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Colorado Court Will Decide Fate Of Local Fracking Bans

The battle over local bans on hydraulic fracturing is heating up in Colorado. The state Supreme Court decided on September 21 to hear a case that would determine whether or not local communities have the authority to pass bans on fracking.

The issue is a highly divisive one in Colorado, where several voter-backed referenda in recent years put in place prohibitions on fracking within their municipalities. Longmont passed a ban in 2012 and Fort Collins followed in 2013.

But an oil and gas trade group, the Colorado Oil and Gas Association, sued the cities, arguing that they don’t have the authority to block fracking. Rather, approving drilling projects falls within the state government’s purview. Related: Is This The Bottom For Oil Prices?

After back and forth debate for several years, Colorado’s State Supreme Court could finally provide some clarification on the hotly contested issue over local control.

Colorado has not been the only place where the industry and local governments have faced off. Perhaps the most infamous case is Denton, Texas, where a voter-backed law blocked fracking. The state government subsequently passed legislation to overrule the ban, putting state power securely above local efforts. Related: Could California’s Green Energy Strategy Backfire Soon?

Oil and gas drillers are concerned that local initiatives could carve up energy reserves that stretch across vast areas. Municipal initiatives would create a patchwork of regulatory problems for drillers to navigate through. Also, the industry argues that bans on fracking amount to unlawful seizures of rights and ownership of mineral resources. Local communities and environmental groups counter that drilling presents a risk to public health.

Although the standoff between industry and local government is an important one, the urgency and intensity of the fight has subsided a bit, due to the collapse of crude oil prices. That has put a much deeper chill on drilling than fracking bans could ever hope to do. Colorado continues to revise down its projections for state revenue and employment, due to low oil prices. Colorado has 33 rigs operating in the state as of September 18, down by 56 percent from September 2014. Related: The Clock Is Ticking On The U.S. Dollar As World’s Reserve Currency

Fewer rigs and less drilling have resulted in a smaller degree of national attention over the conflict in Colorado. However, the State Supreme Court decision will nonetheless have a profound impact. Not only will it affect the future of drilling in Colorado – which could be decisive when oil prices rise again – but it will also affect other movements around the country to ban fracking at the local level. 

By Charles Kennedy of Oilprice.com

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