The majority opinion conjures a condition precedent out of grammatical thin air, which now enshrines the “precautionary principle” in Colorado law.  This has been a goal of environmental advocates pursuant to COGCC rulemaking for many years – API/CPA

In February, attorneys for a group of under-aged plaintiffs argued the youths’ case against permitting practices used by the Colorado Oil and Gas Conservation Commission (COGCC) in the Colorado Court of Appeals.

Earth Guardians climate activist Xiuhtezcatl Martinez, plaintiff in Martinez v. COGCC

The teenagers are part of a Boulder-based organization called Earth Guardians. Their complaint is against standards that the COGCC has used for permitting oil and gas wells for decades.

Media outlets covered the case at the time, but how many people took the case seriously was uncertain until the the Court of Appeals overturned the lower court.

“The lawsuit is one of several that have been filed around the country on behalf of young litigants, charging that state and federal agencies aren’t truly looking out for them (and future generations) in the way they issue drilling permits for oil and natural gas. Each one is a broadside against America’s ongoing reliance on fossil fuels, decrying a range of adverse consequences, from pollution-related respiratory ailments to environmental degradation and climate change,” Westword said in its February coverage.

Earlier in the Earth Guardians’ case, Denver District Court Judge Eric Elliff ruled against the teens’ argument, declaring that the COGCC is merely required to “strike a balance” between oil and gas development and protecting public health, the environment and wildlife, according to Westword’s report.

However, on March 23, 2017, the Court of Appeals returned a 3-2 decision reversing the lower court, potentially introducing a new interpretation of the scope of considerations the COGCC would be required to include in its approach to rule making and permitting for oil and gas operations in Colorado.


Denver-based Welborn Sullivan Meck & Tooley PC oil and gas Special Counsel Sarah Sorum has posted an article discussing the recent decision from the Colorado Court of Appeals, a decision that could have significant ramifications for oil and gas permitting in the state going forward.

Sorum’s analysis, republished with permission, follows.

COGCC: A Balancing Act or “Subject To” Protection of Health, Safety, and Environment – A Surprising Decision from the Colorado Court of Appeals

Case That Would Change Colorado Oil & Gas Permitting Wins a Reversal in Appeals Court

Welborn Sullivan Meck & Tooley, PC oil and gas Special Counsel Sarah Sorum

A recent decision from the Colorado Court of Appeals (“Court”) could mean a new focus for the Colorado Oil and Gas Conservation Commission (COGCC).

On March 23, a three-judge panel issued a split decision in Martinez v. Colo. Oil & Gas Conservation Comm’n, 2017 COA 37, with two of the three Judges rejecting the COGCC’s assertion that its role under the Oil and Gas Conservation Act (Colo. Rev. Stat. §§ 34-60-101 to -130) (the “Act”), is to balance oil and gas development with other public interests such as public health, safety, and welfare.

At issue was a petition for rulemaking filed with the COGCC in 2013 by members of the Boulder-based Earth Guardians asking that the COGCC “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.”

The COGCC solicited and reviewed a substantial amount of public input on the matter, and later denied the petition, finding, inter alia, that the proposed rule would require it to “readjust the balance crafted by the General Assembly under the Act,” thus making the proposed rule “beyond the Commission’s limited grant of statutory authority.”

The petitioners appealed that decision to the Denver District Court, which affirmed the COGCC’s denial of the petition.

In reversing the lower court decision, the Court found that the district court and the COGCC had erred in interpreting the scope of the COGCC’s authority under the Act.

Specifically, the Act provides that it is in the public interest to “[f]oster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources.” Colo. Rev. Stat. § 34-60-102(1)(a)(I).

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The COGCC argued that this requires it to balance oil and gas production with other public interests such as those outlined in the proposed rule. The Court, after a lengthy analysis of the phrase “in a matter consistent with,” disagreed, holding that the quoted language instead indicates that “fostering balanced, nonwasteful development is in the public interest when that development is completed subject to the protection of health, safety, and welfare.”

The Court went on to discuss numerous amendments to the Act since its adoption, finding that cumulatively “[t]hese amendments reflect the General Assembly’s general movement away from unfettered oil and gas production and incorporation of public health, safety, and welfare as a check on that development.”

