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By Tripp Baltz
May 5 — The recent Colorado Supreme Court rulings nullifying hydraulic fracturing restrictions in two municipalities have bolstered efforts for state constitutional initiatives to give local governments more control over oil and gas activities in their communities.
Backers of statewide ballot measures to increase local control over fracking say the May 2 court rulings, which said the state's Oil and Gas Conservation Act preempts local fracking bans, have fueled their campaigns. Under at least one of the ballot initiatives, for which supporters are now gathering signatures, local drilling rules would trump state preemption (Initiative 75), and communities could ban fracking outright if they chose to.
“It's strengthened the resolve—we're actually generating more interest,” Tricia Olson, spokeswoman for Coloradans Resisting Extreme Energy Development, which is pushing Initiative 75 and another proposed constitutional amendment restricting fracking, told Bloomberg BNA May 4. “Our volunteers are feeling a greater sense of urgency.”
The two court rulings, authored by Justice Richard L. Gabriel, said the state's oil and gas act preempts a voter-approved fracking ban in Longmont and a five-year moratorium in Fort Collins on fracking, the storing of fracking waste and other drilling activities (84 ECR, 5/2/16).
In the wake of the decisions, while seemingly resolving the legal questions about the validity of such restrictions, varying opinions have emerged about what the rulings mean for conflicts between state and local regulation of drilling.
Opponents of using hyrdraulic fracturing to facilitate oil and gas production say the rulings have not deterred them but rather inspired their efforts to keep pursuing a way for communities to regulate energy development.
“We believe that good policy-making happens from the ground up and that local communities are best suited to make decisions about what happens with oil and gas drilling within their borders,” said Pete Maysmith, executive director of Conservation Colorado, in a statement May 2, the day of the rulings. “Local governments should have the ability to call a timeout on drilling in order to better understand its impacts and ensure safety and public health, just as they are allowed to do with other industries.”
He said the concerns of communities “that are being dramatically impacted by oil and gas drilling” have not dissipated because of the rulings.
The oil and gas industry, meanwhile, says its success in shutting down the Longmont and Fort Collins ordinances signals that it's time for similar existing restrictions to be withdrawn and for communities to work with companies to address their citizens' concerns.
“We think this ends the local fracking ban movement,” Dan Haley, president and chief executive officer of the Colorado Oil and Gas Association, the plaintiff in the lawsuits challenging Longmont's and Fort Collins' voter-approved measures, told Bloomberg BNA. The rulings send “a clear message to other local communities about what the law says.”
In a 29-page ruling, the court held that Longmont's ban “operationally conflicts with state law.” In a 19-page ruling, the court said Fort Collins' five-year moratorium on fracking and the disposal of fracking waste is preempted by state law. Both the ban and the moratorium attempt to “materially impede or destroy a state interest”— the development of natural gas, oil and other hydrocarbons — and are “invalid and unenforceable,” the court said.
In the past four years, fracking bans and moratoriums have been approved in the city of Boulder, Boulder County, Broomfield and Lafayette in addition to Longmont and Fort Collins. Some of the measures were approved by voters and others by city councils or county boards. The ordinances in Broomfield and Lafayette were invalidated by court rulings. An appeal in the Broomfield case was put on hold while the Longmont and Fort Collins cases were pending before the Supreme Court. Lafayette did not appeal a court ruling striking down its ban.
The association didn't challenge the Boulder city and county moratoriums, said Haley, choosing instead to wait for the Supreme Court to act on the pending case. Now both moratoriums should be withdrawn, he said.
“Rather than continuing to stand by a clearly illegal ban, we would hope the City and County of Boulder will voluntarily withdraw their bans on oil and gas development,” he said. “We look forward to engaging with the City and County of Boulder and begin a real and honest dialogue.”
