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3 ways of looking at the Colorado Supreme Court’s major oil and gas ruling

Moving forward, will the Martinez decision most benefit the industry or environmental activists? What about both?

A complex network of pipelines, some under construction, links oil and gas wells in Larimer County with Crestone Peak Resources' hub off of Weld County Road in Erie. (Doug Conarroe, The Colorado Sun)
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Monday’s landmark Colorado Supreme Court ruling on perhaps the most closely watched oil and gas case in years was, legally speaking, about language: What does the law tell energy regulators they must consider before issuing a permit?

The court’s conclusion that concerns about public health and the environment do not take precedence over everything else — a ruling that delighted the oil and gas industry and disappointed young environmental activists — upheld the status quo in the state. But the consequences of the so-called Martinez decision will extend far beyond the statute books, especially as Colorado sees increasingly tense fights over oil and gas development. (To first catch up on the basics of the ruling, read our earlier story.)

So here are three ways of looking at Monday’s ruling and what each may mean for the future.

1. This is a big win for the oil and gas industry

Duh, right? But let’s take a moment to consider the threat this lawsuit posed to the industry and the protections the Supreme Court has now affirmed.

The petition that kicked off the lawsuit didn’t just ask state regulators at the Colorado Oil and Gas Conservation Commission to consider environmental impact and public safety when approving new drilling permits — they already do that. It asked them to deny permits unless:

“the best available science demonstrates, and an independent, third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health, and does not contribute to climate change.”

That, at a minimum, would be a very, very difficult requirement to meet. Which means, if state regulators had to adopt this standard, virtually all new oil and gas development in the state would come to a halt. And the young activists who filed the petition way back in 2013 knew that.

“I think our chances are really good of getting … a statewide ban on fracking,” Xiuhtezcatl Martinez, who was only 13 when he filed the petition, said at the time.

But the Supreme Court went in the other direction and concluded that current Colorado law actually requires state regulators to foster oil and gas development in the state, even if there are environmental consequences.

“In our view, this statutory language envisions some possible environmental and public health risks,” the court’s opinion states.

The law says regulators should require that potential environmental damage from drilling be mitigated, the court concluded. But the mitigation requirements should take into consideration, “cost-effectiveness and technical feasibility,” according to the court’s reading of the law.

This is the status quo that so infuriates environmental and health activists. In a statement following Monday’s ruling, Dan Leftwich, one of the lawyers representing Martinez and the other teenage petitioners, said the ruling “gives the authority to the commission to ignore significant adverse impacts to public health, safety and the environment if an operator claims such protections are not ‘cost effective’ or ‘technically feasible.’”

But David Neslin, a former director of the COGCC, said Monday’s ruling is a sign state regulators are doing their job. There have now been four cases involving COGCC actions before the state Supreme Court in the past seven years, and, in all cases, the COGCC’s decisions have been upheld.

The ruling, Neslin said, “confirms that the agency needs to produce energy and protect the environment and that those are complementary.”

This is great news for the Colorado oil and gas industry, which has now survived the second existential threat it has faced in the past three months. In November, voters rejected a ballot measure that would have increased the spacing required around new oil and gas development, something the industry argued would have squeezed it out of the state.

At least for now, it looks to be full speed ahead for a freight-load of permit applications the industry filed in a hurry when the aforementioned initiative made the ballot. There are more than 6,000 permit requests pending for Adams County, alone, and more than 1,000 property owners there have received lease offers, said Sara Loflin, executive director of League of Oil and Gas Impacted Coloradans.

Oil and gas facilities in Weld County on Friday, Oct. 19, 2018. (Jacob Paul, Special to The Colorado Sun)

2. The ruling gives environmental groups new momentum

It’s tempting to view this case as a victory for industry and as a loss for activists. But that’s not how Martinez, among others, sees it.

“I think what’s going to be carried on is that the younger generation is not going to sit on the sidelines,” he said Monday.

