The Colorado Supreme Court on Monday reversed a lower-court decision that sought to reshape the way oil and gas drilling permits are issued in the state. The unanimous decision, a victory for the oil and gas industry, means state regulators will not be required to place public health and safety or environmental protection above other standards before approving new permits.
In 2013, now-18-year-old Xiuhtezcatl Martinez of Boulder joined forces with four other teens in petitioning the Colorado Oil and Gas Conservation Commission to halt permitting “unless the best available science demonstrates, and an independent, third-party organization confirms, that drilling can occur in a manner that does not … impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health, and does not contribute to climate change.”
The commission’s decision to decline to adopt such a rule set off years of intense legal battles in what became widely known as the Martinez Case. On Monday, they culminated in the high court’s much-awaited decision.
Martinez and environmental groups such as Colorado Rising gathered in the Capitol Monday morning. When the ruling was posted, initial disappointment quickly turned into defiance.
“We expected this,” Martinez told The Indy. “To have this case concluded feels like we are ready to move forward. This is just the chance to prove that we need a complete restructuring of the system in place because it is currently not written for the best interests of the people and the communities.”
Colorado Petroleum Council Executive Director Tracee Bentley called the ruling “positive for all Coloradans.”
“The court was right to deny a single out-of-state interest group — one that advocates for ending all energy development across the country — the ability to rewrite our state’s laws,” Bentley said in a prepared statement. “This attempt to advance their extreme agenda into other states and against other industries would have put hundreds of thousands out of work and drain state and local coffers for education and other basic services.”
And Dan Haley, president of the Colorado Oil and Gas Association, said in a statement that the unanimous ruling “upheld the Colorado way of doing business, which is to consider several different interests, including fostering the development of oil and natural gas while also protecting our health and safety.”
In its ruling, the justices named three primary reasons for overturning the Appeals Court decision that had sided with Martinez.
The justices stated they would be “limited and highly deferential” in their review of an agency’s rule-making process, and added that the commission was already working with the Colorado Department of Public Health and Environment. The justices also wrote that by law, the commission cannot condition each new drilling permit on its impacts to public health and the environment because the commission is “required to foster the development of oil and gas resources, protecting and enforcing the rights of owners and producers, and in doing so, to prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare, but only after taking into consideration cost-effectiveness and technical feasibility.”
In essence, the court affirmed the commission’s current practice of balancing environmental and health concerns with industry interests in deciding whether to issue a new permit. This process has grown increasingly contested over the last few years as oil and gas operations clashed with a growing Front Range population and more research showing the environmental and health hazards of drilling.
In November, Colorado voters rejected a ballot measure that sought to significantly rein in new oil and gas operations by imposing a 2,500-foot drilling setback. Monday’s court’ ruling was the second major setback for environmental activists within a few months.
Having exhausted their options in the courts and at the ballot box, the plaintiffs are now turning to the legislature and are banking on Democratic lawmakers’ promises to make health and environmental concerns a priority. Their ask: Rewrite the rules governing the COGCC.
“We call on Governor Polis to put a pause on all new drilling and permitting until the legislature can modernize the laws to deal with clear and present threat that horizontal drilling and fracking in neighborhoods poses to public health and safety,” Colorado Rising communications director Anne Lee Foster said in an email to reporters minutes after the ruling. “To this day the COGCC has never turned down a permit. We implore our lawmakers to act swiftly to prevent another tragedy, like the deadly Firestone explosion, from happening again.”
While Gov. Polis has stopped way short of announcing a halt on the permitting process, he did indicate that the laws governing the COGCC need to be reviewed.
Monday’s decision, he said in a statement, “only highlights the need to work with the Legislature and the Colorado Oil & Gas Conservation Commission to more safely develop our state’s natural resources and protect our citizens from harm. I’ve made transitioning to renewable energy a top priority because it is the best way to protect Coloradans’ health and safety, reverse the harmful effects of climate change that threaten our economy and our way of life, and boost our state’s economy by creating green jobs that can never be outsourced.”
Initial signs from lawmakers also seemed to lean that direction.
“The Supreme Court interpreted the law wrong today, but we’re going to do everything we can to make it right,” said Rep. Jonathan Singer, D-Longmont. “We probably would have gone back to the legislature to clarify things in law anyway, and so we’re going to get rid of that conflict of interest. We need to make sure health and safety are always prioritized above everything else.”
Sen. Mike Foote, D-Lafayette, tweeted: “While the just-announced Martinez decision is disappointing, it provides us at the (legislature) an opportunity to finally put health and safety first with oil and gas. I am working on a bill to do exactly that.”
Added House Speaker KC Becker, D-Boulder: “Communities in every corner of our state want to know that their health and safety are being prioritized when it comes to oil and gas operations. This ruling puts the decision back into the hands of lawmakers to take action and we are committed to addressing this concern this legislative session.”
Currently, state law gives the oil and gas commission a mandate to foster “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.”
How to define that “balance” was at the center of the case, as became evident when the Supreme Court heard oral arguments in October 2018.
“I am not sure we are all on the same page as to what ‘balancing’ means,” Justice Richard Gabriel then told Colorado Solicitor General Fred Yarger, who made the case for the attorney general at the time, Cynthia Coffman.
Oil and gas companies have drilled more than 56,000 wells in Colorado, with thousands more planned. When considering where to drill next, many nationally based energy companies consider both the price of oil as well as operating costs and regulatory burdens in each state.
Bentley, of the Colorado Petroleum Council, said, “We are confident in Colorado’s energy future and the ability of the Colorado natural gas and oil industry’s ability to continue to reshape the global energy balance, fueling an American manufacturing revival and leading the world in environmental progress.’
Alex Burness and Lena Novins-Montague contributed to this report.