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Colo. Oil & Gas Conservation Comm'n v. Martinez - 2019 CO 3, 433 P.3d 22

Rule:

An agency has broad discretion to decide whether to engage in rulemaking, and, thus, judicial review of its decision as to whether to do so is extremely limited and highly deferential. One of the main purposes of limitations such as these is to avoid judicial entanglement in abstract policy disagreements which courts lack both expertise and information to resolve. 

Facts:

This case requires the court to decide whether, in accordance with the Colorado Oil and Gas Conservation Act (the "Act"), section 34-60-102(1)(a)(I), C.R.S. (2018), the Colorado Oil and Gas Conservation Commission (the "Commission") properly declined to engage in rulemaking to consider a rule proposed by Respondents, who claimed that hydraulic fracturing has adverse effects.

Among other things, the proposed rule would have precluded the Commission from issuing any permits for the drilling of an oil and gas well "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."

After soliciting and receiving public comment and allowing interested parties to be heard, the Commission declined to engage in rulemaking to consider this proposed rule because, among other things, (1) the rule would have required the Commission to readjust the balance purportedly crafted by the General Assembly under the Act and conditioned new oil and gas drilling on a finding of no cumulative adverse impacts, both of which the Commission believed to be beyond its statutory authority, and (2) the Commission was already working with the Colorado Department of Public Health and Environment ("CDPHE") to address the concerns to which the rule was directed and other Commission priorities took precedence over the proposed rulemaking at this time. The Denver District Court upheld the Commission's decision, but in a split, published decision, a division of the Court of Appeals reversed the district court's order.

Issue:

In accordance with the Colorado Oil and Gas Conservation Act (the "Act"), section 34-60-102(1)(a)(I), C.R.S. (2018), did the Colorado Oil and Gas Conservation Commission properly decline to engage in rulemaking to consider a rule proposed by Respondents, who contended that hydraulic fracturing has an adverse impact?

Answer:

Yes.

Conclusion:

The Supreme Court of Colorado reversed the appellate division's judgment and concluded that the Commission properly declined to engage in rulemaking to consider Respondents' proposed rule. The Court reached this conclusion for three primary reasons. First, a court's review of an administrative agency's decision as to whether to engage in rulemaking is limited and highly deferential. Second, the Commission correctly determined that, under the applicable language of the Act, it could not properly adopt the rule proposed by Respondents. Specifically, as the Commission recognized,the pertinent provisions do not allow it to condition all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment. Rather, the provisions make clear that the Commission is required (1) to 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 cost-effectiveness and technical feasibility. Finally, in declining to engage in rulemaking, the Commission reasonably relied on the facts that it was already working with the CDPHE to address the concerns underlying Respondents' proposed rule and that other Commission priorities took precedence at this time.

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