Rather, the Court found, “the clear language of the Act – supported by the Act’s legislative evolution and the Commission’s own enforcement criteria – mandates that the development of oil and gas in Colorado be regulated subject to the protection of public health, safety, and welfare, including protection of the environment and wildlife resources.”

Judge Booras dissented, finding that the quoted language from the Act signifies the need for a balancing process, as the COGCC had argued, not the elevation of one interest over all others.

She also noted that this language is located in the legislative declaration to the Act, which is generally only used to interpret an ambiguous statute, and cannot “override the language of a statute.”

Instead, she pointed to the COGCC’s “actual” statutory authority, located in Colo. Rev. Stat. § 34-60-106(2)(d), which provides that “[t]he commission has the authority to regulate . . . [o]il and gas operations so as to prevent and mitigate significant adverse environmental impacts on any air, water, soil, or biological resource resulting from oil and gas operations to the extent necessary to protect public health, safety, and welfare, including protection of the environment and wildlife resources, taking into consideration cost-effectiveness and technical feasibility.” This language, she concluded, further supported the COGCC’s interpretation of the Act as on the whole requiring a balancing of numerous competing interests.

Procedurally, the case has now been remanded back to the district court for a decision consistent with the Court’s opinion. The Court did not rule on the merits of the rulemaking petition, meaning that the COGCC is not necessarily required to adopt the proposed rule. Instead, the ruling permits the petitioners to resubmit their petition for rulemaking, which cannot now be denied on the grounds that the COGCC lacks authority to implement it. That said, it is anticipated that the COGCC will appeal the decision to the Colorado Supreme Court.

What the Martinez decision means for the future of oil and gas operations in Colorado is unclear. On the one hand, the Opinion may simply mean business as usual for the COGCC. The Commission and other state agencies already use a myriad of rules and regulations to require oil and gas developers to protect public health, safety, and welfare. These efforts were outlined at length in a 753-page Memorandum prepared by COGCC Director Matt Lepore for use by the Commissioners in considering the proposed rule.

On the other hand, the Opinion could be read as requiring a comprehensive reorientation of the COGCC, away from “balancing” oil and gas development with other public interests and toward a focus on the pre-condition of protection of public health, safety, and welfare. This is the interpretation that the conservation groups are advocating.

This decision has been criticized by the COGCC and numerous industry groups, and many are encouraging the COGCC to appeal the decision to the Colorado Supreme Court. We could hear more after May 1, when the Commissioners next meet.

Copyright 2017 Sarah Sorum – Welborn Sullivan Meck & Tooley, P.C.  All Rights Reserved – Reprinted with Permission. 


Oil & gas industry groups seek amicus support

Request for amicus support from the Colorado Alliance of Mineral and Royalty Owners 

Last night, the Colorado Alliance of Mineral and Royalty Owners (CAMRO) emailed its members a request for amicus support for a potential appeal to the Colorado Supreme Court in Martinez v. COGCC, ”a case in which environmental petitioners are seeking to enjoin all new oil and gas permitting in the state.”

The CAMRO discussion of the case appears below.

In the case of Martinez v COGCC, a case involving an administrative petition to end oil and gas permitting in Colorado and the proper interpretation of our Oil and Gas Conservation Act, the Colorado Appellate Court has ruled in favor of Martinez.

We believe this case will have ramifications beyond just the oil and gas industry as it arguably applies to any statewide statutory or regulatory regime that requires the balancing of competing interests.  This is why CAMRO must file an amicus in support of API and CPA’s appeal to the Colorado Supreme Court.

Cindy Bargell, Esq. who has served on the board of directors of CAMRO and is a very highly respected oil and gas attorney has agreed to file the amicus on behalf of CAMRO.


