New York fracking spends a decade in regulatory limbo
In December 2024, New York Governor Kathy Hochul signed legislation further expanding the State’s fracking ban to prohibit carbon dioxide extraction methods. This is just the latest in a series of regulatory “whack-a-mole” moves designed to prevent resource extraction altogether and keep clean natural gas “in the ground,” as opponents openly admit.
The entire timeline of these regulatory actions reveals just how restrictive New York’s approach has become. Starting in 2008, the New York imposed a series of extended de facto moratoriums on hydraulic fracking. In 2014, after an absurd seven-year review by the State Department of Environmental Conservation, Governor Andrew Cuomo issued an executive order banning high-volume hydraulic fracturing. That executive prohibition wasn’t permanently codified into law until the FY 2021 budget—nearly 13 years after the State first began blocking natural gas development. While previously a “gray area,” this later codification also imposed a moratorium on propane gel fracking, pending completion of yet another study on its environmental and health effects. More than a decade later, that study hasn’t even begun, and there’s no statutory timeline requiring it to start, let alone finish.
When Southern Tier Solutions, a Texas-based company, recently proposed using CO2 recapture technology to access New York’s vast Utica and Marcellus Shale formations, the State’s response was swift: ban that, too.
The CO2 ban is just the latest move in New York’s shell game of regulatory prohibition. The pattern is unmistakable. New York isn’t regulating natural resource extraction—it’s prohibiting it, one technology at a time, while using regulatory limbo to avoid calling it what it is. In doing so, the State is violating the constitutional rights of property owners, shutting down potential operators, and forcing consumers to pay some of the nation’s highest energy prices.
A decade of regulatory paralysis
The 2014 ban targeted hydraulic fracturing, but it also imposed a moratorium on propane gel fracking. The 2021 law required that “the department completes an analysis of the potential impacts of gelled propane fracturing and makes the analysis publicly available,” examining only environmental and health impacts. Notably absent is any consideration of economic factors or the property rights at stake. Over 10 years later, that study remains unstated, leaving property owners in indefinite regulatory limbo.
Propane gel fracking represents a fundamentally different technology than hydraulic fracturing. Instead of using millions of gallons of water and sand, the process uses gelled propane that can be recovered and reused. The propane returns to a gaseous state after extraction, leaving no wastewater to dispose of and avoiding many of the environmental concerns associated with water-based methods. The technology exists, operators are ready to invest, and the economic opportunity is tangible.
While this method isn’t completely banned currently, New York previously has shown a tendency to rush and shut down new and innovative technology. In 2024, when a Texas-based company proposed using captured carbon dioxide to extract natural gas from New York’s shale formations, the State didn’t reassess its decade-old moratorium on alternative fracking methods. Instead, legislators rushed to ban CO2 fracking entirely. The message to innovators is clear: Don’t bother developing new technologies for New York. We’ll just ban those too.
This isn’t merely a cautionary approach to new technology; it’s prohibition by paralysis. A moratorium without a timeline is effectively a ban, just one that avoids the political and constitutional accountability that comes with an outright prohibition. Property owners can’t plan, oil and gas operators won’t invest, and an entire industry capable of creating jobs and lowering energy costs sits frozen while the State pretends to deliberate.
The constitutional problem: Regulatory takings
Modern takings law, established in cases like Pennsylvania Coal v. Mahon, recognizes a fundamental principle: The government cannot make it commercially impracticable to use property without compensating the owner. As the Supreme Court explained over a century ago, making it impossible to mine coal “has very nearly the same effect for constitutional purposes as appropriating or destroying it.”
Mineral rights are property rights. They have no economically viable use other than extraction. When New York bans hydraulic fracking, prohibits CO2 fracking, and leaves propane gel fracking in perpetual regulatory limbo, it eliminates every practical method for property owners to make productive use of their mineral estates in the Utica and Marcellus Shale formations. This amounts to a total taking of property rights under the Fifth Amendment.
Property owners across New York’s Southern Tier sit atop some of the richest natural gas deposits in North America—the same formations that drive Pennsylvania’s energy economy. But while Pennsylvania landowners can lease their mineral rights and participate in energy development, New York landowners are forbidden from doing so. The State has effectively seized their property without any sort of compensation.
New York can’t avoid its constitutional obligation by regulating mineral rights out of existence rather than formally condemning them through eminent domain. The Fifth Amendment doesn’t contain a loophole for regulatory takings. Either New York must compensate property owners for appropriating their mineral estates, or it must allow them to make productive use of their property. The current approach operates as an effective prohibition on any viable extraction methods and violates the Constitution.
The price of prohibition
While New York property owners are barred from developing their resources, New York consumers pay the price. The state’s residential electricity costs average between 24 and 27 cents per kilowatt-hour—roughly 40 percent higher than the national average. Natural gas prices are similarly inflated, running 22.8 percent above the national average.
The irony is inescapable: New York bans fracking within its borders while importing more than 80 percent of its energy from other states, primarily Pennsylvania. The state self-righteously prohibits natural gas extraction at home, then purchases fracked natural gas from its neighbors to keep the lights on.
The economic consequences fall hardest on the Southern Tier, where communities watch Pennsylvanians across the state line prosper from resource development while they remain mired in economic stagnation. Property owners sit on valuable mineral estates they cannot access. Local governments miss out on tax revenue that could fund schools and infrastructure. The State sacrifices an entire region’s economic future on the altar of environmental ideology.
Meanwhile, the supposed environmental benefits are nonexistent. New York’s natural gas needs don’t disappear because the State bans extraction at home. They’re simply met by imported natural gas instead—largely from neighboring Pennsylvania. All New York accomplishes is sending jobs, tax revenue, and economic opportunity out of state, while importing the very energy its policies pretend to oppose.
A constitutional path forward
The expansion of New York’s fracking restrictions reveals a deliberate strategy. When hydraulic fracking became viable, the State banned it. When a company proposed CO2 fracking as an alternative, the State banned that too. Propane gel fracking remains frozen in a “study” that shows no signs of ever materializing. And environmental advocates are already calling for propane gel to be banned outright, making it clear that no extraction technology will ever satisfy opponents of resource development.
New York has two constitutional options. One: It can condemn mineral estates through eminent domain and compensate property owners for the value of their resources, as the Fifth Amendment requires. That would be a harmful policy—artificially limiting energy supply and increasing costs to consumers—but it would at least be constitutional.
The second (and real) solution is straightforward: New York should recognize that property owners have the right to make productive use of their land and mineral estates and embrace energy abundance.
Pacific Legal Foundation’s Environment and Natural Resources practice group is actively seeking mineral rights owners in New York who want to challenge these unconstitutional restrictions. If you own mineral rights in New York and have been denied the ability to make productive use of your property, we want to hear from you.
It’s time to hold New York accountable for its decade-long assault on property rights, and the regulatory limbo it’s forcing on energy producers.
