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Colorado: Jurisdiction Battle Over Fracking Unfolds

With at least two cities having passed ordinances banning hydraulic fracturing (fracking) until local rules for it can be established, state legislation has been proposed (SB 88) to reiterate that the Colorado Oil and Gas Conservation Commission (COGCC) has jurisdiction to oversee the practice by oil/gas exploration and production (E&P) companies.

A showdown between the state and the county/city governments could develop in the weeks ahead unless something is worked out, as was hinted by Gov. John Hickenlooper in his state of the state address last month (see Shale Daily, Jan. 17). SB 88 is slated to be debated in a state legislative committee on Thursday, at which time some opponents are predicting it will be voted down.

The COGCC holds responsibility for oversight of E&P activities and it is supporting the proposed legislation that would clarify its authority to the exclusion of local government. In the meantime, the county lobbying organization, Colorado Counties Inc., has vowed to fight the measure. A separate proposal by local governments (HB 1277) would do the opposite of SB 88 and reinforce the local government's role in the land-use and other permitting for oil/gas fracking.

SB 88 aims at eliminating any local control over oil and gas activities, according to the Colorado Municipal League. The League is opposing the bill.

Discussions are ongoing between the oil/gas industry and the local government sector. Representatives have agreed that before any legislation is passed, the two sides are going to attempt to work out some sort of agreement, an official with the county government association told NGI's Shale Daily Tuesday, adding that no oil/and gas legislation is likely to get out of the legislature until after that agreement is reached.

"We're hoping to allow all of the proposed bills to be introduced, then have the discussions, and then...have serious discussions about how local government and the industry can all work today," said the counties spokesperson, adding that Colorado has a long history of oil gas development.

Introduced by state Sen. Ted Harvey, SB 88 is before the Senate Local Government Committee, chaired by Sen. Joyce Foster, a Denver Democrat. Its title is "Preempt Local Regulation of Oil and Gas Operations."

According to a bulletin in the Municipal League's Jan. 23 Statehouse Report, the bill is "aimed at radically limiting or completely extinguishing local government authority over one class of industrial land use: oil and gas operations." Garfield County Commissioner John Martin, however, believes the bill is little more than a restatement of existing law.

The legislation and the action it has prompted are in response to recent moves by two Colorado cities to place moratoriums on the use of fracking within their local boundaries (see Shale Daily, Jan. 13). Lawyers already have warned the two cities -- Commerce City and Colorado Springs -- that it is questionable whether local governments can regulate the fracking process or the chemicals used in it, but they can regulate fracking through environmental rules.

The local government interests are attempting to make the fight nonpartisan, at least on their side, noting that elected officials from all parties view the new state legislative proposal as overreach by state officials. Local regulations have been challenged in court, with a decision in one federal court rendered in favor of the cities. A second case is pending.

NGI's Shale Daily contacted both the Colorado Counties Inc. and Harvey's office regarding the proposed bills, but neither organization had a spokesperson available to comment on the latest developments.

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