Just 500 feet from the courthouse, a pro-oil rally at the capitol steps asked people to “Vote No on Proposition 112” 

Below: summary of the Martinez case and breakdown of the oral arguments

It was a busy day for oil and gas in Colorado on Oct. 16. At lunchtime, several hundred industry supporters joined a ‘Mayors Against Proposition 112’ rally at the Colorado State Capitol.

Loud speakers played Credence Clearwater Revival’s “Fortunate Son” to large crowds of oil and gas company professionals who were streaming out of nearby skyscrapers to join Denver’s second pro-oil and gas rally in less than 75 days.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

This was the scene about an hour before the Colorado Supreme Court heard oral arguments in the COGCC v. Martinez case in downtown Denver – photo: Oil & Gas 360

At the rally on the Colorado Capitol grounds, industry groups handed out “Vote No on 112” flyers, tee shirts, yard signs and sunglasses.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

At the rally industry groups handed out yard signs and banners saying “Jobs Matter – Vote No on 112” – photo: Oil & Gas 360

Proposition 112 is the 2018 citizen-initiated ballot initiative put forth and backed by numerous climate groups. Proposition 112 seeks to impose 2,500-foot minimum drilling setbacks from all occupied structures, water sources wet or dry and any other vulnerable areas as declared by state or local government in Colorado at any time. The measure would increase the distance for all new oil and gas operations by a factor of five—extending the no-drilling zone between occupied structures and a well to 2,500 feet.

Martinez case reaches the Colorado Supreme Court

Exactly the distance of Colorado’s existing oil and gas setback away from the rally–500 feet–the stars were aligning for a legal showdown between attorneys representing two disparate groups of people.

It was 90 minutes and counting until the seven Colorado Supreme Court justices would file into the stunning glass-domed courtroom to hear 60 minutes of precisely-timed oral arguments in the Martinez case.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

Inside the Colorado Supreme Court courthouse on the day of oral arguments for the COGCC v. Martinez case – photo: Oil & Gas 360

On one side of the courthouse were the Respondents–youth climate activists who had challenged the way the COGCC defines its legislature-mandated priorities for issuing drilling permits to bring up the state’s vast oil and gas resources.

On the other side of the aisle were the attorneys representing the people who issue the very permits that allow the drilling and production of oil and gas in Colorado—the Colorado Oil and Gas Conservation Commission–the Petitioner in today’s supreme court case.


SUPREME COURT, STATE OF COLORADO – Oral Argument: Tuesday, October 16, 2018 Bailiff: Chambers of Justice Boatright 2017SC297 (1 HOUR) 1:30 p.m. EN BANC

Petitioners: Colorado Oil and Gas Conservation Commission, Colorado Petroleum Association, and American Petroleum Institute,

v.

Respondents: Xiuhtezcatl Martinez; Itzcuahtli Roske-Martinez; Sonora Binkley; Aerielle Deering; Trinity Carter; Jamirah DuHamel; and Emma Bray, minors appearing by and through their legal guardians Tamara Roske, Bindi Brinkley, Eleni Deering, Jasmine Jones, Robin Ruston, and Diana Bray.

ISSUE(S): [REFRAMED] Whether the court of appeals erred in determining that the Colorado Oil and Gas Commission misinterpreted section 34-60-102(1)(a)(1) C.R.S. as requiring a balance between oil and gas development and public health, safety and welfare.


The outcome of the case is significant. If the supreme court upholds the appeals court ruling, this would drastically change the criteria that the Colorado Oil and Gas Conservation Commission uses to permit and regulate oil and gas drilling and production for the nation’s seventh largest oil producing state.

Here is how the COGCC states its mission:

“The mission of the Colorado Oil and Gas Conservation Commission (COGCC) is to foster the responsible development of Colorado’s oil and gas natural resources.

