More Local Government Control Over Oil and Gas Operations? Colorado House Says No.

Over the past several years there has been an ongoing debate on whether local governments have the authority to limit or even ban oil and gas operations. In 2012, residents of the City of Longmont voted to approve a ban on hydraulic fracturing within city limits. Similarly, in 2013, Fort Collins voters approved a five year moratorium on fracking within city limits. The Colorado Oil and Gas Association challenged both bans, and the cases reached the Colorado Supreme Court. A recap on the case history and oral arguments can be found in a prior blog, “State or Local for Colorado?” A decision is expected from Colorado’s high court in 2016.

The most recent battle between state and local control of oil and gas operations was fought in the Legislative branch. On March 11, 2016, Representatives Mike Foote, Su Ryden, Jessie Ulibarri and Matt Jones of the Colorado House of Representatives (“House”) introduced House Bill 16-1355 (“HB 1355”) in an attempt to provide local governments with control over the location of oil and gas facilities. HB 1355 declares that “governing bodies of local governments are in the best position to determine the appropriate locations for oil and gas facilities and will properly balance . . . the effects on public health, wildlife, and the environment.” The Colorado Oil and Gas Conservation Commission (“COGCC”) currently has authority over the siting of oil and gas facilities in all jurisdictions in Colorado. HB 1355 states that “statewide siting rules provide an ineffective protection for the public . . . [and] local governments are in the best position to determine the appropriate locations for oil and gas facilities.” Although the bill recognized the existing authority of the COGCC, it emphasized that “the oil and gas industry is not exempt from local governments’ authority to control the siting of oil and gas facilities through existing zoning and land use authority just as they do for every other industry.”

In an attempt to gain more supporters of HB 1355, several last minute amendments were made to the original bill. The original bill proposed an addition to Colorado statutes that would require an operator to “ensure that the location of oil and gas facilities complies with city, town, county, or city and regulations.” The proposed addition to the statute authoritatively stated that “nothing in this section impairs or negates the authority of local governments to regulate the location of oil and gas facilities.”

It became clear that the House would not pass a bill providing local governments with such overarching authority to regulate the location of oil and gas facilities, especially with the Longmont and Fort Collins cases pending before the Supreme Court. Accordingly, the morning of the vote, HB 1355 was amended to remove the language giving local governments broad authority to regulate the location of oil and gas facilities. Consequently, the amended HB 1355 merely restated the current law that oil and gas facilities may be regulated by local governments under current zoning regulations.

Colorado Governor John Hickenlooper urged the House not to pass HB 1355, stating his preference that the Legislature wait until the Colorado Supreme Court issues decisions on the pending cases. Ultimately, on April 4, 2016, the watered down version of HB 1355 failed to make it out of the Democratic-controlled House.

Even though HB 1355 was a failed attempt by the Colorado Legislature to provide local governments with the power to regulate oil and gas operations, its introduction is yet another example of the sentiment of many Coloradans that local municipalities should be able to limit or restrict oil and gas operations.
A copy of HB 1355 can be found here.