Attorneys for the city of Boulder are reviewing the rulings and will advise the city council “on possible next steps,” Sarah Huntley, spokeswoman for the city, told Bloomberg BNA May 4. The Boulder County Board of County Commissioners released a statement May 2 noting the Supreme Court rulings were specific to the two communities named in the lawsuits.
“As such, the immediate impacts of these rulings on Boulder County’s regulations, including its temporary moratorium on new oil and gas operations, will need further analysis,” the board said. “Like all other Colorado communities that regulate oil and gas development, we need to take a close look at our existing regulations before we take any action to change our stance on fracking in unincorporated Boulder County.”
The state's oil and gas law created the Colorado Oil and Gas Conservation Commission, which has primary regulatory authority over oil and gas activities in the state. Commission rules grant local governments some regulatory and administrative decision-making input into drilling regulation, Matt Lepore, director of the commission, told Bloomberg BNA May 4.
Rules allow for counties, cities and towns to assign a “local government designee” to provide feedback and ask questions when an oil and gas producer is going through the process of seeking a permit to drill, he said. Additionally, rules provide for municipalities to enter into memoranda of understanding with oil and gas companies operating within their jurisdiction. Such memoranda routinely impose requirements more stringent that what state rules require, he said. The MOUs are then enforceable by the state.
“Frankly, when compared to other states, local governments play a much more robust role in the Colorado regulatory regime,” Lepore said. “That role was already there before the governor's task force.”
The task force was convened by Gov. John Hickenlooper (D) in September 2014 to address conflicts between state and local regulation over drilling. The task force approved two recommendations concerning siting of large drilling facilities, Lepore said (16 ECR, 1/26/16).
Still, questions linger as to the extent of local control. The court said that cities, counties and towns may continue to regulate land use related to oil and gas operations as long as local rules are not in operational conflict with the state oil and gas act.
The Fort Collins ruling might have left some room for communities to impose moratoriums of shorter duration than the city's five-year ban, sources told Bloomberg BNA.
“We view such a lengthy moratorium as different in kind from a brief moratorium that is truly a temporary ‘time-out,' ” the court said.
“The opinion held that there's no difference between an illegal five-year moratorium and an illegal ban,” Mark J. Mathews of Brownstein Hyatt Farber & Schreck LLC in Denver, attorney for the Colorado Oil and Gas Association, told Bloomberg BNA. “We argued the duration didn't matter, but Judge Gabriel didn't agree. He expressed no view of a materially shorter duration, so it's a narrow opinion in that respect. We can't argue this as a precedent that a two-year moratorium, for example, is illegal per se.”
However, he said, “there's some very good language in here that suggests the court would strike down an operationally preempted moratorium of a shorter length.”
The various ballot measures proposed for November seek to eliminate state preemption over local rules.
“People are signing our petitions now because they thought the court would make a moral, instead of a legalistic ruling,” Cliff Willmeng of the Colorado Community Rights Network told Bloomberg BNA May 4. “State preemption is there to make sure the majority of the state goes unrepresented. This is a system designed to disenfranchise communities and ensure that people do not have access to power.”
The network is promoting a community rights amendment (Initiative 40) that would essentially eliminate state preemption and extend legal primacy to municipalities to govern drilling and other industrial and commercial activity within their jurisdictions. It is similar to the CREED proposal (Initiative 75) in that both measures would let communities ban fracking “if they chose to,” Olson told Bloomberg BNA.
A third measure would increase the setback requirement in state oil and gas rules, extending the minimum distance between a drilling well and an occupied structure such as a home, church, school or hospital from the current 500 feet to 2,500 feet (Initiative 78). A fourth measure would declare that state and local governments “shall assign the highest priority to the protection of a health environment” (Initiative 63).
When overlap exists between a local government rule and a state government rule, the rule that is “more protective of healthy environment” shall govern, the proposal says. All four ballot measures — 40, 63, 75 and 78 — have had their petition format approved by the Colorado Secretary of State, meaning their supporters can now gather signatures to get them certified for the November ballot.
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