Energy Company's Suit Seeks to Force Decision on Hyfrofracking

, New York Law Journal

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A Norse Energy USA drilling rig
A Norse Energy USA drilling rig in Madison County in 2009.

ALBANY - An energy company that was forced into bankruptcy has sued the Cuomo administration to end what it calls an "inherently unreasonable" delay in deciding whether "hydrofracking," should be allowed on a high-volume basis in New York.

The Norse Energy USA action in Albany Supreme Court seeks to compel the state to make a decision on the process, hydraulic fracturing, which has effectively been on hold for 5½ years in New York as the state studies its safety.

The suit, Wallach v. New York State Department of Environmental Conservation, 6770-2013, names Gov. Andrew Cuomo, state Environmental Conservation Commissioner Joseph Martens and Health Commissioner Dr. Nirav Shah as defendants.

It alleges that the state's delay in authorizing or banning hydrofracking is in violation of state mining laws and statutes governing the environmental review process.

"The respondents conduct and pattern of persistent delay created a regulatory environment that forced Norse to file for bankruptcy and left other operators with no viable business options but to surrender their leases and flee the state in pursuit of development opportunities in other states that are contributing to the energy revolution that is ongoing in the United States today," the complaint alleges.

The suit also claims that Shah is by law not an "involved" party authorized to play a role in the formal evaluation of hydrofracking.

"The Department of Health commissioner does not act on well permit applications," said Thomas West of the West Law Firm in Albany, Norse Energy's attorney.

The Buffalo-based Norse Energy USA is an American subsidy of a Norwegian energy company. It filed for bankruptcy protection in late 2012 and ceased operations earlier this year. Its suit claims that delays by the state in deciding whether to allow fracking wrecked the value of its assets.

Norse Energy still holds oil and gas lease rights to about 130,000 acres of land in New York, most of them situated atop the natural gas-rich Marcellus Shale geographical formation along the Southern Tier region of the state west of Binghamton.

The action was brought on behalf of Mark Wallach, a partner at Penney, Mayer & Wallach in Buffalo, in his capacity as bankruptcy trustee of Norse Energy USA.

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