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The People Win Over Shell in Fracking Water Withdrawal Case

Just south of the Finger Lakes region in New York's Steuben County is a valley where three waterways meet to form a fourth. In the 18th century, this confluence of rivers (the Cohocton, the Tioga, the Canisteo and the Chemung) was marked with a wooden post.

According to the description of one explorer, the post's elaborately carved surfaces featured 28 figures painted in red that depicted captured enemies and 30 headless figures that depicted, well, dead guys.

The Cohocton, one of four rivers that meet in Painted Post, New York. Photo credit: Rachel Treichler

Art with a warning label.

The Village of Painted Post (pop. 1,842) now occupies that legendary spot. And, given the news that broke on the last day of 2015—a small band of citizens defeated the plans of fossil fuel behemoth Shell Oil—it might be time to carve a new post.

In a unanimous New Year's Eve ruling, the Appellate Division, Fourth Department, in Rochester ruled against the Painted Post water withdrawal project. That project, which supported hydraulic fracturing in Pennsylvania, sold up to one million gallons per day of municipal water from the drinking water aquifer that underlies this quartet of rivers to a Shell Oil subsidiary (SWEPI LP) for use in drilling and fracking operations in Tioga County, Pennsylvania.

Represented by Shell attorneys at every stage, the Village of Painted Post had classified the water, which was transported across the border by rail, as “surplus property" in an attempt to avoid an environmental review of impacts. Those sales are now halted via injunction.

In a case brought by People for a Healthy Environment—along with the Coalition to Protect New York, Sierra Club and five local residents—petitioners claimed the combined impacts of the project had not been considered, as is required under New York's State Environmental Quality Review Act (SEQRA). The appellate court ultimately upheld their argument.

Frank Potter, current acting People for a Healthy Environment president, noted that the water-filling station and the water-filled rail cars that rattled through the village late at night had created additional impacts that needed to be considered together with the impact of the water withdrawals. The court agreed.

Co-petitioners John Marvin and Mike Finneran at the water-loading site in Painted Post, New York. Photo credit: Mary Finneran

“We are very pleased that the court acknowledged what is so obvious to us—that the Village did not follow procedures under SEQRA and that the people who live near the railroad tracks have legal standing in the courts," Potter said in a phone interview. “This water grab by Shell threatens our quality of life through multiple pathways, including noise and light pollution [from train traffic], and all of these impacts need to be considered together."

Attorney Rachel Treichler of Hammondsport, along with Buffalo attorney Richard Lippes, represented the petitioners, said she anticipates further involvement in the issue: “This ruling invalidates the current water sale agreement and issues an injunction against any further water sales until an environmental review is done. We assume the village will go back to the drawing board and do a new environmental review in compliance with SEQRA. My clients plan to be deeply involved in that new review process. If so, we will ask the Village to examine the environmental impact of water withdrawal not only on the local aquifer but also where the water is used to frack in Pennsylvania."

Indeed, Treichler almost seemed to relish the teachable moments that ongoing legal battles provide. “This is a great opportunity for us to present the facts to the public about how the Corning aquifer works," she said. "This is a highly stressed aquifer. Withdrawals in one place could potentially impact the quality of drinking water to people in seven municipalities."

This Painted Post water withdrawal case, first filed in 2012, has followed a winding path.

In the beginning, in trial court, the ruling favored the petitioners both on standing and on the merits of the case. But then, on appeal, Shell's lawyers once again challenged the legal standing of the petitioners and, on this technical point, prevailed. They argued that the petitioners were not being harmed in a way that was different from the general public, including petitioner John Marvin, who lived within 500 feet of the rail-loading facility. (Under New York State environmental law—but not under federal law—a petitioner must demonstrate special injury in order to have a right, a.k.a. “standing," to bring a case to court).

The appellate court agreed with Shell's attorneys, and the lawsuit was dismissed. The petitioners asked for a rehearing. They were denied. So, they took their case to the New York Court of Appeals—the highest court in the state, which agrees to hear only 7 percent of all cases brought before it.

In a huge break for the plaintiffs, the Court of Appeals agreed. And then it went on to overturn the decision of the appellate court on the issue of whether the special harm requirement for noise effects had been met, arguing that the appellate court had applied an “overly restrictive analysis."

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Suddenly, petitioner Marvin had standing once again. That reversal resurrected the case and bounced it back down to the appellate division to make a ruling on the merits. And, on Dec. 31, 2015, this is what it said:

First, the appellate court rejected the notion that the water being sold was “surplus property" not subjected to environmental review according to SEQRA protocols:

“On the merits, we agree with petitioners that the Village's determination that the Water Agreement was a Type II action and not subject to SEQRA review was arbitrary and capricious. First, we reject respondents' contention that the withdrawal and sale of surplus water from a municipal water supply is not an “action" for SEQRA purposes (see 6 NYCRR 617.2 [b] [1]). Second, we conclude that the Water Agreement constitutes either a Type I or an Unlisted action."

