The Court of Appeals in Albany ruled in two separate cases that municipalities can use zoning laws to ban hydraulic fracturing within their borders.
New York hosts a part of the Marcellus shale formations, one of the premier shale gas basins in the United States. There's a current state moratorium on hydraulic fracturing.
Karen Moreau, executive director of the New York State Petroleum Council, said that, because municipal boards can change every two years, the regulatory landscape in the state will keep energy investors at bay.
"There are real losses here, and it's a real tragedy for thousands of farmers and people in rural communities that would have realized the economic benefits that oil and gas development can deliver," she said in a statement.
Kate Sinding, an advocacy director for the Natural Resources Defense Council, said the court's ruling is indicative of the growing concern over shale drilling practices.
"This sends a message to all the oil and gas drillers anxiously eying our borders -- the people of New York will not be steamrolled," she said in a statement.