Backers of natural gas drilling and environmental advocates wrangled Thursday over whether New York's towns have the legal right to ban oil and gas development in a fight that could ultimately be decided by the state's highest court.

A four-judge appellate panel heard arguments over the local bans in Dryden and Middlefield, two central New York towns among dozens in the state that have passed zoning laws prohibiting drilling. Opponents argue state rules supersede such local restrictions.

The Dryden law is being challenged by drilling company Norse Energy and the Middlefield ban by a dairy farmer who said the town's action prevents her from making money from gas wells that had been planned for her land.

The cases are being closely watched by other towns across the state as a test of their constitutional right of "home rule." They're also of keen interest to the industry, which has claimed it can't operate profitably in a state with a patchwork of local regulation that may shift with each town board election.