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Local Control in the US Gaining Steam … Again?

On Tuesday, April 16, 2019, Colorado Governor Jared Polis signed Senate Bill 19-181 (SB19-181) into law.  SB19-181 was a controversial bill as it made its way through the Colorado Legislature, and it is now a controversial piece of legislation.  Indeed, SB19-181 passed the Colorado Legislature strictly along party lines, and it has now pitted some local Colorado communities against the oil and gas industry.

What makes the new legislation so controversial is that it gives local Colorado governments express land use authority to regulate the siting of oil and gas locations and to regulate land use and surface impacts of oil and gas activities.  This authority includes, specifically (and among other things), the ability to inspect oil and gas facilities, impose fines for leaks and spills, and impose fees on owners and operators to cover the costs of permitting, monitoring and inspection.  These new authorities given to local Colorado governments represents a substantial enlargement of authority from the state of play that existed before SB19-181 passed, such that now local governments no longer need to wait for the Colorado Oil and Gas Conservation Commission to first identify specific areas for oil and gas extraction.  According to its legislative declaration, the law is in the public interest to foster the development of oil and gas resources in a manner consistent with the protection of public health, safety and welfare, including protection of the environment and wildlife resources.  As may be evident just from the brief description provided here, the law has been praised by environmentalists and local control advocates, who say it will protect Coloradans health and safety and the Colorado environment more generally, but criticized by industry, who say that it will stunt and/or significantly delay oil and gas development, exploration and production in the state.

What perhaps makes SB19-181 even more intriguing, however, is its place in the past, current and future efforts nationwide to push and pass local control over industry.  One of the first such noteworthy efforts launched in 2014 in Denton, Texas.  When oil and gas companies drilled more than 200 fracking sites in the relatively small Texas town, local residents rallied together in resistance.  They obtained a sufficient number of signatures to put a fracking ban on the ballot, engaged in a spirited campaign to promote the ban and, ultimately, the ban passed with almost 60% of voters in favor.  In early 2015, however, the Texas Legislature passed a bill that preempted the authority of local governments in Texas to regulate a host of energy activities, including fracking.  Denton was then forced to repeal its fracking ban.  (Interestingly, in 2013, the city of Longmont, Colorado embarked on a similar path to ban fracking within its city limits.  With SB19-181, the Colorado Legislature has taken the opposite approach of the Texas Legislature.)

Other states have also been or are currently in the midst of their own local control battles.  In 2018, voters in the Alaska general election voted down Ballot Measure 1, otherwise known as the “Stand for Salmon” initiative.  The measure would have made local permitting processes more stringent for projects with greater potential impacts to salmon habitat, and it would have required state regulators to draft specific scientific standards defining salmon protection and salmon habitat.  This year in Florida, a bipartisan group of lawmakers has introduced proposed legislation that would permanently ban drilling off Florida’s Atlantic coast and request that the U.S. Coast Guard identify specific areas that are prone to oil spill risk.  Finally, in Montana last year, a statewide grassroots group called “Stop I-186 to Protect Miners and Jobs” launched a campaign to halt a new bill that would have forced hard rock mines, in order to be permitted, to provide “clear and convincing evidence” that they would not require perpetual water treatment.  Montana voters ultimately rejected the I-186 bill.

The past few years have seen many efforts to bolster local control over industry activities that affect the environment, safety and health.  For the most part, these efforts, as robust and organized as they might have been, have also largely been defeated.  Time will tell if Colorado’s passage and adoption of a sweeping local control bill over oil and gas activities will renew, revive and restore local control efforts elsewhere around the country.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Darin J. Smith energy and environmental lawyer Squire PB
Associate

Darin J. Smith is a member of the firm’s Environmental, Safety & Health Practice Group and focuses his practice on helping organizations manage and mitigate the spectrum of financial and reputational liabilities that may arise from a crisis no matter the size, type or location. He has assisted clients in all stages of crisis management, from emergency preparedness to public relations to litigation and settlement negotiations.

Darin also specifically counsels clients on a wide range of environmental liability issues relating to the Comprehensive Environmental...

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