Ruling says state regulators correct to balance development with public health, environmental impacts; governor, lawmakers vow to update state’s policy
PUBLISHED: January 14, 2019 at 9:50 am
In a win for the oil and gas industry, the Colorado Supreme Court on Monday reversed a lower court ruling that said the Colorado Oil and Gas Conservation Commission should give more weight to the public health, safety and the environment when considering new drilling.
However, the win could turn out to be a lull before the next political face-off that has become more common as drilling has ramped up in the state’s more populous areas. As industry representatives welcomed the court’s decision, saying it upholds the law’s recognition of multiple interests, legislators and Gov. Jared Polis said the ruling highlights the need for changes to better protect the public.
“The bottom line is we need to make sure that health and safety are a priority and reform of the (Colorado Oil and Gas Conservation Commission) is a beginning,” said Sen. Mike Foote, D-Lafayette. “We are working on a bill to make sure health and safety are prioritized.”
Last week, newly inaugurated Gov. Jared Polis said in his first State of the State address that he would work to give communities more say in how oil and natural gas are developed. Polis has set a goal of moving Colorado’s electric grid to entirely renewable sources by 2040, although he concedes it’s more of an aspirational goal.
“While I’m disappointed by today’s ruling, it only highlights the need to work with the legislature and the Colorado Oil & Gas Conservation Commission to more safely develop our state’s natural resources and protect our citizens from harm,” Polis said in a statement.
Foote is more hopeful that stronger regulations on the oil and gas industry are more likely to pass now that Democrats have control of both houses in the Colorado General Assembly.
The state Supreme Court’s ruling stems from a campaign led by a group of teenagers represented by the Oregon-based group Our Children’s Trust. Several Colorado cities and counties filed briefs in support of the plaintiffs, who wanted regulators to consider the potential harm to the environment and public health and the worsening of climate change before approving new drilling.
The Colorado Court of Appeals had ruled the oil and gas commission misinterpreted state law by balancing oil and gas development with public health, safety and welfare when considering drilling permits. The Supreme Court disagreed.
The high court decided the Colorado Oil and Gas Conservation Commission — COGCC — acted within its authority when it rejected the plaintiff’s proposed rule on the effects of drilling..
Moreover, the Supreme Court said, the law is clear that the COGCC is required to foster the development of oil and gas resources and protect the rights of mineral owners and producers while preventing and reducing development’s effects on public health, safety and the environment.
“Specifically, as the Commission recognized, the pertinent provisions do not allow it to condition all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment,” according to the Supreme Court.
“The Court says the legislature did not intend to prioritize one policy goal over others, but its opinion does just that,” Dan Leftwich, co-counsel for the youth plaintiffs, said in a statement.
The court’s interpretation of the law allows the COGCC to ignore “significant adverse impacts to public health, safety and the environment if an operator claims such protections are not ‘cost effective’ or ‘technically feasible,’ ” Leftwich said.
However, Tracee Bentley, Colorado Petroleum Council executive director, said the ruling is positive for all Coloradans.
“This case has dragged on for over five years and it’s time to focus on uniting to encourage energy development in the United States, and, specifically, in Colorado,” Bentley said in a statement.
The ruling upholds the “Colorado way of doing business,” which is to consider multiple interests, said Dan Haley, president and CEO of the Colorado Oil and Gas Association, a trade organization. Under the law, the COGCC has adopted the most extensive and stringent regulations for the oil and natural gas industry in the country, Haley said in a statement.
“Despite this reality, if politicians choose to change how oil and gas is regulated, we will most definitely be at the table for those fact-based conversations,” Haley said.
Bentley said the industry intends to be “a proactive, positive presence in any discussion” about the future of oil and gas and will continue working with government and community leaders to strike the right balance.
But Anne Lee Foster, spokeswoman for Colorado Rising, the group behind a failed effort to require larger buffer zones around new wells, said the situation is out of balance. She said a ruling she believes favors oil and gas industry profits over the public’s best interests is proof of that.
“An agency that is charged with promoting an industry rather than protecting the public from harm is doomed to catastrophic failure. To this day the COGCC has never turned down a permit. We implore our lawmakers to act swiftly to prevent another tragedy, like the deadly Firestone explosion, from happening again,” Foster said in a statement.
Clashes over oil and gas development have grown in Colorado as companies have increased drilling and moved into neighborhoods, putting wells closer to homes and schools. Fears about drilling’s impact intensified after two people died in a 2017 house explosion in Firestone that was blamed on a cut flow line from a well.
There were 53,470 active wells statewide as of Dec. 17, with more than 23,000 of those along Colorado’s populous northern Front Range.
In 2013, Xiuhtezcatl Martinez of Boulder and other teenagers asked the COGCC to not issue any new permits for oil and gas drilling unless it could be shown “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.”
When commission officials in 2014 declined to adopt a such a rule, saying it contradicted and was beyond COGCC authority, the teenagers, supported by several advocacy groups, appealed. The Denver District Court ruled in favor of the COGCC and former Colorado Attorney General Cynthia Coffman.
But in 2017, the Colorado Court of Appeals sided with the teenagers, who were backed by Our Children’s Trust. The trust has pushed for better environmental and health protection in 44 states. Last year, 15 Colorado counties and cities filed a brief supporting the plaintiffs, saying that like other state agencies and local governments, the COGCC’s primary duty “is to
The oil and gas industry had argued the statute authorizing the COGCC to regulate the industry requires a balancing of interests — responsible oil and gas development, the rights of mineral owners, protecting public health and safety and preventing harmful environmental impacts.
However, community members, some elected officials and environmental groups contend the COGCC has swung far in favor of industry. After Colorado voters defeated a proposal in November to require 2,500-foot buffers between new wells and homes and other occupied buildings, several advocacy and community groups called on the new governor to put new drilling on hold while a comprehensive study of the health effects of drilling is conducted.
“Communities in every corner of our state want to know that their health and safety are being prioritized when it comes to oil and gas operations,” Colorado House Speaker KC Becker said in a statement. “This ruling puts the decision back into the hands of lawmakers to take action and we are committed to addressing this concern this legislative session.”
Advocates of a time-out on new drilling point to the large number of applications that have been filed for drilling permits. According to COGCC data, the number of applications moving through the approvals process in November exceeded 6,300 — nearly three times the number of permits that were pending at the beginning of 2018.
In December, the COGCC approved bigger buffer zones for oil and gas drilling near schools. The unanimous voted followed negotiation among regulators, community activists and industry representatives.
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