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Posted at: 07/09/2012 10:54 PM   By: Associated Press |

In the latest salvo in local battles over gas drilling, a company said Monday it's shutting down wells and turning off the free gas to landowners in a western New York town that passed a moratorium on drilling.

Local sentiment for or against gas drilling has taken on greater significance in New York since the Cuomo administration said the state Department of Environmental Conservation will consider local ordinances when it starts granting permits for shale drilling and hydraulic fracturing. The agency hasn't issued new permits since it started an environmental review in 2008; the review and new regulations are expected to be completed by the end of summer.

The New York Times quoted unnamed state officials last month as saying that Gov. Andrew Cuomo is likely to allow shale drilling only in towns that have proclaimed their support, in the five counties near the Pennsylvania state line where gas is considered to be most plentiful.

The town of Avon, 20 miles southwest of Rochester, passed a one-year moratorium on gas drilling and hydraulic fracturing on June 28. Lenape Resources has more than 5,000 acres under lease and 16 wells in production in the town. None used the horizontal drilling and high-volume hydraulic fracturing that would be covered by regulations now under development.

The company sent a letter over the weekend to landowners saying Lenape was shutting down its wells in Avon and that royalty checks and free gas provided under leases would cease. The company said the action was required under the town's moratorium and listed the town supervisor's home phone and street address for any questions.

Town Supervisor David LeFeber said Lenape's shutdown wasn't required by the moratorium.

"We were very careful to word our moratorium to protect existing gas wells," LeFeber said Monday. "This is only a moratorium, it's not a ban. We wanted to take some time to study the issue and put in place any things that would help make sure we protect the health, safety and well-being of our local residents."

Lenape also has a lot of acreage under lease in the nearby town of Caledonia, where town officials are considering a similar moratorium, said attorney Michael Joy, who represents Lenape. John Holko, owner of Lenape Resources, is lobbying against the moratorium in Caledonia and other towns.

"The town (Avon) has put a grandfathering provision in for existing wells, but the town knows full well that the terms of the provision cause Lenape to operate at a loss," Joy said. "They don't understand the need to bring new wells into production."

More than 100 communities have enacted similar moratoriums or bans. Dozens of others have passed resolutions stating support for gas drilling.

"Certainly John Holko's company has been aggressively trying to stop moratoriums not only in Avon but in other towns where it has land under lease," Joy said. "They just weathered through four years of DEC not allowing them to drill cost-effective wells. Now they have the town telling them they can't drill here. Lenape doesn't know where its future operations are going to stand."

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