Second, it ruled that the review had to consider all the impacts combined:

“[S]egmentation, i.e., the division of environmental review for different sections or stages of a project (see 6 NYCRR 617.2 [ag]), is generally disfavored (see Matter of Forman v Trustees of State Univ. of N.Y., 303 AD2d 1019, 1019). We thus conclude that the court properly determined, on the merits of the first cause of action, that all of respondent Village's resolutions should be annulled and that a consolidated SEQRA review of both agreements was required."

(More details on the case can be found here).

So, what does this court victory mean for the rest of us?

At least three good things. First, here in New York State, it means that the highest court in the land has, in its ruling on standing, loosened the special harm requirement that is its basis. That more liberal framing may make it easier for New Yorkers to file suit in regards to other harmful fracking infrastructure projects.

In the Court of Appeals' own words:

“Standing is not to be denied simply because many people suffer the same injury….To deny standing to persons who are in fact injured simply because many others are also injured, would mean that the most injurious and widespread Government actions could be questioned by nobody. ... That result would effectively insulate the Village's actions from any review."

Second, by rejecting the notion that drinking water can be labeled it as “surplus property" and sold off for export, like so many extra snowplows—sans environmental review—the court shines a bright light on the whole issue of water rights.

In the words of Treichler, “This court decision affirms what is, in fact, already the law: that is, you have the right to use water, but you don't own water. Water is not a property right. Water is not a surplus property of the village."

What we do have here in the eastern U.S., said Treichler, are riparian rights, which is a system, based in common law, for sharing water among those who own land along the paths that water flows.

Unlike property rights, riparian rights are correlative. If there is not enough water for everyone—as when water levels fluctuate in times of drought—then everyone has to adjust accordingly. But if one entity claims to own a set amount of water that it is entitled to use in all circumstances, then, in times of drought, there is much less for everyone else—human users and ecosystems both.

“New York law, in my view, does not provide that," said Treichler, who is an authority in water law. “But industrial entities want to interpret it that way. There are various interests at work here."

The basic hydrology of upstate New York shows why claiming outright ownership of groundwater—and then selling it—is so reckless. For all the abundant rain that falls, New York's aquifers are not capacious—the underlying bedrock on the hillsides is too close to the surface and not sufficiently porous to hold much water—and the aquifers we do possess resemble squiggly underground skeins of yarn, not round, deep pools.

In other words, in times of drought, we don't have long-term storage of water in our aquifers and our aquifers are not geographically extensive.

The Corning aquifer that lies beneath Painted Post, is shaped like a spindly X chromosome, with its four branches lying directly beneath the four riverbed valleys. The rain falling on the surrounding hillsides is funneled into it.

In times of plentiful rainfall, the groundwater bubbles up into the rivers. (Indeed, 60 to 70 percent of the flow of New York's surface water originates from upwardly mobile groundwater). But when groundwater is pumped and sold for fracking—removed entirely from the hydrologic cycle—the amount of groundwater discharging into streams is sharply reduced.

Startlingly enough, groundwater pumping can sometimes be intense enough to reverse the direction of flow—as when the water floating along the sunlight surface of a stream is sucked right back down into ground to recharge the aquifer. This backwards movement not only causes streams and rivers to dry up but can also draw chemical contaminants into the aquifer.

This effect has already been observed in the Corning aquifer, which is a drinking water source for multiple municipalities, including the city of Corning, which is just downstream from Painted Post.

So that its residents can drink, wash dishes and take showers, the Village of Painted Post pumps 220,000 to 400,000 gallons of municipal water per day. Under the sale agreement to Shell, it provided up to one million gallons a day for Pennsylvania fracking operations. That's a 2- to 5-fold increase in the rate of groundwater pumping.

“Before climate change," Treichler noted, “New York had steady sources of water [because of predictable rain], but we don't have deep aquifers. Because there is a worldwide shortage of water, and because water can be exported and taken away from the aquifer, New York's aquifers can be easily depleted. Painted Post says, 'we are poor, we need the money, our citizens need help paying taxes.' But they are selling water that belongs to everyone. Rain falls into the whole area; it happens to come to them, and they say that it is theirs to sell."

Treichler points out that bulk water sales are not unique to Painted Post. Other New York municipalities (e.g. the Town of Erwin) are also selling water for out-of-state fracking operations—including to Shell. While the appellate ruling is not retroactive, the case does affirm that, going forward, municipalities must comply with SEQRA for such sales—and that requires an assessment of the cumulative impact of water withdrawals on the aquifer and all existing users.

And the third lesson from the Shell No! victory in Painted Post, New York? Surely, it's the power of unflinching citizen activism.

When the Corning Leader—a small-town daily that is a rare beacon of excellent journalism—first reported on water sales to Shell, a handful of alert citizens began attending village meetings. One was so outraged at what she heard, she decided to become a petitioner and wrote a guest editorial that caught the attention of still others. The League of Women Voters held a forum. A legal team was assembled.

And for years upon years, even when the case was dismissed in appellate court, even when the headlines read “Stop Painted Post Water Sales? It's Not Likely," no one gave up.

Let's carve those scenes on a wooden post and plant it near the place where four rivers meet.

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