“Responsible development results in:

  • The efficient exploration and production of oil and gas resources in a manner consistent with the protection of public health, safety and welfare.
  • The prevention of waste.
  • The protection of mineral owners’ correlative rights.
  • The prevention and mitigation of adverse environmental impacts.”

A matter of balance

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

Oil & Gas industry professionals heading to the rally at the Colorado State Capitol Oct. 16. The rally was at the beginning of oral arguments for the Martinez case, which was being heard by the Colorado Supreme Court – photo: Oil & Gas 360

The commission argues that it has successfully used a “balanced” approach to meet its legislative mandate of fostering oil and gas development while protecting public health, safety and welfare, and preventing and mitigating adverse environmental impacts.

The commission’s ‘balanced approach’ to fostering and regulating oil and gas activity while protecting health, welfare and environment is what the Martinez/Wild Earth Advocates climate activists have called into question.

The Martinez/Wild Earth Advocates and their fellow respondents who appeared before the Colorado Supreme Court this week had sought to have the COGCC impose a rule that would stop oil and gas activity in the state until such time as the commission could assure zero environmental and climate impact for the oil and gas development activity that it permitted.

The group’s requested rulemaking was recapped on April 22, 2014, in a memorandum to the COGCC commissioners from COGCC Director Matthew Lepore.

The petition from Martinez et al requested that the COGCC promulgate “a rule to suspend the issuance of permits that allow hydraulic fracturing until it can be done without adversely impacting human health and safety and without impairing Colorado’s atmospheric resource and climate system, water, soil, wildlife, other biological resources.”


Lepore’s memo went on to say: “The Petitioners request the Commission to take the following specific actions ‘to protect the health and safety of Colorado’s residents and the integrity of Colorado’s atmospheric resource and climate system, water, soil, wildlife, other biological resources, upon which all Colorado citizens rely for their health, safety, sustenance, and security’:

(1) Evaluate the impacts of oil and gas drilling on trust resources and human health according to the best available science before issuing any permits for oil or gas drilling or exploration;

(2) Adopt a climate recovery plan by March 15, 2014, based on the best available science that fulfills the Commission’s duty to protect trust assets from impairment;

(3) Publish annual reports, which must be verified by an independent third-party, on statewide greenhouse gas emissions from the oil and gas industry on the Commission’s website for public review;

(4) Adopt any necessary policies or regulations necessary to implement the proposed action detailed in sections (1), (2), and (3) above.”


Path to the Colorado Supreme Court

After more than a year of study and putting together 1,400 pages of documents in the process of understanding and assessing the youths’ petition for the new rulemaking, the COGCC concluded that it was not necessary for it to conduct the requested rulemaking, based on its view that it already permits and regulates using a balanced approach.

The petitioners took the matter to court. The lower court ruling favored the Colorado Oil & Gas Conservation Commission (COGCC) decision not to engage in a rulemaking. The effect was that COGCC could continue permitting and regulating oil and gas in Colorado the way it always has—by balancing the fostering of responsible oil and gas development with safeguarding the public health, safety and welfare.

The petitioners then took the case to the Colorado Court of Appeals. Their attorneys argued that the COGCC had a separate duty to protect health, safety and welfare and environment, rather than providing a balance of the commission’s two mandates. Two of the three appellate court judges agreed with the interpretation and overturned the lower court in a two-to-one decision.

The State of Colorado then petitioned the high court to hear the case. The court agreed to do so.  Months ago it accepted briefs and finally this week the justices heard both sides’ oral arguments.


What’s at stake?

A lot rides on the Colorado Supreme Court decision. Will the Court decision enable the COGCC to carry on permitting wells and regulating oil and gas operations the way it has for decades, or will it have to abandon its ‘balanced approach’ in order to guarantee zero environmental impact before issuing permits?

