A mid-level appeals court on Thursday said local governments in New York can ban hydraulic fracturing and shale-gas drilling within their borders, delivering a major blow to the natural-gas industry and landowners who had sought to have the bans overturned.

The state Appellate Division ruled unanimously in favor of the Tompkins County town of Dryden and the Otsego County town of Middlefield, both of which passed zoning laws that prohibit natural-gas drilling. The ruling upheld decisions last year from a lower court.

The so-called “home rule” issue has been a topic of contention among the gas industry and critics of fracking, a technique where water, sand and chemicals are injected deep underground to fracture shale and release natural gas.

Proponents of fracking contended New York law prohibits local bans because it defers all regulatory oversight of drilling to the state; Dryden and Middlefield argued the clause in state law doesn’t impede on their ability to use zoning laws as they see fit.

Since the appeals court ruled unanimously, Norse Energy and Middlefield farmer Jennifer Huntington—the plaintiffs in the two cases—would have to receive permission from the state Court of Appeals to appeal to the high court.