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Recently Enacted Fracking Ban in Colorado Challenged, Highlighting Divide Between State and Local Governments on Energy Production

On December 17, 2012, the oil and gas industry filed a lawsuit to overturn the recent ban on hydraulic fracturing (“fracking”) approved by citizens in the town of Longmont, Colorado. The lawsuit comes just weeks after the town of Longmont, approximately 30 miles north of Denver, voted to amend its City Charter to ban hydraulic fracking within its City limits. The potential environmental impacts of fracking, the authority to regulate the practice and related energy production activities, and the power struggle among the federal government, states, and localities in the current regulatory vacuum has generated a hotly contested nationwide debate.

The Colorado Oil and Gas Association (“COGA”) contends the City’s ban is illegal because it denies mineral owners the right to develop their property and blocks operations that state laws otherwise allow. COGA v. City of Longmont, 2012-cv-960, Weld County, District Court (Greeley). COGA wants to overturn the City’s attempt at an end-run around state law permitting the practice. The State of Colorado and its Governor, John Hickenlooper, support the oil and gas industry’s efforts to overturn the ban but have not officially joined in the lawsuit.

The process of “fracking” involves the injection of significant quantities of water, sand and chemicals deep underground to loosen and extract oil and gas reserves tightly held in deep bedrock shale and sand formations. The ban adopted by the City of Longmont also attempts to prohibit the storage of fracking waste in the city.

In a pair of cases decided on the same day twenty years ago, the Colorado Supreme Court previously ruled against municipalities attempting to ban fracking. Board of County Commissioners of La Plata County v. Bowen/Edwards Assoc. Inc., 830 P.2d 1045 (Colo. 1992); Voss v. Lundvall Brothers, Inc., 830 P.2d 1061 (Colo. 1992). The Court held that, inasmuch as natural gas reserves do not conform to municipal boundaries, a zoning ordinance that totally banned drilling within a local government’s borders would be preempted because it would conflict with the state’s interest in fostering efficient development and production of oil and gas reserves. The Court, however, also held that Colorado’s Oil and Gas Conservation Act, which does not contain an express supersedure clause, does not preclude local municipalities from regulating districts within which gas drilling may occur. State lawmakers have previously established the Colorado Oil and Gas Conservation Commission to simultaneously regulate and promote development of oil and gas resources in the state.

On February 12, 2013, members of Spencer Fane’s Environmental Practice Group from the firm’s Denver, Kansas City, and St. Louis offices, addressed emerging developments in hydraulic fracturing and other related clean water and storm permitting issues in a complimentary webinar entitled “Navigating Uncertain Waters, Regulating Developments in Clean Water Act Enforcement, Stormwater Permitting, and Hydraulic Fracturing”. Click here to listen to the recording.