CITIZEN POWER ALLIANCE

New York's de facto moratorium on horizontal natural gas drilling has led landowners to challenge several force majeure claims, but a bill that would ban all hydraulic fracturing until mid-May could bolster the companies' legal argument, some attorneys said.

The current moratorium, which was issued in an executive order by Gov. David Paterson in July 2008 as the state Department of Environmental Conservation reviews its policies, still allows companies to drill horizontally as long as the company develops a satisfactory, site-specific Environmental Impact Statement outlining regulations and procedures that would be used during the drilling process.

The moratorium bill, which was passed by the state Senate last month, would put all hydrofracking on hold and may be easier to argue under force majeure.

"If that legislation passes and the governor signs the bill, I think that gives the gas companies a much better argument," said Robert Wedlake, an attorney representing several area landowners and coalitions. "Right now, there is no law and there is nothing in writing that says you can't get a permit for a Marcellus horizontal well. If Chesapeake were to submit an application with a site-specific Environmental Impact Statement conducted by scientists and engineers, it's conceivable that the DEC would give them a permit to hydrofrack a horizontal well."

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