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In November, voters in the city of Lafayette, Colorado approved Ballot Measure 300, which banned all “oil and gas extraction and related activities” within the Lafayette city limits. Lafayette is at the western edge of the Wattenberg field in the Denver Julesburg Basin, where horizontal drilling into the Niobrara has taken off in the past three years.

On Aug. 27, Judge D.D. Mallard found Measure 300 to be invalid, based on the Colorado Oil and Gas Conservation Act which conveys oil and gas regulation authority to the Colorado Oil and Gas Conservation Commission.

“There is no way to harmonize Lafayette’s drilling ban with the stated goals of the Oil and Gas Conservation Act,” Mallard wrote, according to the Denver Post. “The state interest in production, prevention of waste and protection of correlative rights, on one hand, and Lafayette’s interest in banning drilling on the other, present mutually exclusive positions.”

This latest dismissal of a local drilling/fracing ban by a Colorado town comes on the heels of the Aug. 7 overturn of in Fort Collins, Colo. The town’s voters had enacted a ban on hydraulic fracturing last November.

“The five-year ban on the use of hydraulic fracturing within the boundaries of the City of Fort Collins is preempted by the Colorado Oil and Gas Conservation Act for two reasons: the five-year ban substantially impedes a significant state interest and the ban prohibits what state law allows,” Larimer County District Judge Gregory Lammons said in a nine-page opinion.

On July 25, a Longmont, Colorado ban on drilling and hydraulic fracturing was overturned by Judge Mallard. In December, the Boulder Daily Camera reported that after a recount, a fracing ban in Broomfield, Colorado passed by only 20 votes out of 20,000 votes cast.

In early August,  ballot initiatives were being circulated that would have amended the state constitution to convey environmental rule setting by any and all local governments, essentially preempting the state’s existing authority to regulate oil and gas in Colorado.

On Aug. 4, Colorado Governor John Hickenlooper brokered a compromise with backers of the initiatives, including U.S. Congressman Jared Polis, to pull all the oil and gas related initiatives (including one by pro oil and gas development groups that would have barred local governments that impose drilling bans from receiving taxes generated by oil and gas production) from the submission process.

At EnerCom’s The Oil & Gas Conference® 19, Gov. Hickenlooper touted the significant economic impact that oil and gas development has on the state of Colorado, notingthat oil and gas is a $30 billion industry in the state that delivers 120,000 jobs with an average wage 30% above the state’s median wage.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.