Front Range oil, gas lawsuit could have Routt County implications

State commission suing Longmont over industry regulations

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Oil & gas issues in Routt County

— The Routt County Board of Commissioners could join the city of Longmont in its defense of a lawsuit filed this week by the Colorado Attorney General’s Office on behalf of the Colorado Oil and Gas Conservation Commission regarding Longmont’s efforts to regulate energy exploration.

“Absolutely,” Board of Commissioners Chairman Doug Monger said Tuesday. “There will be a lot of discussion, and we’ll be having some discussion as the suit progresses further whether we or (Colorado Counties Inc.) will want to participate.”

According to a story published Monday in the Longmont Times-Call, the suit is over regulations adopted July 17 by the Longmont City Council that require energy exploration companies to install water-quality monitoring devices and that prohibit surface drilling within residential subdivisions, among other things.

Routt County imposed a water-quality monitoring condition on a recently approved oil well permit for Quicksilver Resources. Quicksilver officials strongly objected to the water monitoring condition, as did the Oil and Gas Commission via a letter from its interim director.

Assistant Attorney General Jake Matter filed the suit against Longmont in Boulder County Court, seeking to kill several of Longmont’s new regulations based on his analysis that they could not be “harmonized” with state regulations that govern oil and gas drilling, according to the Times-Call.

Professor K.K. DuVivier, of the Sturm College of Law at the University of Denver, said she thinks the time is ripe for litigating the tension between local governments and the state with regard to regulating the oil and gas industry.

“Everyone has been saber-rattling for several months,” DuVivier said. Gov. John “Hickenlooper’s task force really didn’t accomplish anything. I think it’s time to make some law.”

If Routt County joined the suit with a friendly (amicus) brief, it would not be without precedent. Routt County was among a number of local governments that filed amicus briefs in support of La Plata County’s successful appeal in 2003 of a lower court ruling in La Plata’s suit against the Oil and Gas Commission. The suit sought to block the amendment of a rule that expanded the Oil and Gas Commission's authority over oil and gas permits, and the Colorado Court of Appeals agreed with La Plata’s opinion.

County Attorney John Merrill wrote in an email Tuesday that his office has not heard anything from the Oil and Gas Commission since July 10, when Routt County approved an oil drilling permit for Quicksilver Resources on the condition that the energy company install a groundwater-quality monitoring well in conjunction with the Camilletti oil well planned just north of unincorporated Milner.

That action came despite a last-minute email from Oil and Gas Commission Interim Director Thom Kerr “strongly urging” the commissioners not to apply the condition because, in his judgment, doing so would usurp his agency’s statutory authority.

"Pre-emption" is a term government officials use to describe the Oil and Gas Commission’s stance on local government enforcing terms and conditions on energy exploration companies. In other words, Oil and Gas Commission officials take the position that the state statute empowering their agency pre-empts any local regulations.

However, local governments, including Routt County, have made the case that they have an obligation under state law to protect public health and property by making land-use policy under their zoning regulations. Before voting to approve the Quicksilver permit July 10, Routt County Commissioner Diane Mitsch Bush said she thinks the Oil and Gas Commission does not have an adequate number of inspectors to monitor the thousands of oil wells across the state.

“The agency charged with protecting our air and water quality (in the context of oil and gas exploration) really doesn’t do it,” Mitsch Bush said during the public hearing.

DuVivier, who specializes in energy and mining law, said the state’s budget constraints could be the basis for a viable argument in court. She said the city of Longmont might be able to make the case that the Oil and Gas Commission and the state are unable to protect water quality in the vicinity of oil drilling operations, for example, because they lack the budget to do so.

DuVivier added that in a suit, such as the one filed against Longmont on behalf of the Oil and Gas Commission, the burden of proof is on the party claiming pre-emption.

When Matter wrote in his complaint that Longmont’s oil and gas regulations could not be made to “harmonize” with state regulations, he was referring to a requirement in the state statute. DuVivier said the law requires that if the court finds that the two sets of regulations can be harmonized, the state must allow them to co-exist.

Longmont is among the many Colorado cities that have formed their governments under a home-rule charter instead of adhering strictly to the model of municipal government outlined under the state constitution.

DuVivier said that would be a factor in the lawsuit.

“Colorado is an interesting place in which to have this fight because of the robust laws enabling local governments,” DuVivier said. “Colorado has some of the strongest home rule government in the country. That’s something in Longmont’s favor.”

Monger said he was a little surprised Routt County had not heard back from the Oil and Gas Commission after approving the Quicksilver permit with the water-quality monitoring requirement.

He surmised that the state may have decided to sue Longmont because it has passed formal regulations, as opposed to Routt’s conditions of approval. Longmont also banned surface drilling in residential areas.

