Judge overturns Fort Collins, Colorado, fracking ban

Houston (Platts)--8Aug2014/317 pm EDT/1917 GMT


For the second time in two weeks a state judge in Colorado has overturned a city's attempt to regulate hydraulic fracturing within its borders.

In a Thursday decision in the District Court of Larimer County, Judge Gregory Lammons ruled that the city of Fort Collins' five-year ban on the use of fracking and the storage of fracking waste was pre-empted by the state's Oil and Gas Conservation Act.

Lammons' ruling comes in a case brought by the Colorado Oil and Gas Association, following a vote last November in which voters called for the city to impose a five-year moratorium on fracking and disposal of fracking waste within the city's boundaries.

On July 24, District Judge D.D. Mallard of the Boulder County District Court overturned a fracking ban that the city of Longmont had instituted, ruling that it was pre-empted by the Colorado Oil and Gas Conservation Act, which gives the state primary authority over oil and gas operations.

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The Fort Collins decision also come as Colorado's political, business and civic leaders are grappling with a host of issues arising from the growing phenomenon of oil and gas drilling being conducted close to cities and towns.

On Wednesday, Governor John Hickenlooper announced the creation of an 18-member task force to examine the issues and to recommend solutions to the state legislature.

Hickenlooper's actions came as part of a deal with environmental groups and community advocates to drop two statewide ballot initiatives that would have increased municipalities' power to regulate oil and gas operations.

As part of that deal, state officials also agreed to drop a lawsuit the state had filed against the city of Longmont, challenging that municipality's oil and gas drilling regulations.

In his decision, Lammons granted COGA's motion for summary judgment, while denying a similar motion filed by Fort Collins' attorneys.

The ruling was "a clear and unequivocal victory for Coloradans," COGA President Tisha Schuller said in a statement.

Schuller said Lammons in his ruling "went even further than previous court rulings," saying plainly that Fort Collins' ban "substantially impedes the state's significant interest in fostering efficient and equitable oil and gas production."

Unlike in the Longmont case, where the judge stayed his order pending appeal, Lammons instead chose to "simply to dismiss the ban outright," Schuller added.

"The message is unmistakable. Colorado's communities, through tough state regulations and flexible local authority, already have the tools and ability to regulate oil and gas activity to meet their local needs," she said.

Barbara Green, an attorney for Fort Collins, declined to discuss the decision, saying it was up to city officials to decide what to do next.

Fort Collins' mayor and city attorney did not immediately reply to attempts to contact them for comment.

In last November's election, Fort Collins voters passed the five-year moratorium on fracking of wells within the city's boundaries. COGA attorneys had argued that the moratorium amounted to a ban on drilling, since fracking is used with virtually all wells in Colorado.

In his ruling, Lammons agreed with COGA's arguments, finding that the municipal ordinance improperly forbids a practice that is specifically allowed under state law and therefore the local regulation "must fail."

--Jim Magill, jim.magill@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com

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