State’s authority affirmed in reversal of three local fracking bans

(Editor’s note: This content is sponsored by Coloradans for Responsible Energy Development (CRED).

Colorado courts have struck down three Front Range fracking bans or moratoriums in recent months, indicating that local communities cannot legally override the state in regulating hydraulic fracturing.

Boulder County District Judge D.D. Mallard threw out Longmont’s ban on fracking in July, and a Larimer County district judge overturned Fort Collins’ five-year moratorium on fracking barely two weeks later. A month later, Mallard also struck down the city of Lafayette’s ban, which was approved by voters in November 2013.

“The message is unmistakable: Colorado’s communities through tough state regulations and flexible local authority already have the tools and ability to regulate oil and gas activity to meet their local needs,” said Tisha Schuller, president and CEO of the Colorado Oil & Gas Association, in the wake of the Fort Collins decision. Her organization sued the city of Fort Collins over the moratorium. “Those that want to tear down our system of regulation or upend the stakeholder process are doing a grave disservice to Colorado’s citizens,” she said.

Longmont, Fort Collins and Lafayette are three of five Front Range communities that had imposed bans or moratoriums on fracking in recent years. The other two are Boulder and Broomfield. (Voters in Loveland rejected a proposed moratorium on hydraulic fracturing in June.) Although Mallard overturned Longmont’s fracking ban, which was approved by voters in 2012, she issued a stay of the order pending appeal, so the ban will remain in effect until the case is heard again.

Similarly, in August, Larimer County District Judge Gregory Lammons struck down Fort Collins’ five-year fracking moratorium, which was approved by voters in 2013. He reasoned that such a ban “is preempted by the Colorado Oil and Gas Conservation Act for two reasons: The five-year ban substantially impedes a significant state interest, and the ban prohibits what state law allows.”

The reversal of those restrictions on energy development in Longmont, Fort Collins and Lafayette underscores two fundamental points: the constitutional right of landowners to develop their own personal property and the state’s authority to regulate an industry of vital economic interest. The latter avoids a patchwork of locally enacted restrictions that could produce enough uncertainty and inconsistency as to discourage future investment in energy development around the state.

Almost all oil and gas extraction in Colorado is achieved with hydraulic fracturing. The vast majority of that production occurs in Northern Colorado, where in Weld County more than 21,000 oil and gas wells out of a state total of 52,417 are located. Last year, the country received almost $150 million in property tax payments – about half of its tax base.

Along with the need for statewide uniformity in regulations, also at issue is the “split estate,” in which one person can own the surface of a plot of land, and another party own the mineral rights below it. Gov. John Hickenlooper’s 21-member task force, announced Aug. 8, will be charged with making recommendations to the state lawmakers on matters such as setback requirements of drilling rigs to occupied areas.

“The conflict between subsurface owners and surface owners … it is in everybody in the state’s interest to find a compromise,” Hickenlooper said.

It is a deeply divided state legislature, however, and if the commission can’t win legislative approval, then advocates for tighter control of oil and gas development will be back with initiatives in 2016, when a presidential election will attract more voters than the 2014 midterm.