Far from being a setback, those who want at least more regulation around fracking see the ruling as a springboard. It clearly spells out, for them, a problem with the law that they want to change.

And that makes it part of a building movement in Colorado to rein in oil and gas activity.

Think about when this petition was first filed. In 2013, the governor, John Hickenlooper, was friendly enough to oil and gas interests that he told lawmakers he once drank fracking fluid. Regulatory bills had a tough time getting passed. The kids who filed the petition couldn’t even drive, much less vote.

Now, Martinez, who is from Boulder, is an internationally known climate activist who is also a plaintiff in a different lawsuit accusing the federal government of failing to protect people from climate change. Martinez said the Colorado lawsuit helped raise the profile of the anti-fracking debate in the state.

Diana Bray, the mother of Emma Bray, another plaintiff in the lawsuit, laughed Monday thinking about how much has changed during the course of the case. Monday was Emma’s first day of classes for the semester at the University of Colorado. She’s a sophomore.

“All of these challenges are essential,” Diana said of the lawsuit’s outcome.

Most significantly for activists now, the legislature, the governor’s office and the attorney general’s office — all the branches in charge of making law, enforcing law and defending law — are controlled not just by Democrats but by Democrats who want to do something about oil and gas regulations.

MORE: Read more environmental coverage from The Colorado Sun.

That’s why Loflin, whose group advocates for tighter rules around drilling, responded to Monday’s decision by saying it “underscores that we need meaningful change and meaningful leadership from the legislature on oil and gas.”

Other anti-fracking groups responded in similar fashion. Leftwich, one of the attorneys on the case, made the demand explicit: Now that the Supreme Court has ruled, the legislature should do what the Supreme Court didn’t.

“While we disagree with the court’s decision, it points to the need for the legislature to amend the statute once again to make it absolutely clear that the protection of public health, safety and the environment is a mandatory condition that must be met before oil and gas permits can be issued,” he said in his statement.

House Speaker Crisanta Duran, left, hands the gavel to incoming Speaker KC Becker on the first day of the 72nd General Assembly on January 4, 2019, in Denver. (Kathryn Scott, Special to The Colorado Sun)

3. All of this will probably be moot in four months

Within a matter of weeks, lawmakers at the state Capitol will almost certainly be debating this issue furiously.

Just on Monday, two Democratic state lawmakers said they are already working on bills that would give health, safety and environmental concerns more weight when the COGCC is deciding whether to issue a permit. The court’s ruling hits pause on those efforts for the time being, said Rep. Jonathan Singer, a Longmont Democrat who is among those looking at new oil and gas legislation. But that pause is only so lawmakers can use the court’s opinion as a study guide moving forward.

“It gives us at least a template to look at to say, ‘what was considered, what wasn’t considered,’” Singer said.

Singer estimated that there are at least six other lawmakers working on the issue. One of those, Sen. Mike Foote, a Democrat from Lafayette, said in a statement Monday that the court’s ruling “gives us at the legislature an opportunity to finally put health and safety first with oil and gas operations.”

House Speaker KC Becker, a Boulder Democrat, has voiced her support for that priority, as has Gov. Jared Polis.

Even new Attorney General Phil Weiser jumped into the debate Monday, issuing a statement where he took a shot at his predecessor’s legal strategy and then vowed to work with both the COGCC and local governments on health and environment protections.

“Before I took office, the Attorney General’s office, representing the commission, pursued an appeal in this case and argued for a more limited vision of its authority than the law provides,” Weiser said in a statement.

And, at the end of his statement, he offered this not-so-cryptic bit of assistance:

“Should the legislature seek to clarify the mandate of the commission, I look forward to working with it.”

So, after a six-year fight, Monday’s Supreme Court ruling only settled the debate for the law as it is currently written. Expect the language to be different by the time the legislature wraps up in May.

Jesse Paul of The Colorado Sun contributed to this report.

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