Bill S4045A-2013

Establishes the natural gas exploration and extraction liability act of 2014

Establishes the natural gas exploration and extraction liability act of 2014.

Details

Actions

  • Jan 24, 2014: PRINT NUMBER 4045A
  • Jan 24, 2014: AMEND (T) AND RECOMMIT TO ENVIRONMENTAL CONSERVATION
  • Jan 8, 2014: REFERRED TO ENVIRONMENTAL CONSERVATION
  • Mar 6, 2013: REFERRED TO ENVIRONMENTAL CONSERVATION

Memo

BILL NUMBER:S4045A

TITLE OF BILL: An act to amend the environmental conservation law, in relation to the natural gas exploration and extraction liability act of 2014

SUMMARY OF PROVISIONS:

Section 1 Title of act.

Section 2 states legislative findings.

Section 3 Amendments to Article 23 of the Environmental Conservation Law Section 23-2901. Definitions.

Section 23-2903. Strict liability.

Section 23-2905. Joint and several liability.

Section 23-2902 Standing of Municipal Corporations.

Section 23-2909 Elements of Damages; Treble Damages.

Section 23-2911 Attorney Fees.

Section 4 Effective Date

JUSTIFICATION:

Although individuals, businesses and municipalities can, under existing law, recover damages from drillers and landowners who have allowed drilling on their property, it would be necessary for such plaintiffs so prove that negligent conduct caused the damage. This bill will allow recovery once a causal connection between the drilling and related activity and the damage has been proven. This "strict liability" is found throughout the law, most relevantly in the Navigation Law regarding damages that result from petroleum spills.

Additionally, to remove any doubt that municipalities have standing to pursue claims for damages resulting from the exploration, drilling and extraction or natural gas, including high volume hydraulic fracturing, ("hydro fracturing" or "racking") Section 23-2904 explicitly establishes such standing.

Numerous hazards have been associated with this type of industrial activity. Chemicals used in frackihg may be toxic, cause life-threatening illnesses, including cancer, and can be non-biodegradable and difficult or impossible to remove once they enter the natural environment.

Construction of large well pads (up to five acres),the use of millions of gallons of water and large numbers cf trucks delivering fracking chemicals, water, and other equipment to the site can lead to excessive noise, air pollution, deterioration of roads and bridges, contaminated groundwater, including private and public water supplies, vibrating of surrounding structures, fires, explosions and, in some cases, earthquakes. Open pits of chemically-laced water, laden with

salt, heavy metals and radioactive elements have been known to kill wildlife and farm animals that have mistakenly drunk from them, and upon evaporation, contribute to air pollution. Leaks and spills of flecking chemicals from the trucks and waste pits have also been reported, causing contamination of surface waters. There is a possibility that the fracking chemicals that remain underground may migrate or seep through fractures in the underground formations, cracks in the well-bore casing, and through abandoned wells to pollute groundwater.

Any of these hazards could result in irreparable and costly damage to a landowner's drinking water, home or livelihood in agriculture or tourism, as well as to roads and bridges maintained by municipalities.

FISCAL IMPLICATIONS:

None to the state.

EFFECTIVE DATE:

