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Colorado Supreme Court Issues Opinion in COGCC v. Martinez

On January 14, 2019, the Colorado Supreme Court reversed the Court of Appeals and issued a unanimous decision in favor of the Commission in Colorado Oil & Gas Conserv. Comm. v. Martinez.  The Supreme Court held that providing for the economical development of oil and gas resources in the State of Colorado and minimizing adverse impacts to public health and the environment are each important goals of the Commission under the Oil and Gas Conservation Act (“Act”).  However, the Court noted that these goals should not be balanced against or conditioned upon each other, but rather should be considered contemporaneously.  As such, the Commission is expected to continue its current practice of considering multiple policy objectives and interests when determining whether to engage in rulemaking. 

Last year, the Colorado Supreme Court granted certiorari to consider whether the Colorado Oil and Gas Conservation Commission (“Commission”) properly declined to engage in rulemaking requesting that the Commission adopt rules preventing the issuance of any new drilling permits “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 making its determination, the Court analyzed the scope of authority granted to the Commission under the Act to regulate oil and gas production.  Specifically, the Act states that “it is 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.” 

The Supreme Court found that this language was susceptible to multiple interpretations.  Accordingly, the Court looked to the Act’s statutory and legislative history to aid in ascertaining the meaning of the language at issue.  In doing so, the Court found the legislature intended “to promote multiple policy objectives, including the continued development of oil and gas resources and the protection of public health and the environment, without conditioning one policy objective on the satisfaction of any other.”  Thus, the Court disagreed with both Petitioners’ and Respondents’ interpretation of this language – a balancing test vs. a condition that must be fulfilled – and held that the intent was to charge the Commission with “minimize[ing] adverse impacts to public health and the environment while at the same time ensuring that oil and gas development, production, and utilization could proceed in an economical manner.”  Thus, the Commission’s role as stated by the Colorado Supreme Court is as follows: to “(1) foster the development of oil and gas resources, protecting and enforcing the rights of owners and producers, and (2) in doing so, to prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare, but only after taking into consideration the cost-effectiveness and technical feasibility.”  Based upon this interpretation of the Act, the Court found that the Commission correctly determined that it could not adopt the proposed rules without violating its charge from the General Assembly in the Act.

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About this Author

David R. Little, Oil and Gas Law Attorney, Steptoe Johnson Law Firm
Of Counsel

David R. Little’s practice focuses on developing solutions to complex legal challenges for his diverse clients.  David represents his clients both in and out of the courtroom, having appeared in trial and appellate courts in Colorado, as well as other states, and federal courts.  He is a seasoned litigator representing clients on matters involving tort, oil and gas, regulatory issues, joint operating agreements, commercial contracts, oil and gas leases, mineral title disputes and royalty payments.  A trusted advisor for his clients, David also provides counseling and...

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Diana Prulhiere Energy Resources Attorney
Member

Diana Prulhiere focuses her practice in the areas of energy and natural resources (oil and gas) law. Ms. Prulhiere regularly assists clients with mineral title examinations, due diligence projects and energy transactions throughout Colorado and Appalachia.  Ms. Prulhiere is active in a number of industry groups focused on enhancing the careers of young professionals and women in the energy industry.

Key Experience

Managed abstracting and title teams to assist clients with development efforts

Undertook mineral and leasehold title examinations and drafted drilling and division order title opinions to assist clients in acquiring and leasing mineral rights

Performed due diligence, undertook curative work and prepared transactional documents to assist clients in various energy transactions

Work Experience

2010   Steptoe & Johnson PLLC

2009-2010   University of Pittsburgh Environmental Law Clinic

2007-2008   Summer Associate, Steptoe & Johnson PLLC

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Associate

Rachael Smith focuses her practice in the areas of energy and professional liability litigation.

While in law school, Rachael worked as a teaching assistant for the Legal Writing department at Colorado Law. In addition, she worked as a student attorney in the Civil Practice Clinic where she assisted indigent clients with a range of civil legal matters. While working in the clinic, Rachael received the award for Excellence in Clinical Education.  Beyond her clinical work, she also served as an editor on the Colorado Law Review.

WorkExperience 

2018   Steptoe &...

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