Colorado Battle Over Local Control of Oil and Gas Drilling Far From Over

More than a year after Colorado Gov. John Hickenlooper struck a deal that averted a nasty ballot-issue battle over local control of oil and gas drilling, the issue is far from resolved and may in fact be headed back to the same thorny political place next year.

Citizen-activist groups are again threatening to gather signatures for a ballot question in 2016 that this time would call for an outright ban on hydraulic fracturing in the state, even as the Colorado Supreme Court on Monday agreed to decide appeals of two lawsuits challenging citizen-driven fracking bans in the cities of Longmont and Fort Collins.

In Fort Collins, a college town of more 150,000 people 65 miles north of Denver, the high court’s decision to hear the city’s appeal was welcomed. Voters approved a five-year moratorium on the controversial process of fracking in 2013, but a Larimer County District Court judge struck it down last year.

“The Supreme Court’s decision to hear Fort Collins’ appeal is a positive development that will result in a much quicker decision from the courts on the important issues addressed in this appeal,” Fort Collins Deputy City Attorney John Duval said.

The Colorado Oil and Gas Association, an industry trade group, sued both Fort Collins and Longmont, where voters approved a fracking ban in 2012 and a Boulder County District Court judge later struck it down. The industry’s position, backed by state regulators, is that Colorado law preempts any local attempts to regulate oil and gas drilling.

Hickenlooper’s compromise last year was with U.S. Rep. Jared Polis, a Boulder Democrat whose own property was impacted by drilling operations and who was therefore financing two controversial ballot questions to transfer some regulatory control away from the state and into the hands of local governments.

The 11th-hour deal led to Polis pulling his financial backing for the ballot questions and Hickenlooper signing an executive order forming a 21-member task force of prominent Coloradans to draft a set of recommendations to hopefully quell growing public angst over the impacts of drilling in neighborhoods around the state.

Colorado Oil and Gas Conservation Commission (COGCC) Director Matt Lepore, head of the state’s chief oil and gas regulatory agency, said recently that draft local-control rules born of the governor’s task force process will be released soon. The rules will define what constitutes a “large-scale oil and gas facility” as well as set up a process whereby companies must register with towns and start consulting on drilling sites well before seeking state approval.

Asked if he thought the new rules, which he hopes to have finalized and approved by the end of the year, will appease citizen groups and possibly avoid another ballot battle next year, Lepore was philosophical.

“This is a continuing journey. The governor’s task force was actually a really good process because everybody had a seat at the table. We had a neutral contingent of distinguished Coloradans, and they obviously became the swing voters,” Lepore said.

“They heard from everybody and they heard all sides of this issue and at the end of the day they charted a course for us that maybe leaned a little bit more toward the status quo than some of the local governments would have liked, but at the same time it was clear that those clamoring for the greatest change probably don’t represent the majority opinion.”

Lepore added there will be flexibility in the new rules to allow for differences of opinion among elected local officials who may vary widely on how stringently to control drilling operations, but some activists say the new rules may actually make the situation worse.

Karen Dike, a Longmont resident and spokeswoman for Coloradans Against Fracking (CAF), says requiring towns to do advance planning with oil and gas companies still doesn’t actually allow those communities to deny mineral-rights holders the ability to extract their product.

“To me, that says that towns are actually going to have to plan where they’re going to put this heavy industry and give first right of refusal to the oil and gas industry to be in every single community and every single town,” Dike said. “That doesn’t do anything for local control. Nothing at all.”

CAF, a coalition of 40 citizen activist and environmental groups, has a larger goal of enacting a statewide ban on fracking, a process that’s used in more than 90 percent of drilling operations and involves the high-pressure injection of millions of gallons of water, sand and chemicals deep underground to free up more oil and gas.

Gov. John Hickenlooper, speaking Tuesday on public radio in Colorado Springs, said he thinks the Colorado Supreme Court will decide in favor of mineral-rights owners, not the cities where surface-rights owners prevailed.

"I expect they will recognize that people's private property can't be taken by government without some kind of compensation,” Hickenlooper said. “If Longmont or Fort Collins want to ban fracking permanently or for a period of time, the people that have reserves should be compensated, just like if government takes someone's land and they want to put a road on it.”

But Fort Collins environmental activist Gary Wockner questions the appropriateness of Hickenlooper predicting how his own Supreme Court appointees will rule. He argues that fracking takes away resident’s property values, health, safety and quality of life.

“If Gov. Hickenlooper wants to talk about ‘takings’ and ‘compensation,’ then by all means the Supreme Court should consider it both ways,” Wockner said.

However, Doug Flanders, director of policy and external affairs for the Colorado Oil and Gas Association, also predicts the Supreme Court will side with his organization and conclude that state law trumps local regulation.

“We look forward to once again having the Supreme Court put further clarification that the ban implemented in Longmont and that the Fort Collins’ moratorium are preempted by current law and are thus illegal,” Flanders said in a prepared statement, adding that his organization “will continue to do the difficult and unsexy work of finding reasonable and workable solutions with our friends and neighbors throughout the state.”

One of the driving forces behind last year’s deal between Hickenlooper and Polis was the fact that the Democratic governor was seeking reelection in the midst of a Republican wave and that Sen. Mark Udall, also a Democrat, was also facing a tough fight. It was feared by some Democratic analysts that the local-control ballot questions would bring an influx of pro-energy, pro-GOP campaign money into the state and thereby jeopardize both Hickenlooper and Udall.

Hickenlooper won reelection, but Udall was defeated by Republican Cory Gardner despite what became known as the “Grand Bargain” between Polis and Hickenlooper. Now Democratic Sen. Michael Bennet is also facing a tough reelection battle next year in a swing state that could determine the makeup of the U.S. Senate.

Asked last winter if the Grand Bargain was worth it, despite the political heat he took from his own liberal base, and also what he thought of the recommendations made by the Governor’s Oil and Gas Task Force, Polis at the time indicated his displeasure.

“Coloradans deserve better, and I ask Gov. Hickenlooper to finally hear their pleas,” Polis said in an email statement via a spokesman. “We can and we must make the real changes needed to solve the problem of industrial drilling facilities being placed mere feet away from homes and schools. It's unacceptable for fellow Coloradans to be treated as collateral damage when we have the technology and planning tools to protect families and still develop our domestic resources.”