Released May 06, 2016 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Colorado's Oil & Gas Industry won two important victories May 2 when the state supreme court upheld rulings from lower courts that local efforts to prohibit or impose a moratorium on drilling using hydraulic fracturing were illegal.
The court handed down two separate decisions. In one, City of Longmont v. Colorado Oil and Gas Association, it ruled that Longmont's ban on hydraulic fracturing and storage and disposal of hydraulic fracturing wastes conflicts with state law, and is thus invalid and unenforceable. The citizens of Longmont, a city 50 miles north of Denver, approved a ban on hydraulic fracturing in 2012. Under state law, the Colorado Oil & Gas Conservation Commission (COGCC) (Denver, Colorado) is the agency with overall responsibility for regulating drilling in the state. An industry group, the Colorado Oil and Gas Association (COGA) (Denver), sued the city of Longmont.
In his May 2 opinion, Justice Richard Gabriel wrote, "Even were we to accept the argument that fracking is not the only way to produce oil, gas or other hydrocarbons, it appears undisputed that fracking is now standard for virtually all oil and gas wells in Colorado. Longmont's ban, if left in place, could ultimately lead to a patchwork of regulations that would inhibit the efficient development of oil and gas development." Left in place, Longmont's ban could encourage other municipalities to ban or delay drilling, "which could ultimately result in a de facto statewide ban," he wrote.
In ruling that state law preempted Longmont's ability to regulate drilling within its borders, Judge Gabriel noted, "the virtues and vices of fracking are hotly contested. Proponents tout the economic advantages of extracting previously inaccessible oil, gas and other hydrocarbons, while opponents warn of health risks and damage to the environment."
"We fully respect these competing views and do not question the sincerity and good faith beliefs of any of the parties now before us," his opinion continued. "This case, however, does not require us to weigh in on these differences of opinion, much less to try to resolve them. Rather, we must confront a far narrower, albeit no less significant, legal question, namely, whether the City of Longmont's bans on fracking and the storage and disposal of fracking waste within its city limits are preempted by state law."
Oil & Gas producers welcomed the court's decision on Longmont's ban while environmentalists slammed it. Although an important milestone, Judge Gabriel's decision may not be the last word on the subject, as at least five ballot initiatives to amend the state's constitution are gathering signatures. These measures seek to either restrict companies' ability to drill or expand the power of local governments to regulate drilling within their boundaries. The industry has vowed to fight those initiatives. Similar measures were fielded in 2014, but an 11th-Hour compromise brokered by Governor John Hickenlooper kept them off the ballot. For more on that, see August 7, 2014, article--Oil & Gas Industry Sees Brisk Business in Colorado after Withdrawal of Voter Initiatives.
Commenting on the court's decision in the Longmont case, Don Haley, COGA's president and chief executive, said, "COGA has always maintained that these bans and moratoriums on responsible oil and gas development are illegal, and we're pleased that ... the Supreme Court of Colorado has agreed with us. This is not just a win for the energy industry but for the people of Colorado who rely on affordable and dependable energy and a strong economy."
COGA's chairman, Brad Holly, an executive with Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas), added: "For COGA, and for the broader oil and natural gas industry, these lawsuits were an unfortunate, but necessary action, as it is imperative for our state's economy and its citizens that we strongly support the thousands of people we directly and indirectly employ, as well as their families, and the essential energy we responsibly provide. Our state and our business environment thrive when the oil and natural gas industry is allowed to operate and innovate."
Environmentalists saw Gabriel's decision very differently. The decision was "beyond comprehension," said Kaye Fissinger, president of a local group called Our Health, Our Future, Our Longmont. "The state has declared that fostering oil and gas development is in its interests. That the court apparently equates a government interest superior to human rights is a severe slap in the face. Our country's founding fathers are most certainly turning over in their graves."
Food & Water Watch, another group supporting Longmont, said the decision "strips all Coloradans of their Constitutional right to say no to fracking in their communities." U.S. Rep. Jared Polis, who helped organize the 2014 ballot initiatives, said of the decision: "It's a blow to democracy and local control. Now that the law has been interpreted, it's up to the state legislature or the people of Colorado to act to protect our neighborhoods and homes. I look forward to continuing to help advocates in these efforts to protect our communities."
Gabriel's decision recognized the rights of municipalities to use their zoning power to regulate some aspects of drilling, such as set-back provisions. But those measures cannot conflict with, or be more stringent than, the requirements adopted by the state through the COGCC.
The court decided a separate hydraulic fracturing case May 2, striking down a five-year moratorium on hydraulic fracturing enacted by Fort Collins. In a statement, the city said, "It is premature to comment until we have had a chance to review the Supreme Court's decision carefully and fully evaluate how it affects the City. These issues are complex, and we'll thoroughly examine the decisions relative to Fort Collins and Longmont. However, it is clear that the Supreme Court has found that the Fort Collins moratorium on hydraulic fracturing is in operational conflict with Colorado law and is therefore preempted."
In addition to Longmont and Fort Collins, other local governments had enacted bans or moratoria on drilling and hydraulic fracturing. The cities of Boulder, Broomfield and Lafayette, as well as Boulder County, enacted measures to limit or ban hydraulic fracturing in recent years. Following the court's decisions May 2, Broomfield's city attorney said he expects his lawsuit to be dismissed. Lafayette's ban was overturned in a legal action brought by COGA. Officials from the city and county of Boulder were said to be studying the May 2 rulings and assessing their options.
