On January 23, 2020, the Environmental Protection Agency (EPA) and the Department of the Army (Corps) finalized anticipated revisions to the Navigable Waters Protection Rule defining the scope of waters subject to federal regulation under the Clean Water Act. The revisions follow the dictates of President Trump’s February 28, 2017 Executive Order 13778: “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.”
The Second Trip to the Colorado Supreme Court
No other state has a provision in its constitution like the Colorado Taxpayer Bill of Rights (“TABOR”). The TABOR measure amended Article X of the state’s constitution and restricts tax revenues and spending at all levels of government. The provision prevents tax increases without voter approval and prohibits state and local government from spending revenues collected under existing tax rates without voter approval if revenues grow faster that the rate of inflation and population growth. Tax revenues in excess of the TABOR limit must be refunded to taxpayers. The impact of the provision has been significant. Since 1992, tax authorities have refunded over $2 billion to the taxpayers.
New “Serious” Classification for Nonattainment For Ozone
On December 16, 2019, the U.S. Environmental Protection Agency (EPA) announced a final rule to reclassify the Denver Metro/North Front Range ozone nonattainment area from Moderate to Serious nonattainment under the Clean Air Act. The area covered embraces all of Adams, Arapahoe, Boulder, Denver, Douglas, and Jefferson counties as well as the southern portions of Larimer and Weld counties.
Trial Court Absolves ExxonMobil
On December 10, 2019, following twelve days of trial and testimony, Judge Barry R. Ostrager of the Supreme Court of the State of New York, New York County, denied the State of New York’s claims that ExxonMobil engaged in securities fraud by either violating the Martin Act or Executive Law 63(12). New York had claimed that ExxonMobil failed to make proper public disclosures related to how ExxonMobil accounted for past, present and future climate change risks.
Short-term risks of exposure can include headaches, dizziness, and respiratory, skin and eye irritation
Building on an earlier assessment released in February 2017, the Colorado Department of Public Health and Environmental released a state-funded study on October 17, 2019 titled: “Human Health Risk Assessment for Oil & Gas Operations in Colorado.” A peer-reviewed article summarizing the study was published in the Journal of the Air and Waste Management Association.
A Court Order Halting Agency Actions Would Prevent Any Oil and Gas Permitting for Months While the Commission Promulgates Revised Regulations
On October 8, 2019, a citizens group based in Broomfield, Colorado, filed suit in Denver District Court requesting a Court order for an immediate stay of all actions by the Colorado Oil and Gas Conservation Commission (“COGCC”) involving “permitting of any drilling, pooling, and spacing units until the COGCC rulemaking is completed.”
Case of First Impression Overturns Mined Land Reclamation Board Ruling
On July 25, 2019, the Colorado Court of Appeals reversed a ruling of the Colorado Mined Land Reclamation Board (“MLRB” or “agency”) which had authorized a second period of temporary cessation for a uranium mine. The Court in Information Network for Responsible Mining, Earthworks, and Sheep Mountain Alliance v. Colorado Mined Land Reclamation Board was asked to determine if the agency properly authorized a “second period of temporary cessation” which would allow the mining permit issued by the MLRB to remain in effect.
Affected by a local government just compensation action? Your remedies have now changed significantly. The Supreme Court on June 21, 2019 overturned 35 years of precedent. In Knick v. Township of Scott, Pennsylvania the Court held that you can now take your federal takings claims pursuant to 42 U.S.C. § 1983 directly to federal court without exhausting state court remedies.
On January 23, 2019, Wildgrass Oil and Gas Committee (reportedly an anti-fracking group but also an organization that includes mineral owners in the Wildgrass subdivision in Broomfield, Colorado), filed suit in federal court in Denver challenging, on federal constitutional grounds, that portion of the Colorado Oil and Gas Conservation Act (C.R.S. 34-60-116) (the “Act”) that allows the Commission to “force pool” the development of oil and gas resources.
There are several online resources available to track the regulatory activities of the current federal administration, including various federal government agency websites. The two sites which I and others often turn to for comprehensive and easy-to-use online access for tracking the current state of federal deregulatory efforts are the sites produced and maintained by the law schools at Harvard College and New York University.
In a unanimous decision which resolved more than five years of dispute, the Colorado Supreme Court on January 14, 2019 upheld the decision of the Colorado Oil and Gas Commission (COGCC) which had refused to engage in rulemaking proposed by environmental groups. Led by the so-called teenage activist Xiuhtezcatl (pronounced Shoe-Tez-Caht) Martinez, the activists proposed a rule that would have conditioned all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment. Responding to the rulemaking petition which was originally submitted in 2013, the COGCC said the rulemaking was beyond its statutory authority; on appeal, the district court agreed with the agency; and then the Court of Appeals, in a split decision, reversed.
On August 16, the Colorado Air Quality Control Commission set a hearing to consider establishing a new Regulation Number 20 to adopt specific provisions of the California low emission vehicle (LEV) rule for model year 2022 and newer light and medium duty vehicles. The Division’s proposed rule will not include a Zero Emissions Vehicle (ZEV) mandate and has no impact on heavy-duty vehicles or non-road (construction and agricultural) equipment.
