The Elbert County Oil and Gas Interest Group (ECOGIG) Page
Jan 18, 2012
Jill and Jim Duvall, Co-coordinators
(303) 646-3202
Here is a portion of an article from the Crested Butte News:
County gets win in gas litigation
District Judge Stephen Patrick handed down his response to Gunnison County’s motion for summary judgment and a cross-motion in the lawsuit filed by SG Interests last June.

To SG Interests’ claim that the county is preempted in regulating areas of industry already regulated by the state and federal governments, Judge Patrick says, “There is no express or implied preemption.”

“The Court is persuaded that [Gunnison County v. BDS International] is still good law and has not been limited or reversed by subsequent cases or statutory changes,” he says in his opinion, referring to the 2003 case involving the county that dealt with a similar preemption question.

Patrick gave one win to SG in reprimanding the county for failing to follow its own regulations related to the amount of time it has taken to process permits, which the county acknowledged.
On the question of operational conflict, which could be a pair of regulations that cannot be reconciled, Patrick said there is no operational conflict in the county’s regulations as a matter of law, but added that a hearing will be necessary on SG’s claims that an operational conflict does exist.

Another part of the order that could serve as a major win for the County is Judge Patrick’s ruling that the “Recovery of technical or expert fees for review of technical permit applications does not constitute an exaction or charge... a tax or a contravention of the County’s statutory authority.” The order also leaves the door open for SG, or another operator, to challenge the cost of the fees or the need for the services.

The important finding is that the judge said that state regulations (pushed heavily by the COGCC and the oil industry) are not necessarily "preemptive." This means that the county can make its own requirements, as long as they don't obstruct the state's interests. The judge felt that as long as the county's need to control land use and protect public health and safety harmonizes with state regulations there is not an inherent conflict--meaning that state regulations do not automatically preempt county authority AS THE COGCC AND THE INDUSTRY ARE CLAIMING.

Here is a related, interesting commentary from Sonia at "What the Frack?!"--the Arapahoe county group similar to ECOGIG. It is a long read but has some great points and information.

Goliath versus David: David wins for all of us on Jan 3, 2012 !

In 2006, David Baumgarten, the County Attorney for Gunnison County, won a landmark case for county rights to mitigate harm from oil and gas extraction through local rules. Then, in 2009, he and another county attorney wrote a legal overview paper of Colorado case law regarding oil and gas extraction, "Preemption is Not Assumed", outlining the continuing legal force of case law supporting county rights to mitigate harm. They asserted in this overview that judicial rulings show that Colorado local governments cannot entirely "materially obstruct" the interests of the state regarding oil and gas extraction, but that local governments have the clear right to create rules and ordinances governing how and where such extraction can be done, as long as those ordinances and rules "materially harmonize" with the overall state goal of extraction.

In the meantime, COGCC and industry have been extremely active in our state, continuing to assert "state preemption", i.e., the supposed superior right of the state to promote oil and gas extraction, insisting that this right trumps the rights of local governments to zone and contain harm of industrial oil and gas development, in all but a few minor areas. As oil and gas applications have recently multiplied at a meteoric rate, with the prospect of fracking the Niobrara shale in Colorado for natural gas and for oil, industry is launching a huge wage of applications that move oil and gas extraction operations right into city limits and populated areas. The state oversight agency, the Colorado Oil and Gas Conservation Commission (COGCC) and the industry association, COGA (Colorado Oil and Gas Association) have launched an agressive united campaign that supports the removal of any obstacle to swift and aggressive extraction of oil and gas wherever there might be prospect of it.

Meanwhile, with the game changing intrusion of the relatively new (about 7-10 year old) process of horizontal fracturing ("fracking"), with its immensely higher heavy industrial operations and use of extraordinary quantities of water to extinction, its use of a much higher number and volume of toxic chemicals, and increasing reports of water contamination, serious public health and safety impacts, and significant impacts to quality of life and property values, local governments in Colorado have been scrambling to determine the prospect of harm and their ability to contain it, as this process moves right into towns and cities, within 100- 350 ft of residences and human activities.

