Colorado communities and the fossil fuel industry clashed Tuesday in a Supreme Court standoff that ultimately could change how state regulators handle decisions on allowing increased oil and gas production near people.
A coalition of municipal, environment and health groups urged the seven Colorado Supreme Court justices to uphold a lower court ruling requiring the Colorado Oil and Gas Conservation Commission to ensure the protection of the environment and people as a precondition — a first test that must be met — before issuing permits enabling more oil and gas drilling.
Industry attorneys, backed by Colorado Attorney General Cynthia Coffman, argued for a balancing of interests, which in recent years grew into an intensely contested process as oil and gas operations have collided with Colorado’s Front Range population growth and house-building boom.
No decision is expected for months.
For years, the oil and gas commission interpreted its orders from state lawmakers as the balancing of industry interests with protection of public health and the environment.
But in March 2017, the Colorado Court of Appeals decided — in the so-called Martinez case brought by a group of teenage environmental activists — that the commission, rather than balance, must prioritize health and the environment. The fossil fuel industry has been fighting this case for years and petitioned for the Supreme Court to review it, which justices at the start of this year agreed to do.
Multiple legal briefs have been filed. The justices on Tuesday heard oral arguments and asked questions, aimed at helping them reach a decision.
Facing Colorado Solicitor General Fred Yarger, who made the industry case for the attorney general, Justice Richard Gabriel asked for an interpretation of the word balancing.
“I am not sure we are all on the same page as to what ‘balancing’ means,” Gabriel said.
Yarger said: “There are all kinds of ways this ‘balancing’ occurs” depending on specific drilling site conditions. Yarger cast the case as a matter of deference — the established practice of courts giving executive-branch agencies the benefit of the doubt when they carry out their statutorily set duties as prescribed by lawmakers.
Opposing attorney Julia Olson asked the justices to focus on the central question they identified in the case: whether the Colorado Oil and Gas Conservation Commission erred by misinterpreting its mission as “balancing” interests, instead of ensuring protection of public health and the environment.
“I agree there is deference to the commission to make findings,” but not deference in interpreting their statutory mission, Olson told justices. The oil and gas commission “has no authority to ‘balance,’ ” if that means allowing health or environmental harm, she said. “The statute is clear that oil and gas development in the state cannot harm public health, safety and welfare … an unequivocal mandate.”
Colo AG’s solicitor general argues court must give broad deference to reasonable COGCC action. Communities’ attorney argues case is matter of statutory interpretation and whether COGCC erred in interpretation that allows ‘balancing’ rather than making sure no harm
— Bruce Finley (@finleybruce) October 16, 2018
Yarger countered that statutory language and regulatory precedent defines the commission’s job “taking into account all relevant factors” involved in producing fossil fuels. “What it must do is consider public health and safety, consider the environment, consider wildlife,” he said.
Determining the extent to which state government must protect health and the environment before allowing increased oil and gas drilling will shape the future of Colorado towns and cities. Oil and gas companies have drilled more than 56,000 wells and plan tens of thousands more depending on factors such as the price of oil and costs of operating in Colorado compared with other parts of the country.
Climate change and ballot measures
This legal battle is playing out at a moment of heightened worry about climate change linked to increasing use of fossil fuels, which when burned emit heat-trapping greenhouse gases that cause higher temperatures. The United Nations-backed Intergovernmental Panel on Climate Change last week issued a global consensus report, based on thousands of scientific studies, warning that if humans don’t shift much faster off fossil fuels toward renewable energy they will face more monster storms, extreme droughts, ruinous wildfires and flooding as sea levels rise.
President Donald Trump has been trying to pull the United States back from international efforts to address climate change that were set out in the Paris agreement.
— Bruce Finley (@finleybruce) October 16, 2018
Colorado residents also face an election ballot measure next month that, along with high court review of the Martinez decision, will determine the regulatory landscape for future oil and gas production in the state. The measure, Proposition 112, would require bigger buffer “setbacks” of 2,500 feet between fossil fuel facilities and houses, schools and water sources. (Industry groups are backing Amendment 74, which would change the state constitution to require government to compensate property owners for any action that reduces their property value — which could be used in case bigger setbacks prevent new drilling near people.)
Gubernatorial candidates Jared Polis and Walker Stapleton oppose the setbacks measure.
As the Supreme Court justices began their hearing Tuesday afternoon, Colorado Petroleum Council executive director Tracee Bentley issued a statement strongly backing the balancing approach that the commission used for years in handling oil and gas industry requests.
“Now, a single out-of-state interest group — one that expressly advocates for ending all energy development across the country — wants to rewrite Colorado’s laws, put hundreds of thousands out of work, and drain state and local coffers for education and basic services in order to advance their extreme agenda into other states and against other industries,” Bentley said.
“This case has dragged on for nearly five years, and we believe enough is enough. We are confident the Colorado Supreme Court will uphold the plain language of the statute and turn back this out-of-state assault on Colorado’s businesses and government once and for all.”
But local government leaders say they are counting on the high court to uphold the Martinez decision.
“It’s hard to predict how the COGCC would respond if the Supreme Court upheld the Court of Appeals ruling, but it would be an important statement about the importance of public health, safety, and welfare that we hope would make a difference in practice,” said Kim Sanchez, Boulder County’s chief planner.
“It could change significantly how COGCC processes applications, causing that agency to provide greater scrutiny of how oil and gas operations affect public health. If public health concerns come first — versus simply being a factor in a balancing equation — industry may have to implement measures that prove public health is paramount and not affected by oil and gas operations.”
Ruling could change decision-making process
The oil and gas commission over the past year continued to issue permits allowing companies such as Anadarko and Noble Energy to drill new wells, some of them controversial as residents object to industrial operations inside communities. The industry activity sustains jobs and brings tax benefits.
Commission member Erin Overturf, leaving the court hearing, said “there is the potential” in this case to change how the body makes its decisions.
State lawmakers charged the oil and gas commission with fostering “responsible, balanced” development, production and use of oil and gas “in a manner consistent with protection of public health, safety and welfare, including protection of the environment and wildlife resources.”
This matter arose in 2013 when Xiuhtezcatl Martinez, of Boulder, and other teenagers asked the Colorado Oil and Gas Conservation Commission to consider a new rule. They proposed that Colorado not issue any new permits for oil and gas drilling “unless the best available science demonstrates, and an independent third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife and land resources, does not adversely impact human health and does not contribute to climate change.”
When commission officials in 2014 declined to adopt a rule, the teenagers appealed, backed by the Oregon-based group Our Children’s Trust, which has pushed for better environmental and health protection in 44 states — and won.
This long legal battle over how state regulators interpret Colorado’s oil and gas laws, as more wells are drilled, “has raised questions about whether our political institutions inadequately represent communities,” said Martinez, now 18, posing for photos outside the courtroom Tuesday. His contention? “Absolute failure.”
