Front Range oil, gas lawsuit could have Routt County implications | SteamboatToday.com

Front Range oil, gas lawsuit could have Routt County implications

State commission suing Longmont over industry regulations

— 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