The Denver Post: Hickenlooper orders halts to fight over court oil-gas ruling

Colorado Gov. John Hickenlooper has ordered state regulators of the oil and gas industry not to fight a court ruling requiring protection of public safety, health and the environment by the state as a precondition before allowing drilling.

But Colorado Attorney General Cynthia Coffman on Thursday went ahead and filed a 27-page appeal to the Colorado Supreme Court asking for review of that ruling in the Martinez case.

The issue is whether the Colorado Oil and Gas Conservation Commission will be more protective of people and the environment at a time when industrial operations increasingly clash with Colorado’s booming Front Range communities.  A recent fatal house explosion caused by a severed underground oil and gas industry pipeline has piqued concerns, and Hickenlooper has vowed public safety will be paramount. The court ruling would make the COGCC more protective.

Colorado’s high court in the past has buttressed the power of agencies such as the COGCC to act independently of governors who appoint their members. While the Colorado Department of Natural Resources has administrative authority over the COGCC, state law grants the COGCC independent power to make rules, issue permits and penalize violators.

“We notified the attorney general that we did not want to pursue an appeal of the Martinez case. We believe that the statute governing the commission’s powers does not include the authority to initiate an appeal in this case. However, the attorney general reached a different legal conclusion,” Hickenlooper said in a statement issued after Coffman filed the appeal.

“While we understand and respect the commission’s desire for further clarity from the supreme court, we believe the court of appeals’ decision does not represent a significant departure from the commission’s current approach,” Hickenlooper’s statement said. “The commission already elevates public health and environmental concerns when considering regulating oil and gas operations.”

Hickenlooper staffers later added: “We asked for no appeal because we don’t see the court’s decision as a significant departure from the commission’s current practice.”

The COGCC long has considered public health and the environment when issuing drilling permits. The question is how much, with some municipal leaders and county officials saying safety and the environment are being compromised.

On March 23, Colorado Court of Appeals judges ruled that protecting public health and the environment is “a condition that must be fulfilled” by the state before oil and gas drilling can be done. The COGCC must go beyond balancing industry interests with protection of people and the environment, the judges said, and make sure people and the environment aren’t hurt.

The state oil and gas commissioners on May 1 voted unanimously to fight the ruling. The COGCC commissioners’ rationale in seeking high court review — a request that had to be made by a Thursday deadline extended in response to industry and COGCC motions — was to gain “clarity.” Commissioner Bob Randall, director of the Colorado Department of Natural Resources, said appealing the ruling should not suggest indifference to public safety.

Hickenlooper contends that the COGCC decision was “only advisory” and that the agency lacks statutory authority to challenge a court’s interpretation of its mission.

Late Wednesday, Hickenlooper’s chief attorney Jacki Melmed sent an email to deputy attorney general Laura Chartrand asking state attorneys not to proceed with an appeal of the ruling that reinterprets the mission of the COGCC to do more than merely balance industry interests with public safety and the environment.

Coffman rejected that arguing Hickenlooper is legally incorrect in trying to stop the COGCC.

“I understand that sentiment runs high surrounding oil and gas development in our state, even more so in the wake of the tragic house explosion that claimed two lives,” Coffman wrote in an email to The Denver Post. “This appeal is not intended to be a statement on complex energy policy issues. Rather, it is a legal challenge to a court decision that stands to have a profound effect on regulation and administrative decision-making by government entities.”

Colorado lawmakers created the COGCC as an independent agency charged 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 case arose in 2013 when attorneys for Xiuhtezcatl Martinez of Boulder and other teenagers asked the COGCC 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.”

In 2014, the COGCC held a hearing on that request and then denied it, saying such a rule contradicted and was beyond COGCC authority. The attorneys for the teenagers appealed to Denver District Court. There, Judge Eric Elliff ruled in favor of the COGCC and Coffman. Then attorneys for the teens appealed again, arguing that Elliff misinterpreted the COGCC’s mission and, as a result, erred in denying the proposed rule on drilling.

The appeals court judges agreed. They rule that the COGCC mandate “was not intended to require that a balancing test be applied.” Rather, they wrote, the clear language of the agency’s enabling legislation “mandates that the development of oil and gas in Colorado be regulated subject to the protection of public health, safety and welfare, including protection of the environment and wildlife resources.”

The ruling did not mean that the COGCC had to adopt the teenagers’ proposal to restrict new drilling. It meant the COGCC illegally rejected it and sent the case back to district court. It is the court’s interpretation of the COGCC mission, in the course of that ruling, that has been the focus of controversy.

“The battle over oil and gas on the Front Range is getting bigger and bigger. And if this Colorado Court of Appeals decision is upheld, it will be hard to have any drilling inside Front Range residential areas. That would be a big change,” said Bruce Baizel, energy program director for the advocacy group Earthworks.

Baizel questioned the authenticity of Hickenlooper’s request to halt the appeal. “He has not recognized the community impact, has taken the side of industry throughout,” Baizel said. “He can let Coffman do the dirty work and then say that.”

Colorado Front Range cities and counties, state lawmakers, environment advocacy groups and more than 1,500 residents this week blitzed Hickenlooper with letters, emails and phone calls urging him to accept the appeals court ruling that prioritizes public health, safety and the environment.

The American Petroleum Institute, the oil and gas industry’s largest trade association, has said Hickenlooper would be “well-supported” in a legal fight against the appeals court ruling.

Colorado Oil and Gas Association president Dan Haley on Thursday welcomed Coffman’s appeal of the appeals court decision “that would have far-reaching impacts on oil and gas development and Colorado’s economy.”

The court ruling “disrupts decades of regulatory precedent,” Haley said, interpreting the COGCC’s enabling act as a directive “to balance a variety of development interests including the environment when making decisions.”

“This balancing act in Colorado allows for development and protects our environment,” he said. “Those who filed this lawsuit have said they want to ban oil and gas in our state. That irresponsible position, funded by the same out-of-state groups that have relentlessly tried to ban our industry via the ballot box, must be met head-on.”

A business coalition joined in lauding Coffman. “The attorney general showed real leadership today and the business community is thankful for it,” Vital for Colorado chairman Peter Moore said.

Colorado environment groups condemned the appeal and urged Hickenlooper to do all he can to stop it.

“Coloradans would be shocked to know that their elected officials are actually debating whether or not to prioritize health, safety and the environment when it comes to oil and gas drilling,” Conservation Colorado director Pete Maysmith said.

“We are pleased that the governor doesn’t see merit in appealing this case,” Maysmith said, “but it is essential that he do everything in his power to ensure that his commission follow his legal lead and make it clear to the Attorney General that this case should not be appealed.”