Colo. High Court Rules Colorado Frac Bans are “Invalid and Unenforceable”

The Colorado Supreme Court issued a decision on Monday in opposition of the City Of Fort Collins and their five-year fracing moratorium. The decision comes in the wake of a recent rebound in oil prices and could have long term implications for the statewide use of hydraulic fracturing and oil and recovery.

The court additionally ruled against a voter-supported ban in Longmont, Colo., preventing the use of hydraulic fracturing in that jurisdiction. In the opinions, released Monday, the court called both laws “invalid and unenforceable” because state law preempts them.

Lawsuits and counter-suits began following the initial support of a fracing ban in Longmont in 2012. Fort Collins got on board with Longmont in 2013 after voters supported the five-year moratorium. Following these initial rulings, the Colorado Oil and Gas Association (“COGA”) announced lawsuits in opposition to these rulings, which resulted in victories in the lower courts for COGA.

The back and forth escalated to the Colorado State Supreme Court to issue a definitive ruling after appellate courts requested the Supreme Court hear the case. Oral arguments for the case were heard in December 2015.

Ruling reinforces state has authority over oil & gas regulation

The case has garnered attention in not only Colorado, but across the country as an ongoing debate continues over what level of authority holds the right to regulate the oil and gas industry. The initial rulings in favor of the bans gave credence to the municipality’s belief that they could implement their own restrictions. The Supreme Court ruling reverses that belief and places the onus in the hands of the state legislature. The city of Fort Collins spent about $191,000 on outside counsel defending the citizen-initiated moratorium in court. COGA – Colorado Oil and Gas Association – spent about $1 million fighting the Fort Collins and Longmont laws, along with a fracking ban in Lafayette and moratorium in Broomfield.

Currently, there are no active wells in Fort Collins, and zero wells with a permit pending. Fort Collins is largely out outside of the core zone and no wells have been fraced in the past three years.

COGA leaders said they were pleased that the court sided with them in their view that local fracking bans and moratoriums are illegal in Colorado.

“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 President and CEO Dan Haley said in a press release. “It sends a strong message to anyone trying to drive this vital industry out of the state that those efforts will not be tolerated.”

Mixed reactions

Colorado Petroleum Council

The Colorado Petroleum Council welcomed the decisions for upholding the state’s primacy in overseeing oil and natural gas permitting and curtailing “arbitrary bans” on fracking that could cost local jobs, deprive state and local governments of tax revenue and limit access to energy resources, according to a CPC press release.

“Today’s decision protects private property rights, which are a main driver for the energy renaissance in this country,” executive director Tracee Bentley said in the release. “The U.S. was counted out as an oil and natural gas superpower, but with states like Colorado leading the way, the U.S. defied the odds to become the world’s largest producer of natural gas and a world leader in crude production.”

Colorado Attorney General Cynthia Coffman

In a press release, Coffman said that local frac bans “undermine the interests of the state as a whole.” But despite the court decisions, the fight might not be over yet, she said.

“Sadly, I fear today’s ruling will not end this divisive debate and instead some activists will continue to push anti-development initiatives undermining the state’s record of local cooperation on these policy issues,” she said.

City of Longmont

“The case did not end as the city hoped, but we respect the Supreme Court’s decision,” Longmont Mayor Dennis Coombs said in a press release. Coombs noted that Longmont’s other oil and gas regulations, including no drilling in neighborhoods, mandatory groundwater monitoring and setbacks from riparian areas remain in place.

U.S. Rep. Jared Polis, a Democrat whose district includes Fort Collins

Polis called the decision “a blow to democracy and local control” in a statement.

“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,” he said. “I look forward to continuing to help advocates in these efforts to protect our communities.”

The representative also submitted an amicus curiae brief to the court siding with Fort Collins. Through his attorney, Courtney Krause, Polis argued that Fort Collins’ moratorium was a valid land use regulation.

Colorado Rep. Mike Foote, a Democrat whose district includes Longmont

In a press release, Foote said he was disappointed about the decisions but noted that they reaffirmed local governments’ land use authority.

“Cities and counties may need to modify their approach somewhat,” Foote said, “but it’s clear that the Court has reaffirmed that local governments do have a seat at the table when it comes to oil and gas development. And in cases where local control isn’t recognized, we as legislators have the ability to step in.”

Environmental activists had previously filed to collect signatures to put amendments into the Colorado constitution in November that would set new setback regulations and serve as de facto drilling bans, ceding power to local authorities over state oil and gas regulators.

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