At stake are billions of dollars in investment for continuing oil and gas development and production, more than 100,000 jobs, and millions of dollars in tax revenue, royalty payments and payroll checks from oil and gas development in the state.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

500 feet apart – The Colorado Capitol as seen from the fourth floor balcony at the Colorado Supreme Court facility. Same distance as the current oil and gas drilling setback in Colorado. Photo: Oil & Gas 360

By 1:00 p.m. on Tuesday the courtroom was filling fast with attorneys and onlookers. By 1:25 the last seats were filled. Onlookers were mostly dressed in business attire or other conservative clothing.

“All rise”

At precisely 1:30 a gavel was struck in the rear of the courtroom and a male voice said, “All rise.”

Within seconds everyone in the room was standing, and all seven Colorado Supreme Court justices quietly emerged from behind the bench and quickly took their seats.

Who are the justices?

  • Nathan B. Coats, Chief Justice
  • Monica M. Marquez
  • Brian D. Boatright
  • William W. Hood, III
  • Richard L. Gabriel
  • Melissa Hart
  • Carlos A. Samour, Jr.

After a very brief instruction to counsel about the order of presentations, Chief Justice Coats said, “Mr. Yarger proceed at will.”

The argument for the Petitioners: COGCC

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

Colorado Solicitor General Fred Yarger argued for the COGCC during the presentation of oral arguments in the COGCC v. Martinez case at the Colorado Supreme Court Oct. 16, 2018 – Photo: Colorado Attorney General’s office.

Mr. Yarger is Colorado Solicitor General Frederick R. Yarger, with the office of the Attorney General of Colorado. Yarger argued on behalf of the petitioner—the COGCC.

“The petition [referring to the petition previously submitted in 2013 by the respondents in this case to request a rulemaking] has asked the commission to halt oil and gas permits across the entire state. It asked the commission to adopt a zero-cumulative impact standard that no human activity could satisfy,” Yarger began.

Requested rulemaking wanted COGCC to regulate the entire fossil fuel supply chain all the way to end use by the consumer

“It asked the commission to regulate not just oil and gas operations but the entire fossil fuel supply chain, from operations all the way to end use by the consumer, and it based those requests on the Public Trust Doctrine which this court and other courts have rejected.”

Yarger said the commission’s decision not to engage in a rulemaking was based on the commission’s 1,200-page record compiled by taking comment, studying and consulting with other agencies and experts beginning in 2013. Only after compiling its 1,200 pages of information and data did the commission decline to pursue the petition’s request, based on the information presented in the 1,200-page record, Yarger pointed out.

“The question here is whether that decision, that order by the commission, was proper,” Yarger said. He said there were two aspects of that decision before the court:

  • Whether the commission’s balanced approach to regulation—the interpretation of the Act—that the commission used to decline to pursue the request was correct under the act’s language and structure, and
  • Whether the 1,200-page record provides other independent reasons to affirm the commission’s order.

Yarger said that what the respondents are claiming is that the commission has misinterpreted and misapplied the act for years.

Referencing the idea of the COGCC regulating the entire fossil fuel supply chain, Yarger said: “There was this additional issue that parts of the request, including the request to look at the entire fossil fuel supply chain—including end use by the consumer—that’s more properly the purview of the Department of Health and Environment, which looks at statewide emissions issues, groups sources of emissions into categories and then imposes regulations on those entire sectors or groups of emissions.”

Looking at how the balanced approach works

In discussing the idea of the commission’s ‘balanced approach’, Yarger offered examples: “At the permitting level, you see this take place on a site-specific basis where there are conditions of approval attached to oil and gas development permits. And a lot of the balance takes place in that context.

Yarger cited two examples:

  • Depending on the proximity of surface waters, additional measures might be implemented to ensure that leaks and spills don’t find their way into surface waters.
  • If ground water is shallow to the surface, closed loop drilling systems can be required to ensure again that no leaks penetrate into aquifers.

“That’s the way that my client, the commission, foresees this balancing taking place. It’s not an either/or proposition, it’s not a zero-sum and it’s not a zero-cumulative impact standard. It’s complex, and that’s why the general assembly has reconstituted the commission, required cross-agency collaboration and imposed the standards it imposed.

