Economy & Trade

In 2007, Governor Ritter pushed sweeping changes to the Colorado Oil and Gas Conservation Commission (Commission) through the legislature.  HB 07 1298 and HB 07 1341 dramatically changed the make-up of the Commission (from industry experts to a majority of government appointees, environmental interests and others) and mandated new rules to impede oil and gas production in Colorado.  Following a series of public meetings, the Commission issued draft rules (Rules) in March of 2008.

The Rules purport to regulate what occurs, when and how, on private property for mule deer, prairie dogs, sage grouse and other wildlife species.  Perhaps never before has such a wide-scale intrusion into private property been proposed by Colorado’s state government.  Industry representatives warn that restrictions on timing, endless red-tape and countless opportunities for third-party appeals and litigation will wreak havoc on Colorado’s teetering economy.  Reports from the Aspen Times, the Rocky Mountain News, and other sources, cite two companies that, themselves, will pull $600 million in investment out of Colorado and into more secure regulatory environments.  Perhaps its no wonder the nickname “Recession Ritter” has dogged the Governor in recent weeks.            
 
Colorado agricultural interests, oil and gas, royalty interests, and others, have raised objections to many provisions in the proposed oil and gas Rules.  Colorado Cattlemen’s Association, Colorado Farm Bureau, Colorado Livestock Association, Colorado Pork Producers Council, Colorado Horse Council, Colorado Wool Growers Association, Colorado Dairy Producers, Rocky Mountain Farmers Union and Colorado Corn Growers Association collectively (Colorado Agriculture) sought party status in the proceeding.  Represented by Holsinger Law, this inclusive coalition seeks changes to the Rules to protect their interests and private property rights. 

Colorado Agriculture represents thousands of farm and ranch families, businesses and affiliates throughout Colorado.  It has serious concerns with the far-reaching impacts of these Rules on private property and the constitutional, statutory and common law rights of its affiliates and their members.   Colorado Agriculture seeks the ability to defend their legitimate interests in, among other things, the use of their own lands in this proceeding. 

But their right to defend their property has already been curtailed.  In violation of the Commission’s own statutes, Colorado Agriculture has little opportunity for comment and input into this proceeding.  Despite representing Colorado’s nine most influential agricultural groups, the coalition has been given only one hour to voice its concerns and present testimony in the proceeding.  Environmental groups, by contrast, may receive eight hours of the Commission’s time! 

The Rules, themselves, have several serious flaws.  While implementing legislation specifically provided for landowner consent on restriction to private property based on wildlife.  Such consent has been watered-down and is noticeably absent from key provisions in the Rules. 

Notably, private lands often provide the most productive wildlife habitat.  It has long been estimated that up to 95% of the habitat for endangered species exists on private lands.  As most landowners know, it pays to be a good steward.  And regulatory requirements do little to further real conservation work.  In fact, listing under the Endangered Species Act, has been found to harm, rather than help, the listed species.   

Besides exceeding the legislature’s direction in the statutes, the Rules are likely  preempted by a myriad of federal laws such as the Endangered Species Act (“ESA”), the National Environmental Policy Act (“NEPA”), the Clean Water Act and the Migratory Bird Treaty Act, among many others.  According to recent news reports, the U.S. Forest Service may share that same concern. 

By requiring inventories and data on private lands, the Rules impinge on legitimate expectations of privacy and raise serious questions of confidentiality.  Moreover, the Rules could well be regarded as a regulatory taking of private property in violation of the Fifth Amendment of the U.S. Constitution.  Through these Rules, the Commission seems to unlawfully insert itself, the Colorado Division of Wildlife (DOW) or the Colorado Department of Public Health and Environment into existing, or potential, private contracts between landowners and industry.

These Rules have cast what amounts to a cloud on title to thousands of farm and ranch families that depend upon their ability to contract and to lease mineral rights on their own lands.  To prevent dramatic impacts to Colorado’s economy, industry and agricultural interests, the Commissioner should scale-back the Rules and their impact on private property.  Landowners, the wildlife that inhabit their properties, industry, and state coffers all stand to benefit from such action.  

Kent Holsinger is the founder of Holsinger Law, LLC, a natural resources law firm in Denver, Colorado.  He represents the interests of several agricultural entities in an ongoing rulemaking proceeding that could impact private lands and royalty interests.  The views expressed herein are his own.