Colorado Supreme Court Affirms COGCC Role In Fostering Oil and Gas Development

On January 14, 2019, the Colorado Supreme Court issued an opinion in Colorado Oil and Gas Conservation Commission (“COGCC”) v. Martinez, No. 17SC297, clarifying the role of the COGCC in implementing the Colorado Oil and Gas Conservation Act (the “Act”). The Court had granted certiorari to determine whether the COGCC had “misinterpreted” its statutory authority under the Act “as requiring a balance between oil and gas development and public health, safety, and welfare.” The Court’s opinion confirms the common sense result that the COGCC is required “to foster the development of oil and gas resources” while “prevent[ing] and mitigat[ing] significant adverse environmental impacts . . . but only after taking into consideration cost-effectiveness and technical feasibility.”

The Martinez lawsuit began in 2013 when Boulder, Colorado teen Xiuhtezcatl Martinez and a group of teenage Colorado citizens requested that the COGCC halt the issuance of any new drilling permits until studies from the best available science could demonstrate that the drilling did not pose a threat to human health or contribute to climate change. After COGCC denied the request, Martinez and the group appealed the decision in July 2014 to the Denver District Court. In February 2016, the district court affirmed COGCC’s refusal of the request, but on appeal in 2017, the Colorado Court of Appeals held that COGCC’s refusal was improper under the Act because, as that court reasoned, it requires COGCC to make and enforce regulations “in a manner consistent with” the protection of public health and safety—“a condition that must be fulfilled.” The Colorado Supreme Court’s opinion expressly rejects this reading in favor of one that requires the COGCC to balance various policy goals, including the development of oil and gas resources.

While the Court’s opinion in Martinez is welcome news for the oil and gas industry, it is likely that it will not be the last chapter in this story. Legislation to codify the holding of the Colorado Court of Appeals was introduced in the Colorado General Assembly in January 2018. While that measure was postponed indefinitely by the Senate Agriculture, Natural Resources, & Energy Committee in March 2018, similar measures could be introduced in the future, and may find a more receptive audience in Colorado’s newly-elected General Assembly and Governor. Read the Court’s opinion in full here.