“If you look just at the Legislative Declaration what you see is language like ‘foster the responsible balanced production of oil and gas resources.’ ‘Foster’ means promote growth and development. ‘Responsible and balanced’ is a substantive matter. The meaning of those terms is for a responsible person to look at an issue from all sides and consider all the various factors. Not to consider one or the other or to impose a standard that could be met.

“So all those terms put in context of the Act as a whole I think indicate exactly what the commission has adopted over the past 10 years, which is a balanced approach to regulation—meaning taking account of all the factors relevant to making responsible regulatory decisions.”

“What the Court can’t do is what the court of appeals did which is look just at the Legislative Declaration, and just as an afterthought look at some of the provisions in the Act itself and decide that the legislative declaration supersedes those provisions.

“That’s pretty clear from the precedent of this Court that that’s just not the way that you’re supposed to read statutes and it’s inconsistent with what the general assembly says which is that ‘legislative declarations are for clearing up ambiguities, not for creating separate substantive standards’.”

One justice asked: “Could 106(2)(d) be a complete answer in and of itself then?”

Yarger responded: “I think this court could resolve this case looking solely at that provision.”

Responding to another question, Yarger said: “To be clear, the commission doesn’t view its duty as ignoring the relevant factors. It has to regulate to protect public health and the environment. It has to regulate to protect wildlife resources. What it can’t do is do what this rulemaking request asked of it, which was to pursue a zero-cumulative impact standard, halt oil and gas production statewide while that standard was being implemented, and consider impacts all the way downstream from the wellhead.”

Yarger then requested to hold his remaining time until the end, and he was granted that request by the Court.

The argument for the Respondents: Martinez et al

At that point, Julia Olson, counsel for the respondents, took the podium to present her argument in her allotted 30 minutes.

Olson is the executive director & chief legal counsel for Our Children’s Trust, which has initiated legal and executive branch actions in all 50 states and at the federal level. “Our mission is to protect earth’s atmosphere and natural systems for present and future generations,” according to the group’s website.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

Julia Olson, executive director & chief legal counsel for Our Children’s Trust, argued for Martinez et al in the COGCC v. Martinez case at the Colorado Supreme Court. Photo: Our Children’s Trust

In her opening remarks, Olson returned the focus to the original question: “Did the court of appeals err in determining that the commission misinterpreted Section 102(1)(a)(1) as requiring a balance between on the one hand public health, safety and welfare, and on the other, oil and gas development. And that’s the salient question before the Court today,” she said.

At one point, Olson said, “The outstanding question that I think is really critical that this court address, is under the plain reading of the statute, does the commission have the discretion under their balancing theory to continue authorizing oil and gas drilling when there is evidence that it is harming public health, safety and welfare?

“So on the one hand they say, ‘yes, they have the authority to protect public health’, but on the other they say ‘we have the discretion to allow oil and gas drilling that harms public health’. And that’s the balancing question that’s before the Court today.”

Olson said that they agree the commission has that balancing authority when it comes to wildlife but “nowhere in the statute has given them the discretion to balance public health, safety and welfare with oil and gas development.”

During a clarification, one of the justices summarized the respondents’ position as “the commission cannot approve a permit if there is an adverse impact.” Olson said she thought it would depend on “how the commission defined a significant adverse impact to human health and what that looked like.”

“I think there are harms to human health that are not allowed under the statute which might not rise to the level of a ‘significant adverse impact’. For example, such as if children are having an increased incidence of asthma, is that a significant adverse impact?”

Olson responded to a number of questions by the justices during her argument and relinquished the podium when her 30 minutes were up.

Colorado Solicitor General summarizes the key issue using his final four minutes

Having reserved approximately four minutes at the end, Solicitor General Fred Yarger took the podium after Olson yielded and he cited testimony from the director of the Air Pollution Control Division that was part of the 1,200-page Administrative Record generated by the COGCC when determining whether or not to consider the requested rulemaking.