As this fact finding and rulemaking process has been unfolding at breakneck speed for local governments in Colorado, COGCC and COGA have been very busy inserting themselves into those deliberations. To this end, the COGCC and industry have been appearing at every venue where local governments are considering the creation of or the strengthening of their oil and gas rules and ordinances, to protect their populations' health and safety, zoning, and property values. The COGCC and COGA have not only been strongly asserting the "preemption doctrine" at these venues (the supposed superior right of the state to promote oil and gas extraction), they have been issuing threat of litigation if local governments do not abandon efforts to write protective rules and ordinances that go beyond the specific (and inadequately protective) terms of COGCC regulations !

Despite the overt conflict of interest and inappropriateness of a state oversight agency, COGCC, engaging in strong arm lobbying for the private profit interests of industry and against the rightful responsibilities and needs of local governments, this intimidation campaign has had huge impact on Colorado cities and counties. For example, in Arapahoe County, it wholly succeeded in persuading the majority of the County Commissioners to abandon the newly written rules for oil and gas extraction that the county had produced over many months of consideration through the staff of the Planning Department, public input hearings and written submissions, and meetings of the Planning Commission!

Other local governments, more apprised of the stakes and hidden costs to their area and/or more protective of their rights of local government self determination, such as Colorado Springs, Commerce City, Longmont, La Plata county, enacted moratoriums that would allow them more time for reviewing impact facts and legal options for mitigating harm. Those local governments that have attempted to hold on to their rights of self determination were vindicated on January 3, by a court case in Gunnison County.

On January 3, 2012, Gunnison County won litigation in a suit brought by SG Interests (oil and gas company), vindicating the rights of Colorado local governments to assert their responsibilities and rights to mitigate harm from oil and gas extraction !

David Baumgarten, Gunnison County Attorney, was the attorney for the Board of County Commisisioners of Gunnison County, in this suit brought by SG Interests, Ltd (oil and gas operator), alleging that the county's oil and gas rules go beyond the preemptive regulations of the state (COGCC's rules) and represent material obstruction of their company's right to extract and the state's interest in the accomplishment of that extraction (i.e., that the county had overstepped their legal rights because state regs preempt the county's ability to write rules in an area where only the state has the right to regulate).

In fact, the judge ruled that "the state's rights interest in oil and gas actions is not so dominant nor do the interests of state and county oil and gas activities conflict as to the impliedly preempt county authority to regulate the development and operation of such activities." The judge further noted that "An operational conflict between county regulations and state law exists when the local regulation materially impedes or destroys the state interest" and that "A county regulation is in operational conflict on its face only when no possible construction of the regulation can be harmonized with the state regulatory scheme..." and that any assertion of operational conflict would need to be determined through evidentiary hearing (not by simple claim of preemptive rights). The ruling also acknowledged county rights to local recovery of technical or (consultant) expert fees for review of technical permit applications.

THIS IS A HUGE WIN FOR THE COLORADO PUBLIC AND ITS LOCAL GOVERNMENTS, ACKNOWLEDGING THAT "PREEMPTION IS NOT ASSUMED". In effect, local governments can proceed to argue that closed loop systems (that capture all gases and emissions), sound barriers, non-toxic frack fluids and other mitigating measures do not present "material obstructions" to the state's interest, but rather that they "materially harmonize" the local government need to control land use and protect public health and safety with the state's interest in oil and gas extraction.

Why have you not read about this huge win in the Denver Post? In your local paper? Indeed: find out why and ask for it to be covered!

Is your local government county attorney aware of this ruling? Have they informed your local council members and county commissioners? Have they informed the public about this critical development? Indeed: find out and ensure that your elected officials are fully updated and understand the implications.

Have our our elected officials been apprised of this important development, as they begin to consider bills on fracking and oil and gas related issues? Indeed: find out and ensure that they are fully updated and understand the implications!


And thank David Baumgarten for his continuing efforts and victories in defending public rights and interests !

Sonia Skakich-Scrima, What the Frack?! Arapahoe