Martinez v. Colorado Oil & Gas Conservation Commission

The Colorado Court of Appeals ruled that the Colorado Oil and Gas Conservation Commission (COGCC) had incorrectly concluded that a proposed rulemaking sought by six children was outside its statutory authority. The proposed rulemaking would have required COGCC to deny drilling permits unless “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.” COGCC determined—and a district court agreed—that the rule was outside its statutory authority because it would have required readjustment of the balance between oil and gas production and public health, safety, and welfare required by the Oil and Gas Conservation Act. The Act declares that it is in the public interest to “[f]oster 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.” The appellate court said that “[i]nterpreting the phrase ‘in a manner consistent with’ as a balancing test disregard[ed] the plain meaning of the phrase,” which “denotes more than a mere balancing.” The court concluded that the statute provided that promotion of oil and gas development was in the public interest “when that development is completed subject to the protection of public health, safety, and welfare.” The court said that other sections of the Act were not contrary to this interpretation and that the interpretation was supported by the “evolution” of legislation regulating the oil and gas industry. The appellate court also said the administrative record would not support an affirmance of COGCC’s decision on other grounds such as the need for other COGCC priorities to take precedence over the proposed rulemaking or COGCC’s reference to the proposed rule’s impermissible delegation to third parties. One judge dissented from the majority’s conclusion that the statutory scheme required consideration of public health, safety, and welfare “as a determinative factor,” noting that the language relied on by the majority was in the Act’s “legislative declaration,” which the dissenting judge said should not have overridden language in other sections of the statute.