Ninetieth day after it becomes law


Text

STATE OF NEW YORK ________________________________________________________________________ 4045--A 2013-2014 Regular Sessions IN SENATE March 6, 2013 ___________
Introduced by Sen. KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Environmental Conservation -- recommitted to the Committee on Environmental Conservation in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the environmental conservation law, in relation to the natural gas exploration and extraction liability act of 2014 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Short title. This act shall be known and may be cited as the natural gas exploration and extraction liability act of 2014. S 2. Legislative findings. 1. The legislature finds that the process used to stimulate natural gas extraction referred to as high volume hydraulic fracturing, also known as "hydro fracturing" and "fracking," utilizes components that are often toxic, that are non-biodegradable, and that are virtually impossible to remove once they enter the natural environment. Among the chemicals used are volatile organic compounds such as benzene, toluene, ethyl benzene, and xylene. Many of the chemi- cals used in this process are federally listed hazardous substances, and there is only minimal data about the rest. Many of these hazardous chem- icals are known carcinogens and others can cause other life threatening illnesses. As a result of the air and water pollution caused by such exploration and extraction operations people are exposed to endocrine disrupting agents that can cause kidney, liver, heart, blood, and brain damage. 2. High volume hydraulic fracturing requires the construction of large well pads (up to five acres) to support the large number of trucks delivering the fracking chemicals, water trucks, pump trucks and other equipment. Such massive scale industrial activity causes excessive noise, disturbs underground water formations, vibrates surrounding
structures, and can result in earthquakes. Millions of gallons of this chemically-laced water returns to the surface laden with salt, heavy metals and radioactive elements. This wastewater is often stored in open pits until transported for ultimate disposal. Wildlife and farm animals that have mistaken these pits for freshwater ponds have been killed. Chemicals may evaporate from these pits, contributing to air pollution. Leaks and spills of fracking chemicals from the trucks and waste pits cause contamination of surface waters. The remainder of the fracking fluid remains underground with the possibility of migrating or seeping through fractures in the underground formations, cracks in the well-bore casing, and through abandoned wells to pollute groundwater. 3. Widespread use of high volume hydraulic fracturing diminishes or destroys the natural beauty of the land, depletes or interferes with the natural sources of water used for domestic and agricultural purposes, disrupts the natural habitat of wildlife, imposes unaffordable costs on municipalities and reduces property values thereby harming both homeown- ers and the municipalities in which such activities are located. 4. Tourism is a major industry for much of the Marcellus Shale area. The construction and operation of natural gas wells in such area will have a long term negative effect upon such industry that will result in lost profits and diminished business value and lost revenue to the muni- cipalities where such tourism ventures are located. 5. The natural gas industry has embarked upon the procurement in unprecedented numbers of mineral leases from private landowners across a broad section of New York state that overlays the "Marcellus Shale" geological structure for the purpose of utilizing high volume hydraulic fracturing to extract and mine natural gas from the shale. It is not unusual for 40% or more of the land in such areas to be currently under lease (although such land is owned by a small minority of landowners in the region) and, accordingly, the industry is poised to secure billions of dollars in profits from such extraction while potentially causing an even greater amount of damage to non-participating land owners and renters, as well as to municipalities and even visitors to the area. 6. The legislature further finds that the use of high volume hydraulic fracturing techniques constitutes a hazardous practice that will result in large scale damages to innocent parties. 