In efforts to ban drilling, case law on side of oil, gas

FORT COLLINS – Try as they might, Northern Colorado cities that hope to ban oil drilling or hydraulic fracturing can expect little chance of success, according to a review of Colorado case law.

Longmont voters banned fracturing recently, and the Fort Collins City Council gave its preliminary OK to a similar ban earlier this week as anti-fracking fervor rages on along the Front Range. State law, however, pre-empts oil and gas drilling prohibitions, oil and gas attorneys say.

Voss v. Lundvall Brothers, a 1992 Colorado Supreme Court decision that struck down Greeley’s drilling ban, is the case most-often mentioned that makes today’s drilling bans unlikely to succeed.

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In that decision, the justices upheld a lower court’s decision that the Oil and Gas Conservation Act prevented a home-rule city from passing land-use ordinances that ban oil and gas drilling within their boundaries.

The Voss decision, however, left some room for cities to regulate oil and gas drilling when the court wrote that the state constitution “neither commits the development and production of oil and gas resources to state regulation, nor relegates land-use control exclusively to local governments.”

“You can regulate oil and gas development so long as the regulations … don’t conflict with and frustrate the state’s regulatory program,´ said David Neslin, former director of the Colorado Oil and Gas Conservation Commission and partner in the law firm Davis Graham & Stubbs in Denver.

So, what about hydraulic fracturing, or fracking, the controversial technique that involves blasting a drilled hole with water, sand and chemicals?

The most authoritative decision on that question comes from Board of County Commissioners v. Bowen/Edwards Associates Inc. the same day that Voss was decided, Neslin said. The case involved a challenge by Bowen/Edwards Associates to La Plata County’s land-use regulations.

The Supreme Court held that La Plata could not “impose technical conditions on the drilling or pumping of wells under circumstances where no such conditions are imposed under the state statutory or regulatory scheme.”

“A prohibition on hydraulic fracturing is tantamount to a prohibition on drilling,” Neslin said. “Most attorneys who are familiar with Colorado case law on these issues believe that local governments do not have the authority to prohibit hydraulic fracturing, just as they do not have the authority to prohibit drilling.”

Another case, Webb v. Black Hawk, a unanimous state Supreme Court decision this year, further supports the argument that home-rule cities are limited in their authority, according to a recent article written by Neslin.

The case didn’t involve oil and gas interests. Rather, it stemmed from a ban by the gambling city of Black Hawk on bicycling on certain city streets.

The court struck down the ban, noting that Colorado traffic code establishes a broad regulatory framework to ensure consistency and prevent conflicting legislation.

“The same statewide uniformity concerns exist under Colorado law with respect to oil and gas development,” Neslin wrote.

That’s why cities like Longmont, which is being sued by the Colorado Oil & Gas Association, will have a difficult time defending its outright ban, according to Jenna Keller, an attorney for Greeley-based Otis, Coan & Peters.

On the other hand, even if it loses the lawsuit, Longmont could help reshape state law.

A decision in COGA v. Longmont could offer direction for state legislators as they seek to address the city’s concerns, Keller said. And it could settle other lingering questions, as well.

“Any loss by the city of Longmont should pave the way for all local governments on the type of local restrictions and authority that local governments do have on oil and gas matters,” Keller said.

In other words, the court’s decision, whatever it might be, could offer cities a measure of latitude.

Cities also might take solace in the state oil and gas commission’s recent adoption of new rules establishing wider buffers between drilling operations and homes. Those rules go into effect this summer.

In Fort Collins, City Councilman Gerry Horak proposed an ordinance that prohibits new companies from fracking but allow those who already do so within city limits to continue doing so. The council voted in favor of the measure Tuesday night. A second vote is now needed before the ordinance goes into effect.

Horak believes his fracking ban would have a chance if challenged in court.

“Our Colorado Supreme Court has changed views; the U.S. Supreme Court changes views over time,” he said.

Perhaps, but judges are typically reluctant to overturn case law.