“Maybe it’s good it happened to a home-rule city instead of the county, which is an arm of the state,” he said, adding that “case law is made by better case evidence.”

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com

Comments

Eric J. Bowman 2 years, 1 month ago

The voter in me got to wondering why the State's in such a tizzy over such seemingly reasonable requirements as Routt County's. And, wondering why it even falls to local governments to protect drinking water, raising such ire from those whose mission supposedly includes just such protections. So I looked into the COGCC this morning to figure out how a monitoring well can be so "disharmonious" with their regs, and didn't like what I found. We got off on the wrong foot, here:

http://cogcc.state.co.us/General/typquest.html

Get defensive, much? Not only are there strawman questions like #1, but also strawman answers like #6, which expects us to ignore the potential for long-term contamination of aquifers, which hardly exists with residential development (well, not unless those residential developments have oil rigs in 'em, go Longmont). Nice explanation of why the majority of commissioners consists of industry representatives, though... Anyway, the real meat would be the section 300 rules, here:

http://cogcc.state.co.us/RR_Docs_new/rules/300Series.pdf

There are some scary things in there, like 333-d(4)A, which I paraphrase as, "any spilled toxic waste must be properly swept under the rug." Or that the mechanical integrity testing to prove a well isn't leaky is only required once every five years (326), or that those water wells in Hayden don't meet the definition of an "underground source of drinking water" (324A-d).

Or that special protections for specific geologic formations may be waived in their entirety if a producer alleges, not proves, they impede extraction of "their just and equitable share of oil and gas from such formations" (318B-d, 318A(II)-i, 318A(I)-j. Or that disposal wells must be evaluated for hydrocarbon potential, not groundwater contamination potential (317-n).

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Eric J. Bowman 2 years, 1 month ago

Digesting the guts of these rules shows them to be incredibly industry-friendly (confirming my suspicions of regulatory capture), with a big glaring loophole throughout -- permitted, domestic water and agricultural wells outside of residential water service districts are NOT considered "underground sources of drinking water" worthy of protection.

Granted, section 317 requires proper procedures to be followed to avoid groundwater contamination at all times. But, subsection k (as in many places in the document) falls short when things go wrong:

"If alien water is found to be entering the production stratum or to be causing significant adverse environmental impact to fresh water aquifers during completion testing or after the well has been put on production, the condition shall be promptly remedied."

But, nowhere does it mention promptly notifying anyone of such potential contamination events. Nor is there any associated monitoring requirement, to assess whether such incidents caused any contamination. Unless "underground sources of drinking water" are impacted, which has been defined in a way which leaves the folks in Hayden SOL, if the County Commissioners aren't allowed to intervene -- the COGCC has clearly sacrificed rural well-water concerns for the sake of greasing the skids for industry.

Any "disharmony" arises from the fact that, in order to prevent contaminating the proposed monitoring well, Quicksilver would effectively have to follow many of the procedures which apply where there's proximity to municipal water supplies, like pitless drilling, fluids in tanks on well pads, and containment berms (317B-d). Under these rules, probably over 90% of CO (by area) is open for drilling without special considerations pertaining to aquifer contamination.

If We the People succeed on seemingly insignificant requirements like a lil ol' monitoring well in Hayden, industry is left with probably only 10% of CO to despoil at will, because of all of those damned water wells. The only disharmony here, is between the rules as they're written, and COGCC's mission to protect health and the environment.

Perhaps that is what the Attorney General should be prosecuting -- who paid off whom to get well water excluded from the definition of "underground source of drinking water" for example, i.e. influence peddling and regulatory capture at COGCC...

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jerry carlton 2 years, 1 month ago

The majority of politicians are owned by whoever buys them. A term limit of one term for every office in the land might help.

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Scott Wedel 2 years, 1 month ago

Having read the article in the Longmont Times, it looks to me that the legal fight is going to be over the other parts of Longmont's ordinance not related to Routt's conditions. It requires full notice of moving hazardous substances on Longmont streets which looks to me like an easy win for the State since that rule is just for oil and gas industry. They also require horizontal drilling whenever possible that is also an overreach into drilling practices. And so on.

The part of the case of interest to Routt would seem to be able to harmonized with state rules. Seems to me pretty easy to merge local requirements for groundwater testing with state rules since the additional local requirements look to be within accepted industry best practices.

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Steve Lewis 2 years, 1 month ago

Jerry, On the other hand, some do such a good job they run unopposed. Nancy Stahoviak will be sorely missed. How often will you hear that from the opposite party ranks? We disagreed plenty, but I've never seen anyone better prepared every day. This last stretch of her tenure, willing to stand up to the State on behalf of the residents of Milner, is something special. You don't accomplish that kind of representation with big campaign donations. Sometimes you get lucky and elect one or two willing to work their asses off for the little guys.

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