senate Bill S4045A

Establishes the natural gas exploration and extraction liability act of 2014

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 06 / Mar / 2013
    • REFERRED TO ENVIRONMENTAL CONSERVATION
  • 08 / Jan / 2014
    • REFERRED TO ENVIRONMENTAL CONSERVATION
  • 24 / Jan / 2014
    • AMEND (T) AND RECOMMIT TO ENVIRONMENTAL CONSERVATION
  • 24 / Jan / 2014
    • PRINT NUMBER 4045A

Summary

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

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Bill Details

See Assembly Version of this Bill:
A846A
Versions:
S4045
S4045A
Legislative Cycle:
2013-2014
Current Committee:
Senate Environmental Conservation
Law Section:
Environmental Conservation Law
Laws Affected:
Add Art 23 Title 29 ยงยง23-2901 - 23-2911, En Con L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S893, A2108
2009-2010: S7377, A9414

Sponsor 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

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4045--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01228-02-4

S. 4045--A                          2

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

S. 4045--A                          3

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.

S. 4045--A                          4

  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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