Written by Chloe Marie – Research Specialist
Last November, national attention was focused on Colorado as voters
considered, and ultimately rejected Proposition 112, which would have imposed
rigorous set-back requirements upon oil and gas operations within the state.
Since that time, while not getting as much attention as Proposition 112, a
number of legal and regulatory developments have occurred within Colorado.
These developments have attempted to address, or have been initiated due to
concerns over, the impacts of oil and gas activities in the state. This article
will provide a brief overview of some of these recent developments within
Colorado. This article will not address Senate Bill 19-181, which was
introduced into the Colorado Senate on March 1, 2019, and would make extensive
changes to Colorado’s oil and gas regulations. If this bill advances through
the legislative process, we will address its provisions in a future Shale Law
in the Spotlight article.
The Colorado Supreme Court declines to impose further
rulemaking responsibilities upon the Colorado Oil & Gas Conservation
Commission (COGCC)
Colorado Oil & Gas Conservation Commission v.
Martinez
In November 2013, some youth activists urged the Colorado Oil and Gas Conservation
Commission (COGC) to promulgate a rule aimed at suspending the issuance of
permits for activities using hydraulic fracturing. The activists requested that
the Commission “not issue any permits for the drilling of a well for oil and
gas unless the best available science demonstrates, and an independent, third
party organization confirms, that drilling can occur in a manner that does not
cumulatively, with other actions, impair Colorado’s atmosphere, water,
wildlife, and land resources, does not adversely impact human health and does
not contribute to climate change.”
After analysis, however, in May 2014, the Commission denied the request to engage in rulemaking,
holding that it did not have the jurisdiction to enact some of the proposed
rule, as this would mean that the Commission would have to “readjust the
balance” between the development of oil and gas resources and protection of
Colorado public health, safety, and welfare. According to the Commission,
conducting such a rebalance would conflict with the language of the Colorado
Oil and Gas Conservation Act. The Commission also noted that most of the
concerns behind this proposed rulemaking are currently being addressed in
cooperation with the Colorado Department of Health and Environment.
Petitioners challenged the Commission’s decision before the Denver
District Court; however, the court upheld the Commission’s decision. The youth
activists then appealed the District Court’s judgment to the Colorado Court of
Appeals.
In a published opinion issued on March 23, 2017, the Court of Appeals agreed with the
activists, holding that “the language of the [Oil and Gas Conservation] Act does not create a balancing test weighing safety
and public health interests against development of oil and gas resources, but
rather, the Act indicates that fostering balanced, nonwasteful development is
in the public interest when that development is completed subject to the
protection of public health, safety, and welfare, including protection of the
environment and wildlife resources.” Therefore, the Court of Appeals reversed
the lower court decision and remanded the case for further proceedings.
The Commission filed a Petition for Writ of Certiorari with the Colorado
Supreme Court on May 18, 2017, seeking review of the Court of Appeal’s
decision. On January 29, 2018, the Colorado Supreme Court agreed to consider
whether the Commission properly interpreted the Act language as a ground for
denying petitioners’ proposed rulemaking.
On January 14, 2019, the Colorado Supreme Court granted the Commission’s
Petition for Writ of Certiorari and quashed the decision of the Colorado Court
of Appeals agreeing that the Commission properly refused to initiate
petitioners’ proposed rulemaking. In its opinion, the
Supreme Court emphasized that the rulemaking authority of the Commission did
not encompass a right to condition all new oil and gas development on a finding
of no cumulative adverse impacts to public health and the environment. The court
explained that “[r]ather, the [Act’s] provisions make clear that the Commission is required
(1) to foster the development of oil and gas resources, protecting and
enforcing the rights of owners and producers, and (2) in doing so, to prevent
and mitigate significant adverse environmental impacts to the extent necessary
to protect public health, safety, and welfare, but only after taking into
consideration cost-effectiveness and technical feasibility.”
Quickly thereafter, the youth activists filed a motion
on January 24, 2019, to vacate the Supreme Court’s order. On January 28, 2019, however,
the Colorado Supreme Court denied their motion.
The town of
Superior, Colorado, approves ordinance prohibiting any future oil and gas
development project for a period of 6 months
On January 14, 2019, the town of Superior,
Colorado, passed an ordinance placing a 6-month moratorium on future oil and
gas exploration and production projects in the vicinity of the town. This
ordinance followed after Highlands Natural Resources Plc – made a decision in November 2018 to withdraw all of its recent
spacing and permit applications in relation to the company’s West Denver
project for the drilling of wells under the Rocky Flats and Standley Lake.
The Rocky Flats is a former nuclear weapons
production facility shut down in the 1980s due to concerns over radioactive
contamination. The authorities declared the Rocky Flats to be a Superfund
Cleanup Site in 1989 and proceeded to convert portions of the site into a
National Wildlife Refuge.
In light of this proposal to drill under the
Rocky Flats, residents of Superior expressed concerns over the potential for
contamination of surrounding areas via plutonium, which has been previously buried
within the former plant site. In addition, residents worried that such
development would negatively impact nearby residential districts and impair the
water quality of the Standley Lake, which represents a significant drinking
water supply for Superior and surrounding towns.
As a result of these concerns, the Superior
Board of Trustees considered whether local land use regulations relating to oil
and gas activities were sufficient to protect the public health, safety and
welfare of the town’s residents. In this regard, the Board of Trustees enacted
an ordinance, the purpose of which was impose a moratorium to “maintain the status quo and to provide time for the
Town Manager, Town Attorney and staff to study applicable law and regulations,
a permitting procedure, the appropriate zoning and land use regulation for such
uses, and to recommend adoption of regulatory standards and conditions to be
imposed on such operations.”
The town of Erie,
Colorado, extends existing moratorium on oil and gas development projects for a
6-month period, waiting for potential new oil and gas legislation
On January 22, 2019, the town of Erie, Colorado,
approved an emergency ordinance that extended an
existing moratorium on oil and gas development projects that was set to expire
on February 20, 2019. This new moratorium will be in effect until August 13,
2019. The Erie Board of Trustees initially established the moratorium in July
2018 pending an investigation of regulatory practices associated with oil and
gas developments used in other cities and towns across the state. The Board of
Trustees has explained that the extension of the moratorium will be beneficial
as the 2019 session of the Colorado General Assembly is expected to consider
new oil and gas legislation “and that legislation may broaden municipal
authority over oil and gas development.”
References:
This material is based upon work supported by the National Agricultural Library, Agricultural Research Service, U.S. Department of Agriculture.
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