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Colorado Localities Challenge State’s Authority Over Oil, Gas Production

October 10, 2017

In defiance of state law, Thornton, Colorado has decided to try and restrict oil and gas exploration and development.

Denver suburb Thornton, Colorado has decided to restrict oil and gas exploration and development, opening the local government up to potential litigation over its attempt to contravene Colorado law.

Recent court decisions affirmed the state government has sole authority to regulate oil and gas activities within the state’s borders.

In a May 2016 ruling, Colorado’s Supreme Court affirmed decisions by lower state courts overturning two cities’ fracking bans, ruling against Fort Collins’ five-year fracking moratorium and a voter-driven ban on hydraulic fracturing in Longmont.

Colorado’s high court called the laws “invalid and unenforceable,” ruling state law preempts local ordinances on fracking and oil and gas production. Subsequently, anti-fracking activists failed to get two fracking-focused initiatives on the ballot in hopes of having communities regulate or even ban fracking within their jurisdictions.

Went Ahead Anyway

Despite this history, Thornton’s City Council on August 22 adopted an ordinance exceeding the requirements the state imposes on energy companies exploring or producing oil and gas.

Passed by a 7 to 2 vote, the ordinance requires a 750-foot buffer between wells and homes, far more than the 500 feet required by the state. The ordinance also imposes stricter rules on the management of abandoned flowlines than those laid down by the Colorado Oil and Gas Conservation Council (COGCC), the state agency charged with regulating oil and gas activities.

In addition, Thornton’s rules require drilling companies to maintain $5 million in general liability insurance for property damage and bodily injury. State law requires only $1 million in insurance coverage.

Front Range Revolt

Thornton Mayor Heide Williams, who voted against the oil and gas regulations, says the city has overstepped its authority, telling her colleagues, “We have opened ourselves up to a lawsuit,” according to the Denver Post.

In July, when the city council initially discussed the regulations, the COGCC warned Thornton not to adopt rules that contravene state law.

Thornton is one of several suburbs on Colorado’s “Front Range,” situated on the edge of the hydrocarbon-rich Denver-Julesburg (D-J) Basin along the eastern face of the Rocky Mountains, considering challenging state laws on oil and gas production. The D-J Basin has become one of the nation’s most consistent producers of oil and natural gas.

Other Front Range cities considering local regulations on oil and gas activities include Erie and Lafayette, which are developing plans to require oil and gas companies to map their pipelines throughout their jurisdictions, a proposal the Colorado legislature declined to adopt earlier in 2017.

Says Restrictions Hurt Economy

Tracee Bentley, executive director of the Colorado Petroleum Council, says municipalities that try to impose local oil and gas regulations are setting themselves up for unnecessary, costly failure.

“Colorado has some of the most rigorous oil and gas regulations in the country,” said Bentley. “The courts have clarified on numerous occasions the state alone has the authority to regulate.

“Local governments attempting to prohibit or severely restrict energy development are only hurting the economy and putting taxpayers at risk,” Bentley said.

Craig Rucker, executive director of the Committee for a Constructive Tomorrow, says local governments’ actions to limit fossil fuel production could hurt the constituents they are elected to serve.

“While it is true local governments are closer to the people, they—through grandstanding and old-fashioned throwing their weight around—can harm the people they are supposed to serve,” Rucker said. “Colorado is rich in natural resources, especially hydrocarbons, and elected officials who deny their constituents access to them are jeopardizing the well-being of the people who put them into office.”

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org

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