Yarger referenced the Colorado Air Pollution Control Division director’s testimony on page 1,103 in the record:

“I’d like to read some quotes. ‘It’s important to know that just about every activity that we engage in in modern life does have some impact on our air quality.’ That includes driving cars which of course has public safety impacts, accidents on the roadway, but not just that – greenhouse gas emissions, air toxic emissions that can lead to public health events as respondents were describing, electricity production obviously has significant effects, home heating.

“What Director Kaufman concludes in this regard is oil and gas—the industry—in this regard is not unique and shouldn’t be treated as such.

“I think that’s the approach that the commission takes when it reads the statute as a whole, as it’s supposed to do. Its job is to regulate the oil and gas industry, taking into account all relevant factors, including the public health, environmental and wildlife impacts we’ve been discussing today, but not to do so in a way that imposes a standard that the industry, no matter how carefully regulated, couldn’t meet.

“What the respondents are saying, and I think she said it again during her argument, is that the commission has been misapplying its mandate since 1985, which is quite remarkable to assume that the general assembly aware of the commission’s actions over that time—and the commission has been subjected to significant oversight—[and] it has never once suggested that the commission should order a moratorium on new oil and gas permits or change the standard under which it regulates.”

Justice Marquez interrupted Yarger to ask a question.

“Counsel, I have just one quick question for you and that is to throw the question that she posed. Does the commission have the authority to authorize drilling where there is information that such drilling does harm public health? And how do we tie that to protecting public health?” Justice Marquez asked.

Yarger responded: “And that’s why I pointed the Court to that citation 1103 in the Administrative Record. “What the commission can’t do—in fact, it has to consider these public health impacts. In fact, right now the commission is revisiting its setback requirements for precisely that reason. Because it wants to revisit the literature and the technical and other aspects of the problem to ensure that its requirements are at the forefront of the industry. And to be clear the commission has always been at the forefront. The last 10 years it’s been a model for other states and it’s been a model for the federal government.

“So what it can’t do, Justice Marquez, is adopt the no harm or zero-harm or zero-adverse impacts standard that respondents are urging on the Court. What it must do is consider public health and safety, consider environment, consider wildlife and ensure that its regulations—considering those factors and the best available science—protect public health, safety and the environment,” Yarger replied.

With that, Yarger yielded to the Court. It was at the precise moment when the clerk’s countdown clock had ticked off the Solicitor General’s remaining time to 0:00.

“Thank you,” Chief Justice Coats said. “We appreciate the arguments of both counsel. The case is going to stand submitted.”


You can view the entire 60 minutes of oral arguments in front of the Colorado Supreme Court in case number 17SC297, the Martinez case, below. [Video begins at 25:15 count].

Outside the courthouse following the Supreme Court’s hearing of the Martinez case oral arguments, the pro-112 supporters had gathered with a megaphone. Some were holding “Yes on 112” signs.

This Was the Scene at the Colorado Supreme Court during the Martinez Case Oral Arguments - Oil & Gas 360

This was the scene outside the Colorado Supreme Court after the Martinez case oral arguments – Photo: Oil & Gas 360

No precise answer is forthcoming as to when the Colorado Supreme Court is likely to issue its decision on the Martinez case, but estimates from some people leaving the courtroom this week fell generally in the six months to 12 months range.

A reporter was overheard talking with an onlooker. “The best cases are ones where both sides have a very compelling argument,” the reporter said. The man seated beside her summed up the case like this: “I think one side has a compelling argument and the other side has a lot of money.”

In the meantime, in less than three weeks Colorado voters will have voted on Proposition 112. More ‘Yes” votes will mean voters wish to place a de facto drilling ban on the oil and gas industry in the form of half-mile setbacks that would essentially ban the use of the privately owned surface acreage beneath which the bulk of Colorado’s oil and gas assets lie. Mail-in ballots began arriving in voters’ mailboxes this week.


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