In a statement, the industry group COGA said the May 2 decisions "will have no direct impact on other states because each state has its own law of oil and gas, local government control and preemption. But the reasoning of the Court could have a substantial impact on other courts because so few cases have been decided on these issues nationally."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The court handed down two separate decisions. In one, City of Longmont v. Colorado Oil and Gas Association, it ruled that Longmont's ban on hydraulic fracturing and storage and disposal of hydraulic fracturing wastes conflicts with state law, and is thus invalid and unenforceable. The citizens of Longmont, a city 50 miles north of Denver, approved a ban on hydraulic fracturing in 2012. Under state law, the Colorado Oil & Gas Conservation Commission (COGCC) (Denver, Colorado) is the agency with overall responsibility for regulating drilling in the state. An industry group, the Colorado Oil and Gas Association (COGA) (Denver), sued the city of Longmont.
In his May 2 opinion, Justice Richard Gabriel wrote, "Even were we to accept the argument that fracking is not the only way to produce oil, gas or other hydrocarbons, it appears undisputed that fracking is now standard for virtually all oil and gas wells in Colorado. Longmont's ban, if left in place, could ultimately lead to a patchwork of regulations that would inhibit the efficient development of oil and gas development." Left in place, Longmont's ban could encourage other municipalities to ban or delay drilling, "which could ultimately result in a de facto statewide ban," he wrote.
In ruling that state law preempted Longmont's ability to regulate drilling within its borders, Judge Gabriel noted, "the virtues and vices of fracking are hotly contested. Proponents tout the economic advantages of extracting previously inaccessible oil, gas and other hydrocarbons, while opponents warn of health risks and damage to the environment."
"We fully respect these competing views and do not question the sincerity and good faith beliefs of any of the parties now before us," his opinion continued. "This case, however, does not require us to weigh in on these differences of opinion, much less to try to resolve them. Rather, we must confront a far narrower, albeit no less significant, legal question, namely, whether the City of Longmont's bans on fracking and the storage and disposal of fracking waste within its city limits are preempted by state law."
Oil & Gas producers welcomed the court's decision on Longmont's ban while environmentalists slammed it. Although an important milestone, Judge Gabriel's decision may not be the last word on the subject, as at least five ballot initiatives to amend the state's constitution are gathering signatures. These measures seek to either restrict companies' ability to drill or expand the power of local governments to regulate drilling within their boundaries. The industry has vowed to fight those initiatives. Similar measures were fielded in 2014, but an 11th-Hour compromise brokered by Governor John Hickenlooper kept them off the ballot. For more on that, see August 7, 2014, article--Oil & Gas Industry Sees Brisk Business in Colorado after Withdrawal of Voter Initiatives.
Commenting on the court's decision in the Longmont case, Don Haley, COGA's president and chief executive, said, "COGA has always maintained that these bans and moratoriums on responsible oil and gas development are illegal, and we're pleased that ... the Supreme Court of Colorado has agreed with us. This is not just a win for the energy industry but for the people of Colorado who rely on affordable and dependable energy and a strong economy."
COGA's chairman, Brad Holly, an executive with Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas), added: "For COGA, and for the broader oil and natural gas industry, these lawsuits were an unfortunate, but necessary action, as it is imperative for our state's economy and its citizens that we strongly support the thousands of people we directly and indirectly employ, as well as their families, and the essential energy we responsibly provide. Our state and our business environment thrive when the oil and natural gas industry is allowed to operate and innovate."
Environmentalists saw Gabriel's decision very differently. The decision was "beyond comprehension," said Kaye Fissinger, president of a local group called Our Health, Our Future, Our Longmont. "The state has declared that fostering oil and gas development is in its interests. That the court apparently equates a government interest superior to human rights is a severe slap in the face. Our country's founding fathers are most certainly turning over in their graves."
Food & Water Watch, another group supporting Longmont, said the decision "strips all Coloradans of their Constitutional right to say no to fracking in their communities." U.S. Rep. Jared Polis, who helped organize the 2014 ballot initiatives, said of the decision: "It's a blow to democracy and local control. Now that the law has been interpreted, it's up to the state legislature or the people of Colorado to act to protect our neighborhoods and homes. I look forward to continuing to help advocates in these efforts to protect our communities."
Gabriel's decision recognized the rights of municipalities to use their zoning power to regulate some aspects of drilling, such as set-back provisions. But those measures cannot conflict with, or be more stringent than, the requirements adopted by the state through the COGCC.
The court decided a separate hydraulic fracturing case May 2, striking down a five-year moratorium on hydraulic fracturing enacted by Fort Collins. In a statement, the city said, "It is premature to comment until we have had a chance to review the Supreme Court's decision carefully and fully evaluate how it affects the City. These issues are complex, and we'll thoroughly examine the decisions relative to Fort Collins and Longmont. However, it is clear that the Supreme Court has found that the Fort Collins moratorium on hydraulic fracturing is in operational conflict with Colorado law and is therefore preempted."
In addition to Longmont and Fort Collins, other local governments had enacted bans or moratoria on drilling and hydraulic fracturing. The cities of Boulder, Broomfield and Lafayette, as well as Boulder County, enacted measures to limit or ban hydraulic fracturing in recent years. Following the court's decisions May 2, Broomfield's city attorney said he expects his lawsuit to be dismissed. Lafayette's ban was overturned in a legal action brought by COGA. Officials from the city and county of Boulder were said to be studying the May 2 rulings and assessing their options.
In a statement, the industry group COGA said the May 2 decisions "will have no direct impact on other states because each state has its own law of oil and gas, local government control and preemption. But the reasoning of the Court could have a substantial impact on other courts because so few cases have been decided on these issues nationally."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
