking

Avon and Caledonia back down on gas moratoriums

The Avon and Caledonia town boards appear to be heeding a visitor who spoke at the towns’ public hearings on enacting hydrofracking moratoriums.

John Holko of Lenape Resources is the operator of 15 active gas wells in Avon and 56 active wells in Caledonia. Because of concerns raised by Holko, the proposed moratoriums are being discarded in their existing form and will be rewritten, Avon Supervisor David LeFeber and Caledonia Supervisor Dan Pangrazio have confirmed.

“We are taking a look at that, to grandfather what he [Holko] is currently doing,” Pangrazio advised.

Caledonia is in the process of changing the language of the original moratorium. It will require that the town re-start the approval process with another review by the Livingston County Planning Board and another Caledonia town board public hearing.

“We are going to have to start all over again,” Pangrazio said.

Pangrazio advised that the new version of a moratorium, accommodating existing gas operations, might be ready for approval by April.

“We’re starting from scratch too,” reported Avon Town Supervisor David Lefeber, noting that the approval process involves not only the county planning board and another public hearing, but also review by the Monroe County Planning Board, because of Monroe’s proximity with Avon.

“Looking at the risk factor for the town, we can’t afford to do anything procedurally wrong,” LeFeber added. “The last thing we would want to do is damage Mr. Holko’s business.”

LeFeber noted that the Town of Avon is a Lenape customer, using Lenape gas at the Highway Garage, and that a number of Avon residents heat their homes and cook with Lenape gas.

Avon, which has two meetings per month versus Caledonia’s one, may get its rewritten version of the moratorium ready by March.

In a Monday interview, Holko told The County News that the original moratorium proposed in Avon “would have shut down all my operations in the town.”

Holko acknowledged that the revision, “tries to get away from the concept of shutting down all operations and rather focuses on high volume horizontal wells.”

Holko elaborated that the original moratorium “would not have allowed you to do anything related to the extraction of natural gas.” Literally interpreted, the moratorium, “would shut down everything. You couldn’t even burn natural gas in your house, which I’m sure wasn’t the intent,” Holko said.

Livonia and Conesus have already adopted this language.

“There may be a review to see if this stuff is real,” Holko speculated.

Holko advises that the local community does have a role in the regulation of natural gas development and permitting as defined in NYS DEC’s Supplemental Generic Environmental Impact Statement (SGEIS), specifically the highway use plan, planning prior to permitting, the emergency management plan, and modifications.

“That’s already a strong role in the process. You can’t get a permit without discussing it with the town. What other role does the town want to have?” Holko asks.

At the hearing, Holko questioned the Avon Town Board as to how much money they were planning to spend and what process was going to be used to review gas development regulation beyond what DEC has already done.

Holko additionally advised that the language of the original moratorium confuses mineral law with oil and gas law.

Holko had used Freedom of Information to find out how much research Avon had done on hydraulic fracturing before proposing the moratorium, and learned that such research was minimal or nonexistent.

“Most towns are taking this [moratorium] document that somebody supplied and passing it on to the others,” he believes. “It shows up everywhere. Still, you’d think — even with some towns sharing the same attorney — that these would at least reflect some of the nuances among the towns.”

Things to be considered, which might or might not be relevant to particular towns, include production versus no production, presence of gas pipelines, and salt storage wells.

Holko describes the document now in circulation as a “feel good moratorium” which nevertheless might bring liability upon towns adopting it.

He contends that the damages to his company in Avon, if the original language were adopted, “would be substantial” because he both produces and sells gas there, and provides free gas to some landowners. Damages in Caledonia, with even more wells, would be proportionally greater.

Holko is in possession of the revised language proposed for Avon, which would immunize his operations from the moratorium.

Still, he finds the document unacceptable because he does not accept the concept of a moratorium in any form. The “one year, or at the discretion of the board” duration has potential for extension indefinitely, he pointed out.

“Why are you enacting this if you’re not going to do anything?” he asks, emphasizing that, under law, towns cannot regulate gas development. (See below)

Holko suggests that towns might be better off — from the perspective of liability and legislative economy — to simply resolve a declaration that they are opposed to hydraulic fracturing.

“I think the towns are trying to make a statement, but at the same time they don’t realize the role they are suppose to be playing in the SGEIS process. That’s scary because it means nobody representing the town even read the document,” Holko suspects.

Believing this, Holko has supplied copies of the SGEIS to Avon and Caledonia, highlighting the parts relevant to their involvement, and supplying a summary for each of 11 chapter contents.

Holko also appeared at last week’s fracking moratorium public hearing in Geneseo with the same message. He does not have wells or pipes in Geneseo, but does hold leases.

State vs. town jurisdiction

Holko presented a six-page memorandum authored by ReedSmith counsel Michael P. Joy at the Avon and Caledonia hearings. Citing a 1982 court decision that a Town of Kianton attempt to regulate natural gas development was contrary to law, Joy makes the case that regulation of natural gas operations in New York State is entirely outside the jurisdiction of town governments and entirely in the realm of NYS DEC.

The court did acknowledge that “unique and local concerns” may exist, but felt such concerns can be addressed by allowing towns to request after-the-fact compensation for damages and DEC to impose financial security requirements.

If Avon or Caledonia were to adopt a moratorium law which would injure Lenape operations in the towns, or cause operations to cease altogether, Joy warns that the town might be subject to damage claims from both Lenape and its own residents, whose opportunity to realize income from the lease of gas development rights would be impaired.