A recent analysis by the Colorado Oil and Gas Conservation Commission (“COGCC”) shows that increasing the current regulatory setback of 500 feet to the 2500-foot setback proposed in Initiative # 97 would prevent oil and gas development on 85% of the non-federal land surface in the state.
On Wednesday, July 18, 2018, Governor Hickenlooper of Colorado issued an Executive Order directing the Colorado Oil and Gas Commission (COGCC) to act to “plug, remediate, and reclaim” orphaned oil and gas wells and sites. Of the over 50,000 oil and gas wells in the state, the COGCC is currently tracking 262 orphaned wells and 373 associated well sites that require remediation and reclamation.
The U.S. is projected to produce more crude oil than any other nation, including Saudi Arabia and Russia. The July 10, 2018 forecast from the U.S. Energy Information Administration (EIA) predicts that, in 2019, U.S. crude oil production will grow to 11.8 million barrels a day.
On June 11, 2018, the U.S. District Court of the Southern District of Georgia issued a preliminary injunction preventing implementation of the U.S. Environmental Protection Agency’s 2015 Waters of the United States (WOTUS) rule in 11 states including Georgia, Alabama, Florida, Indiana, Kansas, Kentucky, North Carolina, South Carolina, Utah, West Virginia and Wisconsin. The court held that if the WOTUS rule became effective the states would suffer irreparable harm in both a “loss of sovereignty and unrecoverable monetary losses.”
In a trio of case opinions issued on May 29, 2018, – all written by Chief Justice Nancy Rice who will retire in June – the Colorado Supreme Court ruled against the arguments of insurance companies.
About the only thing that stakeholders agree on is that the risk assessment saga in Colorado means one thing – more study is needed. On March 27, 2018, the latest in a series of health risk studies was published by the Colorado School of Public Health at the University of Colorado Medical Campus. Using air emissions data taken from within the 500 foot regulatory setback requirement for homes near wells, the study concludes that people living in close proximity to oil and gas wells are subject to an increased risk of developing cancer.
In an unpublished opinion on March 21, 2018, the Ninth Circuit Court of Appeals affirmed the trial court’s dismissal of a lawsuit citing the application of CERCLA’s petroleum exclusion. The Court held that the site investigation at a former gas station did NOT identify anything other than petroleum or fractions thereof. Consequently, the Plaintiff did not plausibly allege any CERCLA “hazardous substances” were present at the site. The case was dismissed.
On April 2, 2018, the EPA announced the results of its updated Midterm Evaluation (MTE) determination related to greenhouse gas (GHG) emissions standards for cars and light trucks for model years 2022-2025. The agency stated that the current standards are not appropriate, and that it will work with the National Highway Traffic Safety Administration to set a notice and comment rulemaking to set new standards.
Authorized by Congress in 2012, the EPA’s Electronic Manifest System (e-Manifest) will become effective on June 30, 2018. When they register, generators, transporters, and receivers of hazardous wastes will be able to use this system to facilitate the electronic transmission of the uniform hazardous waste manifest form. States must adopt the provisions of the final rule in order to enforce them under state law and to maintain manifest program consistency.
On March 22, 2018, the Colorado Court of Appeals held that the Colorado Oil and Gas Conservation Commission’s authority to undertake unannounced, warrantless inspections (i.e., administrative searches) at oil and gas sites does NOT violate the U.S. or Colorado constitutions.
House Bill 1071, if enacted as written, will obviate the need for the Colorado Supreme Court to resolve the dilemma caused by the Colorado Court of Appeals opinion in the Martinez case. As described in earlier Spencer Fane posts, that appellate decision effectively elevated the protection of public health and the environment over the interests of mineral rights owners and developers. The issue before the Colorado Supreme Court is whether the current statute dictates that the Colorado Oil & Gas Conservation Commission (COGCC) implement a statutorily directed balancing act without giving priority to any particular interest.
On February 13, 2018, the Colorado Oil and Gas Conservation Commission approved new rules to require the industry to track the location of oil and gas pipelines. The new rules stem from an explosion in Firestone, Colorado caused by a leaking pipeline that destroyed a house and killed two people on April 17, 2017. That disaster triggered a massive public outcry, directives from the Governor, and now significant revisions to state regulations.
On January 29, 2018 the Colorado Supreme Court agreed to hear the appeal of the Martinez case. The state’s high court will decide whether, in the agency’s review of oil and gas permit applications, the Colorado Oil and Gas Conservation Commission (“COGCC”) must elevate “public health and the environment” over other factors identified in the agency’s organic statute.
As stated here in an earlier post, the Martinez decision, if upheld by the Supreme Court, has major implications for all fossil fuel as well as hardrock mineral development in the state of Colorado.
On May 18, 2017, the Colorado Attorney General filed an appeal with the Colorado Supreme Court seeking to overturn the recent 2-1 decision of the Colorado Court of Appeals which arguably conflicts with the long-standing interpretations embraced by the Colorado Oil and Gas Conservation Commission (“OGCC”) related to its organic statute.