7. The legislature further finds that landowners who, subsequent to the effective date of this act, enter into or extend leases with natural gas exploration, operation, transportation or extraction entities share responsibility with such entities for all damages shown to be caused by such activities and that all responsible parties be held strictly liable for damages resulting from such activities. S 3. Article 23 of the environmental conservation law is amended by adding a new title 29 to read as follows: TITLE 29 NATURAL GAS EXPLORATION AND EXTRACTION LIABILITY SECTION 23-2901. DEFINITIONS. 23-2903. STRICT LIABILITY. 23-2905. JOINT AND SEVERAL LIABILITY. 23-2907. STANDING OF MUNICIPAL CORPORATIONS. 23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES. 23-2911. ATTORNEY FEES. S 23-2901. DEFINITIONS. AS USED IN THIS TITLE, UNLESS THE CONTEXT OTHERWISE REQUIRES: 1. "HIGH VOLUME HYDRAULIC FRACTURING" SHALL MEAN THE USE OF CHEMICALS, WATER AND OTHER SUBSTANCES INJECTED OR PUMPED INTO A NATURAL GAS WELL TO
STIMULATE PRODUCTION OF THE WELL IN VOLUMES IN EXCESS OF ONE HUNDRED THOUSAND GALLONS IN A CONTINUOUS TWENTY-FOUR HOUR PERIOD OR IN EXCESS OF TWO HUNDRED FIFTY THOUSAND GALLONS IN ANY CONSECUTIVE THIRTY DAY PERIOD. 2. "PERSON" SHALL MEAN ANY INDIVIDUAL, ASSOCIATION, CORPORATION OR OTHER ENTITY THAT ENGAGES IN NATURAL GAS EXPLORATION, DRILLING, EXTRACTION OR TRANSPORTATION. THE TERM "PERSON" SHALL INCLUDE ANY INDI- VIDUAL, ASSOCIATION, CORPORATION OR OTHER ENTITY THAT OWNS AN INTEREST IN LAND THAT IS SUBJECT TO A LEASE OR OTHER GRANT THAT PERMITS SURFACE RIGHTS, SUB-SURFACE RIGHTS OR BOTH SURFACE AND SUB-SURFACE RIGHTS FOR THE PURPOSE OF NATURAL GAS EXPLORATION, DRILLING, OPERATION OR EXTRACTION UNLESS SAID LEASE OR GRANT WAS EXECUTED PRIOR TO THE EFFEC- TIVE DATE OF THIS TITLE. S 23-2903. STRICT LIABILITY. NATURAL GAS EXPLORATION, DRILLING, EXTRACTION BY USE OF HIGH VOLUME HYDRAULIC FRACTURING TECHNIQUES AND TRANSPORTATION OF HYDROFRACTURING CHEMICALS AND WASTE PRODUCTS, HAVING BEEN DEEMED HAZARDOUS ACTIVITIES BY THE LEGISLATURE, ENTAIL STRICT LIABILITY ON THE PART OF ANY PERSON, AS DEFINED IN THIS TITLE, THAT UNDERTAKES SUCH ACTIVITIES IN THE STATE. NEITHER COMPLIANCE WITH THE REQUIREMENTS OF THIS TITLE, THE ISSUANCE OF A PERMIT FOR SUCH ACTIVITIES NOR THE EXERCISES OF DUE CARE, SHALL EXCUSE ANY SUCH PERSON FROM LIABILITY FOR PERSONAL, PROPERTY OR OTHER ELEMENTS OF DAMAGE PURSUANT TO THIS TITLE DETERMINED TO BE CAUSED BY SUCH HAZARD- OUS ACTIVITIES. DISTINCTIONS BETWEEN DIRECT AND CONSEQUENTIAL DAMAGE SHALL NOT RELIEVE SUCH PERSON OF ABSOLUTE LIABILITY, SUCH PERSON'S INTENT OR NEGLIGENCE FOR ANY PERSONAL, PROPERTY OR OTHER ELEMENT OF DAMAGE PURSUANT TO THIS TITLE NOTWITHSTANDING. S 23-2905. JOINT AND SEVERAL LIABILITY. THE LIABILITY OF ANY PERSON AS DEFINED IN THIS TITLE SHALL BE JOINT AND SEVERAL WITH THE LIABILITY OF ALL OTHER PERSONS FOUND LIABLE FOR DAMAGES RESULTING FROM THE SAME INCIDENT, EVENT, NATURAL GAS OPERATION, EXPLORATION OR EXTRACTION OR TRANSPORTATION ACTIVITY. S 23-2907. STANDING OF MUNICIPAL CORPORATIONS. FOR THE PURPOSES OF THIS TITLE, ALL MUNICIPAL CORPORATIONS, INCLUDING SCHOOL DISTRICTS, SHALL HAVE STANDING TO PURSUE ALL LEGAL REMEDIES FOR DAMAGES PURSUANT TO THIS TITLE. S 23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES. 1. IN ALL ACTIONS ARISING FROM THE PROVISIONS OF THIS TITLE, EVIDENCE TENDING TO PROVE THE FOLLOWING ELEMENTS OF DAMAGES SHALL BE ADMISSIBLE: A. PERSONAL INJURY AND WRONGFUL DEATH; B. PROPERTY DAMAGE; C. REDUCTION IN PROPERTY VALUE; D. REDUCTION IN BUSINESS VALUE, LOSS OF PROFITS; E. ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES; AND F. IN THE CASE OF MUNICIPAL CORPORATIONS: (1) DAMAGE TO AND MAINTENANCE OF INFRASTRUCTURE; (2) LOSS OF REVENUE DUE TO REAL PROPERTY TAX REDUCTIONS RESULTING FROM SUCH EXPLORATION, DRILLING, EXTRACTION AND TRANSPORTATION ACTIVITIES; (3) COSTS INCURRED BY EMERGENCY OPERATIONS NECESSITATED BY SUCH ACTIV- ITIES; AND (4) ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES. 2. IN ANY ACTION ARISING PURSUANT TO THIS TITLE, IF THE TRIER OF FACT DETERMINES THAT ANY DEFENDANT ACTED WILLFULLY, MALICIOUSLY OR WITH GROSS NEGLIGENCE, THE COURT SHALL AWARD THREE TIMES THE AMOUNT OF DAMAGES ESTABLISHED BY THE TRIER OF FACT. S 23-2911. ATTORNEY FEES.
IN ANY ACTION ARISING PURSUANT TO THIS TITLE, A PLAINTIFF WHO HAS BEEN AWARDED DAMAGES SHALL ALSO RECOVER REASONABLE ATTORNEY FEES AND EXPENSES OF LITIGATION FROM THE DEFENDANTS, JOINTLY AND SEVERALLY. S 4. This act shall take effect on the ninetieth day after it shall have become a law.

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