The District Court for Larimer County, Colorado has struck down a voter-approved ordinance of the City of Fort Collins that adopted a five-year moratorium on hydraulic fracturing. The ordinance was passed at the general election on November 5, 2013 and challenged by the Colorado Oil and Gas Association (COGA). The court issued an Order granting COGA’s motion for summary judgment on August 7, 2014.
The court held that although home-rule cities like Fort Collins have broad power regarding matters of local concern, the fracturing ban was preempted by the state Oil and Gas Conservation Act, C.R.S. §§ 34-60-101 et seq. The court found implied preemption of the ordinance because the ban would substantially impede the state’s significant interest in fostering efficient and equitable oil and gas production. The court found the ordinance was not a permissible regulation of fracturing, but a total ban on use of hydraulic fracturing technology, which is used in “virtually all oil and gas wells” in Colorado. The court also held that the ordinance would interfere with fracturing regulations adopted by the Oil and Gas Conservation Commission under the Act.
The decision is significant because of the efforts by activists to use local land use controls to ban the construction of oil and gas wells using hydraulic fracturing technology. Preventing local jurisdictions from adopting their own rules (or outright bans) will help regulations be consistent at least within each state. Concentrating regulation at the state level allows a reasonable amount of experimentation across various jurisdictions, without subjecting the oil and gas industry to excessive regulatory splintering. There will undoubtedly be additional litigation in Colorado as the issue makes its way up through the court system, and in other states where activists or local political officials are able to successfully adopt local bans.