Evidence of Loss Based Upon Interference with Property Owner’s Ability to Extract Gas by Hydrofracking Disallowed as Speculative
The Third Department affirmed Supreme Court’s determination that respondents’ expert would not be allowed to testify at trial in this condemnation proceeding. Petitioner brought the condemnation proceedings to obtain perpetual easements for underground gas storage in the “Oriskany Sand” beneath the surface of the land owned by the respondents. The respondents hired a geologist to testify that the easement will interfere with any future attempts to extract gas by hydrofracking and sought compensation for the claimed lost gas-development rights. The Third Department wrote:
The extent to which a condemnation limits a claimant’s property rights is determined by the language used in the appropriation and the underlying purpose of the taking, and “[t]he quantum of the title to be taken will not be extended by implication”….Here, petitioner’s easement explicitly reserves to respondents “the right to grant oil, gas and other mineral rights to others in formations other than the Oriskany Sand” and limits that reservation of rights only by precluding respondents from “grant[ing] or convey[ing] gas storage rights” (emphasis added) that interfere with petitioner’s easement. * * *
If …hydrofracking in the Marcellus formation does eventually prove to pose an unacceptable risk to petitioner’s storage space – a claim that petitioner does not now make – it may choose at that time to undertake appropriate measures to acquire whatever additional rights may prove to be necessary, and, of course, to compensate the affected landowners appropriately. As petitioner has not yet made any such acquisition, the court properly precluded respondents from presenting evidence on their claims relative to development rights in the Marcellus formation. Matter of Central N.Y. Oil & Gas Co., L.L.C. (LaDue), 515347, 3rd Dept, 6-13-13