Shareholder/attorney in Colorado law firm warns Xiuhtezcatl Martinez’s victory will have tremendous impact on oil & gas development if not overturned. The American Petroleum Institute…will appeal even if the state doesn’t.

Attorney: Overturn justices’ gas ruling, Fears harmful industry impacts by Dennis Webb, April 19, 2017, The Daily Sentinel

RIFLE — A March Colorado Court of Appeals ruling will have a tremendous impact on oil and gas development if not overturned by the state’s high court, an attorney said Wednesday.

“It’s also part of a growing trend where courts are second-guessing (regulatory) agencies,” Mark Mathews, a shareholder in the law firm Brownstein Hyatt Farber Schreck, said at the annual Energy & Environment Symposium, presented by Garfield County and Colorado Mesa University’s Unconventional Energy Center.

A three-judge appeals court panel ruled 2-1 last month that the Colorado Oil and Gas Conservation Commission erred in its rationale for rejecting a rulemaking petition by youth activists. The court took issue with the agency’s longstanding position that it is mandated under state law to balance energy development and protection of public health, safety and welfare.

Rather, the agency is mandated to protect health, safety and welfare as a condition of development, the court ruled in a case involving six Colorado youths. The youths want the gas commission to suspend oil and gas development until it can be shown that it wouldn’t harm health, wildlife and the environment or contribute to climate change.

Mathews said if the ruling stands, it could slow down and perhaps stymie issuance of drilling permits, and perhaps even call into question the legitimacy of existing permits.

“It’s also a rulemaking that I think would take several years,” he said.

The court only found fault with the gas commission’s rationale for rejecting the rulemaking request. It didn’t mandate that the gas commission conduct the rulemaking, or how it should turn out if it occurs, Mathews noted.

“But I think it still has huge implications if it’s not reversed, in Colorado and nationally,” he said.

Gas commission director Matt Lepore, who attended Wednesday’s forum, said the commission has yet to decide whether to appeal the ruling to the Colorado Supreme Court.

“Your reasoning is persuasive, however,” he told Mathews, evoking some laughter from forum attendees.

Mathews said the American Petroleum Institute, which intervened in the case, will appeal even if the state doesn’t.

Mathews was the lead attorney for the Colorado Oil and Gas Association industry group in litigation leading to the Colorado Supreme Court last year rejecting Longmont’s ban on hydraulic fracturing in oil and gas development, and Fort Collins’ five-year moratorium on fracking. The court said those measures were pre-empted by state regulations on oil and gas development.

Mathews said he thinks there are grounds for the state’s high court to reverse the appeals court decision in the youth activists’ lawsuit. He noted that the appeals court judge who dissented in the ruling found that state law mandates that environmental mitigations be balanced with technological feasibility and cost-effectiveness considerations.

Mathews added that traditionally, courts defer to [industry controlled, corrupt] agencies on interpretation of law.

Still, he said, a current trend of “courts second-guessing agencies when environmental impacts are at issue” can’t be ignored.

Mathews said the legal landscape regarding oil and gas regulation is evolving quickly in Colorado, with a lot of questions still to be answered, such as whether shorter moratoriums on fracking, perhaps lasting six months, are legal.

“The fracking battle is far from over” in Colorado, he said. “In fact, I think in some ways it’s just getting started.” 

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