Colorado Supreme Court reverses impact analysis requirement ruling

Jan. 15, 2019
The Colorado Supreme Court reversed a lower court’s decision that would have required the Colorado Oil & Gas Conservation Commission to consider potential health and climate impacts before authorizing more exploration and production. The suit was filed after COGCC rejected a late-2013 petition asking it to reject applications for new drilling permits unless they did not pose a human health or climate threat.

The Colorado Supreme Court reversed a lower court’s decision that would have required the Colorado Oil & Gas Conservation Commission to consider potential health and climate impacts before authorizing more exploration and production. The suit was filed after COGCC rejected a late-2013 petition asking it to reject applications for new drilling permits unless they did not pose a human health or climate threat.

The rule the petitioners proposed would have, among other things, kept the commission from issuing any drilling permits unless the best available science demonstrated—and an independent third-party organization confirmed—that drilling would occur without impairing Colorado’s atmosphere, water, wildlife, and land; adversely affecting human health; and contributing to climate change.

The state supreme court agreed on Jan. 14 with the commission’s initial findings that it did not have this authority and was working already with the Colorado Department of Public Health and Environment (CDPHE) to address such concerns. The Denver District Court concurred with COGCC’s stand, but a division of the state’s appeals court reversed the district court’s ruling in a split decision.

The supreme court said that it reached its decision for three primary reasons:

• A court’s review of an administrative agency’s decision whether to engage in rulemaking is limited and highly deferential.

• COGCC correctly determined that it could not adopt the rule that the petitioners proposed because of language in the Colorado Oil and Gas Conservation Act.

• COGCC, when it declined the rulemaking request, relied on the fact that it was already working with CDPHE to address concerns underlying the proposed rule, and that other COGCC priorities took precedence.

Oil and gas groups in the state welcomed the high court’s decision. “The court was right to deny a single out-of-state interest group—one that advocates for ending all energy development across the country—the ability to rewrite our state’s laws,” said Colorado Petroleum Council (CPC) Executive Director Tracee Bentley. “This attempt to advance their extreme agenda into other states and against other industries would have put hundreds of thousands out of work and drain state and local coffers for education and other basic services.”

CPC is a division of the American Petroleum Institute which, with the state of Colorado, petitioned the high court last year to review the case. “This case has dragged on for over 5 years and it’s time to focus on uniting to encourage energy development in the United States, and, specifically, in Colorado,” Bentley said.

“The Supreme Court’s interpretation of the act will continue to allow for development, while also protecting our environment,” said Colorado Oil & Gas Association Pres. Dan Haley. “As Coloradans, we value the environment and our member companies are committed to health and safety. Those who filed this lawsuit have said they want to ban oil and natural gas development in Colorado, so we’re happy to see the Supreme Court strike down this extreme effort and shortsighted agenda.

“While the current regulatory structure can be an arduous process for our companies, Colorado serves as a national model for oil and natural gas regulatory oversight,” Haley said.

Contact Nick Snow at [email protected].