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Colorado Supreme Court Issues Win for Oil and Gas Industry

The Colorado Supreme Court on January 14 issued an opinion thought to be favorable to Colorado's oil and gas industry.

In Colorado Oil and Gas v. Martinez, the court reversed a split decision of the Colorado Court of Appeals and determined that the Colorado Oil and Gas Conservation Commission properly rejected a rule-making proposal by a group of environmental advocates that would have precluded the Commission from issuing oil and gas well 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."

The Commission has no such express requirement, and the court found that the Commission had no implicit statutory or regulatory authority to condition permitting new oil and gas drilling on a finding of no cumulative adverse impacts to public health and the environment. The court further interpreted the Colorado Oil and Gas Conservation Act to require the Commission to focus instead on fostering the development of oil and gas resources within the state, and in doing so, prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare—but only after taking into consideration overall cost-effectiveness and technical feasibility, under its authority to regulate oil and gas operations.

The court's opinion is already being heralded by members of the oil and gas industry as a victory for Colorado and the promotion of new oil and gas development. The opinion likely also signals a "business as usual" approach to the issuance of permits by the Commission.

Environmental advocates are likely to take the battle to the Capitol, with a sitting Democratic governor and where Democrats now have control of both the State house and senate in the Colorado General Assembly.

While the court's decision focused on the Commission's authority, it remains to be seen whether the opinion will have any resonance outside of Colorado as to whether climate change might be considered a factor in granting individual oil and gas permits.

Copyright © by Ballard Spahr LLPNational Law Review, Volume IX, Number 16


About this Author

Patrick Compton Financial Litigator

Patrick Compton is a trial attorney with a practice focused on complex banking, real estate, and environmental litigation matters.

He represents financial institutions, private lenders, mortgage originators, developers, architects, contractors, governmental entities, and quasi-governmental entities. He has tried numerous cases to verdict and has argued multiple cases on appeal. His combination of industry and trial experience gives Patrick a strong appreciation of the needs of his clients, as well as an understanding of how best to achieve their goals.

Patrick was also one of...

Gary Davenport Energy Resources Attorney
Senior Counsel

Gary Davenport focuses his practice on complex litigation in the commercial, oil, and gas, and securities fields. He has practiced for over forty years and has served as lead counsel in numerous cases in both federal and state courts. Gary has particular experience in litigating cases involving midstream issues with natural gas, including processing and gathering, and royalty cases on behalf of both lessors and lessees. His clients range from Fortune 500 companies to closely held businesses and entrepreneurs.

Gary is also an American Arbitration Association arbitrator and consistently handles mediations and arbitrations. He has deep experience as an arbitrator in complex securities cases and in disputes involving multifaceted oil field issues.

Representative Experience

  • Served as lead counsel in a variety of complex pipeline disputes
  • Litigated a multitude of take-or-pay and last-regulated price cases
  • Served as lead counsel for clients in claims to geologic information
  • Represented a number of Fortune 500 clients in gas processing claims
  • Handled royalty disputes on behalf of both lessors and lessees
Harry Weiss, Ballard Spahr Law Firm, Philadelphia, Environmental Law Litigation Attorney

Harry Weiss is Practice Leader of Ballard Spahr’s Environment and Natural Resources Group, and administers the group’s practice across the country.

He provides an array of clients with compliance advice arising out of new federal and state regulations; assists clients with commenting on new regulatory initiatives; and, most recently, has initiated an appeal to the U.S. Circuit Court of Appeals for the D.C. Circuit on behalf of a recycling client challenging EPA rules concerning the content of fuel for use in residential wood-burning heaters....