Request for amicus support from API and CPA

REQUEST FOR AMICUS SUPPORT – POTENTIAL COLORADO SUPREME COURT ENVIRONMENTAL CASE WITH IMPLICATIONS FOR REGULATED INDUSTRIES IN THE STATE AND BEYOND

The American Petroleum Institute (API) and Colorado Petroleum Association (CPA) are writing to request amicus support in a potential appeal to the Colorado Supreme Court in Martinez v. COGCC, a case in which environmental petitioners are seeking to enjoin all new oil and gas permitting in the state.  This is an appeal of a decision in which the Colorado Court of Appeals, in a 2-1 decision, substantially reinterpreted Colorado’s Oil and Gas Conservation Act (Act), reading out several key terms and concepts and putting a judicial thumb on the scale against regulated industries.  While we are seeking an extension of the current deadline, we are seeking amicus curiae briefs in support of our appeal for filing with the Court by Thursday, May 4.

This is an appeal of a decision in which the Colorado Court of Appeals, in a 2-1 decision, substantially reinterpreted Colorado’s Oil and Gas Conservation Act (Act), reading out several key terms and concepts and putting a judicial thumb on the scale against regulated industries.  While we are seeking an extension of the current deadline, we are seeking amicus curiae briefs in support of our appeal for filing with the Court by Thursday, May 4.

BACKGROUND

In late 2013, several legal minor petitioners in Colorado, represented and advised by an Oregon-based organization “Our Children’s Trust” which opposes regulated industries across the country, filed a rulemaking petition with the Colorado Oil and Gas Conservation Commission (COGCC).  Their petition, similar to dozens of others the group has filed with state regulators over the last several years, sought an injunction on all new oil and gas permitting in Colorado, one of the country’s largest producers of oil and gas, until the COGCC could conduct superfluous new studies and put vague new regulations in place.  COGCC rejected the petition in April 2014, and a state trial court affirmed the rejection in February 2016, on grounds that the Act forbade the Commission from halting all development, instead requiring a careful balancing of the need for energy development with other state interests.

On March 23, 2017, the Colorado Court of Appeals held in a 2-1 decision that the Act requires no such balancing, and that other language in the Act requiring assessment of technological feasibility and cost effectiveness of regulations could give way to the extraordinary relief being sought by petitioners – i.e., a statewide moratorium on oil and gas permitting.  The Court remanded the petition to the COGCC for further consideration.

DISCUSSION

This decision has major ramifications beyond the oil and gas industry.  Environmental litigants will now be emboldened to test the limits of other Colorado laws that impose balancing tests (for example, land use laws affecting construction and other industries), and lower courts may be forced to grant the relief they seek as long as the Martinez decision remains on the books.  The decision will also be used outside Colorado to restrict or end permitted activity overseen by state regulators.

Martinez is also directly at odds with the legislative drafters’ intent.  According to the author of the Act’s 1994 key phrase that was reinterpreted by the Court of Appeals – “in a manner consistent with protection of public health, safety and welfare …”[1]

“I can assure you that no one – neither on the [task force tasked with amending the Act], nor in the General Assembly – thought that the phrase made protection of the environment an absolute and determinative limitation on the directive to [‘foster ’] the development of the state’s oil and gas resources.  Rather, the COGCC was to appropriately consider environmental concerns ‘to the extent necessary … taking into consideration cost-effectiveness and technical feasibility.’[2]  This formulation is the very definition of a balancing test.  If the intent had been to make environmental protection the overriding purpose, I would have employed wording along the lines of ‘so long as such development protects public health, safety and welfare.’

“I urge an appeal of this misguided decision[.]”

The majority opinion conjures a condition precedent out of grammatical thin air, which now enshrines the “precautionary principle” in Colorado law.  This has been a goal of environmental advocates pursuant to COGCC rulemaking for many years.

REQUEST:  Although we are currently seeking an extension of the filing deadline, we ask for your motions for leave and proposed amicus briefs in support of cert by Thursday, May 4.
[1] The redundant addendum “including protection of the environment and wildlife resources” – already encompassed within the ambit of public health, safety and welfare – was added in a 2007 amendment, along with the word “balanced” in the first clause of the legislative declaration. Former Colorado Department of Natural Resources Director and USDA Under Secretary Harris Sherman insisted on the addition of “balanced” because he was concerned that “in a manner consistent with” was not sufficient assurance that the COGCC would responsibly balance development with environmental protection.

[2] Colo. Rev. Stat. § 34-60-106(2)(d). It is noteworthy that the majority opinion focuses only on the phrase “to the extent necessary” and ignores the following qualifying words. The dissent properly regards the entire phrase.

 


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