The oil and gas landscape is changing fast these days. And a big item this month suggests the courts may have a major impact on shaping the sector over the coming months.
Especially issues like fracking. An area where a precedent-setting lawsuit was sent last week to the highest court possible in order to resolve a long-running issue over who can regulate oil and gas activity.
That's happening in Colorado. Where the state oil and gas association is suing two cities -- because of frack bans imposed by lawmakers within their municipal limits. Related: Donald Trump Sees No Danger For Environment In Keystone XL Pipeline
Oil and gas proponents argue that, under the Colorado state constitution, municipalities do not have the right to regulate drilling. With that area being the sole responsibility of the Colorado Oil and Gas Commission.
But judges at the Colorado Court of Appeals failed to return a clear verdict on the matter. Instead referring the case to the Colorado Supreme Court for a final decision. Related: China's Stock Market Meltdown Dragging Global Markets With It
In doing so, the judges noted that the matter of municipal control over fracking is becoming an issue in several states across the U.S. And said that the Colorado lawsuits are "test cases for determining whether county and local governments may regulate or prohibit fracking and related activities".
That puts a lot of weight on a decision here. With the verdict likely becoming precedent for similar cases in other parts of the country -- and thus potentially affecting the entire American oil and gas sector. Related: OPEC's $900 Billion Mistake
Watch for a date to be set in this game-changing trial. Every energy observer should be keeping an eye on the outcome.
Here's to a supremely important issue,
Dave Forest
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Dave is Managing Geologist of the Pierce Points Daily E-Letter. More
Comments
In Colorado perhaps, but the outcome won't determine what happens in North Dakota or Texas.