"* Anschutz Exploration files suit against town of Dryden
* Unincorporated town amended zoning to bar gas drilling
* State department has recommended end to NY drilling ban
By Dan Wiessner
ALBANY, NY, Sept 19 (Reuters) - A lawsuit challenging a small town's ban on natural-gas drilling could have implications throughout New York state, where officials are poised to approve a controversial drilling method known as fracking.
Privately held Anschutz Exploration Corp filed suit on Friday against Dryden, a rural suburb of Ithaca with about 13,000 residents that last month amended its zoning laws to bar all gas drilling within its unincorporated borders.
New York's Department of Environmental Conservation has recommended ending a year-long ban on drilling in New York, although a public comment period on the rules was extended this month following concerns that fracking contaminates underground wells and aquifers.
The Anschutz suit, which asks the state Supreme Court in Tompkins County to invalidate the amendment, is the first to test the legal implications of the state's move.
Fracking, or hydraulic fracturing, involves cracking open rocks deep underground with a blast of sand, water and chemicals to unleash natural gas and oil.