Longmont’s adoption of oil and gas rules was the opening shot in Colorado’s battle over local control of drilling — and Thursday the state decided to call a truce.
The Colorado Oil and Gas Conservation Commission voted unanimously to drop its lawsuit against the Longmont rules, which include a drilling ban in residential neighborhoods.
“We are hoping this can be a win for everybody,” Mayor Dennis Coombs said in an interview.
The move is part of a compromise orchestrated by Gov. John Hickenlooper to keep oil- and gas-related initiatives off the November ballot and cool the conflict between the state and local governments over drilling.
But two years ago, Hickenlooper had said leaving the Longmont rules in place would “stir up a hornet’s nest” by pressuring other communities to follow it.
Instead, the state lawsuit sparked what the governor this week described as “a rebellion,” with five municipalities imposing drilling bans and moratoriums and a citizen push for two ballot initiatives.
The initiatives, backed by U.S. Rep. Jared Polis, D-Boulder, would have imposed a 2,000-foot setback of drill rigs from homes and bolstered local control by adding an environmental bill of rights to the state constitution.
The oil and gas commission vote was to be a step in defusing the battle.
Still, at Thursday’s meeting, commissioners and Longmont officials clashed over the way the lawsuit was dismissed.
Longmont officials called for the commission to abandon its lawsuit “with prejudice” — meaning the city could never be sued over its rules.
“We can’t stop fighting if you don’t stop fighting,” city councilman Brian Bagley told the commission.
Concerned that such a move would set a precedent blocking the state from suing other municipalities, the commission voted to drop the suit “without prejudice.”
While that would give the state the option of suing at a later date, the commission also voted to offer a binding agreement to Longmont that it would not sue over the ordinance.
“I believe there is a shared vision here of dismissing the case … without prejudice and a covenant not to sue,” commission vice chairman Andrew Spielman said.
At first, Longmont officials expressed skepticism about a side agreement, but then said they were willing to explore it.
“We are hopeful the commission will honor their stated intention that the city of Longmont will never again be sued over our regulations,” Coombs said. “The devil is always in the details.
“We hope we can negotiate a good agreement.”
In 2012, Longmont adopted a drilling ordinance that included financial performance securities, the suspension of local permits if state and federal rules are violated, and the residential drilling ban.
The oil and gas commission sued the city, contending it had overstepped its powers and that only the state can regulate drilling.
After the state sued Longmont, the city’s citizens passed a ballot initiative banning drilling citywide, prompting a lawsuit.
In July, a Boulder District Court judge struck down the citywide ban, and on Thursday a court in Fort Collins struck down that city’s five-year ban on drilling.
Longmont was careful in drafting its ordinance, Coombs told the commission. “We believe our regs are in harmony with state regulation.”
The city has already spent $164,000 defending its regulations in the legal case, he said.
Coombs said the city has also worked closely with TOP Operating Co., the sole oil and gas driller in the city, to make sure the company can access the hydrocarbon reserves beneath the city.
“We think that Longmont’s rules are good ones, and we are ready to operate under them,” Rodney Herring, president of Lakewood-based TOP, said in an interview.
In another element of the compromise, the oil and gas commission will more closely monitor the existing setback requirement, state Department of Natural Resources director Mike King said.
Wells drilled between the minimum 500 feet from homes and 1,000 feet must adhere to tighter operating standards. The rule also requires that multi-well drilling pads must be “as far as possible” from inhabited buildings.
The centerpiece of the compromise is a 20-member commission that will make recommendations to the legislature on ways to limit land-use conflicts between oil and gas operations and communities.
King said Hickenlooper would name the members of the commission in about a week.
Mark Jaffe: 303-954-1912, mjaffe@denverpost.com or twitter.com/bymarkjaffe
