Municipalities cannot ban or impose a moratorium on hydraulic fracturing according two companion cases decided by the Colorado Supreme Court.
In the first case, the City of Longmont, a Colorado home-rule municipality, adopted a charter provision that prohibited hydraulic fracturing to extract oil, gas, or other hydrocarbons in the municipality. The Colorado Oil and Gas Association, an industry organization, sued Longmont and obtained an injunction that prohibited Longmont’s enforcement of its charter provision.
In its decision in City of Longmont v. Colo. Oil and Gas Ass’n, 2019 CO 29 (Colo. May 2, 2016), the Colorado Supreme Court considered whether the municipality’s provision was preempted by state law, first determining whether Longmont’s provision concerned a matter of statewide, local, or mixed state and local concern. The court determined that the state’s interest in the efficient and fair development of oil and gas resources in the state suggested that Longmont’s fracking ban implicated a matter of statewide concern. The court further determined that Longmont’s fracking ban had a “ripple effect” that impacted state residents outside the municipality and, thus, that factor also weighed in favor of the state’s interest in fracking. The court did recognize that municipalities such as Longmont traditionally have had the authority to exercise their zoning authority over land where oil and gas development occurs.
Considering all factors, the court concluded that the regulatory matter involved a matter of mixed state and local concern.
Next, the court considered whether Longmont’s fracking ban conflicted with state law. For this analysis, the court considered whether the effectuation of Longmont’s interest would materially impede or destroy the state’s interest. The court ultimately concluded that in its operational effect, Longmont’s provision, which banned both fracking and the storage and disposal of fracking waste with the municipality, materially impeded the application of state law, namely the Oil and Gas Conservation Act, and the regulations promulgated thereunder. The court therefore held that state law preempted Longmont’s ban.
Finally, the court rejected an intervenors’ argument that Longmont’s ban protects the inalienable rights section of Colorado’s Constitution.
In the second case, City of Fort Collins v. Colo. Oil and Gas Ass’n, 2016 CO 28 (Colo May 2, 2016), the court considered whether Fort Collins’ five-year moratorium on fracking and storage of fracking waste within the municipality was preempted by state law. Applying and adopting the preemption analysis set forth in the companion Longmont case, the court determined that Fort Collins’ fracking moratorium rendered the state’s statutory and regulatory scheme superfluous, at least for a lengthy period of time, because it prevented operators who abide by the Oil and Gas Commission’s rules and regulations from fracking until 2018. The court found that, in doing so, the moratorium materially impeded the effectuation of the state’s interest in the efficient and responsible development of oil and gas resources. Accordingly, the court concluded that Fort Collins’ moratorium operationally conflicted with the effectuation of state law and was, thus, preempted.