Are concerns over climate change sufficient to prevent all new oil and gas development in Colorado? In Colorado Oil & Gas Conservation Commission v. Martinez, the Colorado Supreme Court will decide if language in a statute’s legislative declaration mandates that absolute protection of the public health, safety, and welfare is a precondition to the exercise of private property rights in oil and gas.
In late 2013, several minors, through their legal guardians, filed a petition for rulemaking with the Colorado Oil and Gas Conservation Commission (“Commission”). The minors sought to ban all new oil and gas drilling permits in the State of Colorado unless the Commission could prove that drilling would not impair other resources. Specifically, the minors asked the Commission to adopt a rule that would bar the Commission from issuing:
[A]ny permits for the drilling of a well for oil and gas 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.
In support of their proposed rule, the minors alleged that science “unequivocally shows” that: (1) “hydraulic fracturing is adversely impacting human health and [impairing] Colorado’s atmosphere, water, soil and wildlife resources”; (2) “[c]limate change is already occurring in the [S]tate of Colorado and is projected to significantly impact the state in the future.” In addition, the minors alleged that “[t]he Public Trust Doctrine demands that Colorado act to preserve the atmosphere and provide a livable future for present and future generations of Colorado residents.”
The Commission solicited and received written comments and held a hearing on the proposed rulemaking. At the conclusion of the rulemaking process, the Commission issued an order unanimously denying the petition. The minors then sought judicial review of the Commission’s Order. On February 19, 2016, the Colorado District Court affirmed the Commission’s Order. Martinez v. Colorado Oil & Gas Conservation Comm’n, No. 14CV32637 (D. Denver Feb. 19, 2016) (“Dist. Ct. Op.”). Specifically, the District Court ruled the Colorado Oil and Gas Conservation Act (the “Act”), C.R.S. §§ 34-60-101 to 34-60-130, requires the Commission to balance the need for energy development with other state interests. Dist. Ct. Op. at 6–8. The District Court reached this conclusion by looking at the legislative declaration in the Act, wherein the Colorado General Assembly declared it “to be in the public interest to”:
Foster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources[.]
C.R.S. § 34-60-102(1)(a)(I). The District Court interpreted this provision “to require a balance between the development of oil and gas resources and protecting public health, environment and wildlife.” Id. at 6. The American Petroleum Institute and Colorado Petroleum Association joined the Commission as Defendant-Intervenors in the case.
On appeal, the Colorado Court of Appeals, in a 2-1 decision, reversed the judgment of the District Court. Martinez v. Colorado Oil & Gas Conservation Comm’n, No. 16CA0564, 2017 WL 1089556 (Mar. 23, 2017). In so doing, the Court of Appeals ruled the legislative declaration contained in C.R.S. § 34-60-101(1)(a)(I) does not require the Commission to balance oil and gas development “in a manner consistent with” the protection of public health, safety, welfare, etc. Id. at *4. Instead, the Court of Appeals interpreted the phrase “in a manner consistent with” as meaning “subject to,” thereby subordinating the ability to develop oil and gas resources to the protection of public health, safety, welfare, etc. Id. at *5 (“This interpretation supports our conclusion that the language of the Act does not create a balancing test weighing safety and public health interests against development of oil and gas resources, but rather, the Act indicates that fostering balanced, nonwasteful [sic] development is in the public interest when that development is completed subject to the protection of public health, safety, and welfare, including protection of the environment and wildlife resources.”).
Based on its interpretation, the Court of Appeals instructed the District Court to remand the case to the Commission so the Commission could reconsider the rulemaking petition. Id. at *8. On January 29, 2018, Colorado Supreme Court granted the Petition for Writ of Certiorari.
Petitioners argue that the Court of Appeals erred because legislative declarations cannot trump the operative provisions of statutes. The contend that under Colorado Law, a legislative declaration or purpose is one available aid in construing ambiguous statutes. See C.R.S. § 2-4-203(1)(g). But if a statute is clear and unambiguous, courts look no further and apply the words as written. The Court of Appeals admitted “the language of section 34-60-102(1)(a)(I) is clear and unambiguous.” Martinez, 2017 WL 1089556 at *4. Thus, Petitioners contend, if the act was unambiguous, as both lower courts found, the court’s only job would be to apply the plain meaning of the statute without resorting to other aids in statutory construction. In short, Petitioners say that the Court of Appeals allowed the tail (i.e., the legislative declaration) to wag the dog (i.e., the operative provisions), which essentially renders it impossible to drill an oil and gas well in Colorado.
Additionally, Petitioners argue that the Court of Appeals erred by interpreting the phrase “in a manner consistent with” in the legislative declaration as being synonymous with the subordinating phrase “subject to.” They assert that the ordinary meaning of “consistent with” means to be “consistent, harmonious or in accordance with” and “consistent” means “compatibility, congruously, in harmony with .…” Webster’s Third New Int’l Dictionary Unabridged 484 (2002) (“Webster’s”). Further, “balance” is defined as “measure[ing] competing interests and offset[ting] them appropriately.” Black’s Law Dictionary (10th ed. 2014). Whereas, “subject to” is “‘subordinate’ and ‘subservient.’” E.g., Stupak-Thrall v. U.S., 89 F.3d 1269, 1285 (6th 1996) (Boggs, J., dissenting) (quoting Black’s Law Dictionary 1287 (5th ed. 1979).
This decision could have a profound impact on mineral estates in Colorado. Under the Court of Appeals’ interpretation, the Commission cannot balance oil and gas development with environmental concerns, but instead must deny all drilling permits unless it is proven that drilling and the concomitant development will have no environmental effects. See Martinez, 2017 WL 1089556 at *5. Because of the burden imposed by the Court of Appeals’ interpretation, it is entirely possible that no new drilling permits will be issued in Colorado.
Christian B. Corrigan is an attorney at Mountain States Legal Foundation (“MSLF”), a public-interest law firm in Colorado that defends private property, free enterprise, and limited and ethical government. MSLF filed an Amicus Curiae brief in support of the Petitioners.