JURIST Guest Columnist Samantha Peaslee, University of Denver Strum College of Law Class of 2015, explores the recent lawsuits surrounding fracking in the state of Colorado and how the outcome could impact the oil industry throughout the entire state…

Hydraulic fracturing, or fracking, has gained significant media attention over the last few years. Now, it is beginning to gain legal attention as well because of a city called Longmont, Colorado.

Fracking is a process use for extracting oil and gas from tight rock formations. A mixture of water, sand and chemicals is pumped thousands of feet underground then pressurized to fracture rock formations — allowing the release of fossil fuels contained within the rocks. Recently, detractors have brought fracking into the spotlight, fearing the process may be unsafe by causing air and water pollution.

Colorado citizens are among those concerned about fracking. According to the Colorado Oil and Gas Association (COGA), 95% of Colorado’s extraction sites have been fracked. Fracking has gone fairly unnoticed in Longmont until recently when a company wanted to “put a series of wells next to some homes, a middle school and a reservoir.” Now, this city of just 80,000 people is entangled in two lawsuits and is the subject of national scrutiny because of a ban on fracking within the city’s limits.

Colorado Oil and Gas Conservation Commission v. Longmont

The case against Longmont’s ban on fracking is preceded by a lesser-known lawsuit that began a few months earlier. In July of 2012, the Longmont city council passed an ordinance that updated its regulations on oil and gas within city limits. Ordinance O-2012-25 [PDF] (“the Ordinance”) included a minimum set of standards based on state requirements and recommended tougher standards for companies wishing to operate in Longmont. The Ordinance’s tougher standards include an increased setback from occupied structures, more stringent wildlife protections, a drilling ban in existing and planned residential neighborhoods and increased requirements for water-quality testing.

Almost immediately after the city passed the Ordinance the state’s regulating commission for oil and gas, Colorado Oil and Gas Conservation Commission (COGCC), filed a complaint [PDF] against Longmont. COGA, an association of oil and gas companies, soon joined the suit as well. In its complaint, COGCC claimed that Longmont had no authority to enforce the Ordinance’s rules because the COGCC’s authority to regulate oil and gas statewide preempts any local authority.

Colorado Oil and Gas Association v. Longmont

In November 2012, Longmont citizens passed a voter-initiated fracking ban called Resolution R-2012-67 [PDF] (“the Resolution”). The Resolution originated due to safety concerns over fracking in residential areas and worries that the Ordinance did not sufficiently protect against the dangers of the process.

This time, a lawsuit was not filed immediately after the new restriction passed. Instead, the state debated for nearly a month before publicly announcing that it would not file suit against Longmont regarding the ban. However, Colorado offered to support any private entities that chose to do so. COGA filed its complaint [PDF] almost immediately after the state’s announcement. The complaint argued that: (1) the Resolution, like the Ordinance, attempts to regulate technical aspects of oil and gas operations reserved to the state through COGCC and (2) the prohibition on fracking operates as both an illegal de facto ban on oil and gas drilling and an unconstitutional taking of private property without compensation.

State Authority: Should Cities Be Allowed to Ban Fracking?

These cases raise a key question: can Longmont create a ban on fracking using its authority as a “home-rule city” or are city rules for oil and gas preempted by state regulations? Answering this question raises a policy concern about whether a city’s ability to ensure the welfare of its citizens trumps a state’s interest in creating uniform regulations.

Part of the reason that the local versus state government question is such a heated issue in Colorado in particular is that Colorado is home to a number of home-rule cities, including Longmont. Under the Colorado Constitution, home-rule cities are self-governing entities with few exceptions. Longmont argues that fracking regulations do not qualify as one of these exceptions. According to Longmont, a community should be able to balance the right of mineral rights holders to extract natural resources with the health and safety of other residents. The state, Longmont claims, is too far-removed to appropriately balance these interests.

The state argues that, when natural resources are involved, the state legislature gave COGCC the ultimate right to regulate so that consistent rules exist throughout the state. If each individual city could regulate its oil and gas independently, the state would be fraught with varying and inconsistent guidelines.

Unfortunately for Longmont, precedent from the Colorado Supreme Court supports the position that COGCC regulations preempt Longmont’s opposing position. Two cases were decided by the court on the same day in 1992: Bd. of County Comm’r, La Plata County v. Bowen/Edwards Assoc., Inc. and Voss v. Lundvall Bros., Inc. These cases stated that, although legislative intent does not support the COGCC preempting all aspects of local authority, cities cannot ban drilling within their territorial boundaries. COGA claims that fracking bans are effectively bans on drilling because the process is such a crucial part of mineral extraction and, without it, drilling is useless.

Even if the court decides that fracking bans are not de facto bans on drilling, both the COGCC and COGA argue that the bans are still preempted by state regulations. The case of Town of Frederick v. North American Res. Co decided that measures relating to setbacks, noise abatement and visual impacts that go beyond state regulations operationally conflict with the COGCC and are, therefore, preempted by state law. The COGCC and COGA allege that fracking should be considered a preempted aspect of Colorado’s oil and gas industry regulations because the city’s regulations regarding fracking go beyond state requirements — similar to the measures above that were previously reserved to states.

Regardless of what happens in court, the Ordinance and the Resolution have done some good; the COGCC is currently looking at stricter water quality and setback standards based on those adopted in the Ordinance. However, if the Court rules for the COGCC and COGA, more key concerns are raised for Colorado’s other home-rule cities. For example, if Frederick is upheld, cities will have no direct power over the oil and natural gas operations within their boundaries. They would not be able to set standards lower than those imposed by the states, but they would be equally incapable of enforcing regulations stricter than those set by the COGCC. Despite La Plata clearly stating that this was not the legislature’s intent, wouldn’t such a ruling allow all state oil and gas regulations to preempt local ones? Wouldn’t such a result preclude cities from being able to protect the welfare of their citizens, whether it was regarding fracking next to their schools or the protection of local water sources?

But, if cities have the last word, could this case spell the end of fracking in Colorado? Colorado waits with bated breath to learn Longmont’s fate — and possibly that of whole state’s oil industry.

Samantha Peaslee is a staff member of Denver Journal of International Law and Policy. She has participated in the Honorable Phillip S. Figa Motions Competition and Negotiations Competition.

Suggested citation: Samantha Peaslee, Home-Rule Cities: The Future of Fracking in Longmont, Colorado, JURIST – Dateline, Feb. 22, 2013, http://jurist.org/dateline/2013/02/samantha-peaslee-home-rule-fracking.php