Boulder, Boulder County, Constitutional Law, Environment, Land Use, Legal, Original Report, Property rights, Scott Weiser, Uncategorized, Zoning

Boulder sued for taking mineral owner’s property via string of energy development moratoriums

BOULDER–The Public Trust Institute (PTI), a Colorado-based public interest law firm, is representing John and Valorie Wells in a federal lawsuit against the City of Boulder, claiming that their valuable mineral rights have been taken by the City without just compensation through a seemingly endless series of moratoriums on oil and gas permitting.

While the surface of the land in question is part of Boulder’s Open Space program, the Wells have owned the mineral rights below since 1981.

“The Constitution says government can take private property for public use, but they’re not allowed to do so without paying just compensation,” Dan Burrows, Legal Director for PTI told Complete Colorado. “And what we allege here is that they have taken the Wells’ property.”

Boulder instituted what was supposed to be a temporary moratorium on oil and gas development in June 2013, ostensibly to allow the City to catch up with permitting for the then-booming fossil fuels energy industry.  Boulder voters later extended the delay through June 3, 2018 by approving a city council-referred ballot measure in the 2013 Novemeber election.

It was extended several more times, and then without any discussion the Boulder City Council passed another extension on December 1, 2020, pushing out the moratorium until December 31, 2021.

The reasoning this time is that because Boulder County is also revising its regulations, the City must again extend its moratorium, although it has had since April, 2019 to make changes.

Why the City feels obligated to wait on Boulder County to act is not clear.

Burrows said, “We would have been surprised had they not extended it. And frankly, I would be surprised if we get to the end of 2021 they don’t extend it again.”

In 2016 the Colorado Supreme Court ruled in a pair of cases against Fort Collins and Longmont that five-year moratoriums on hydraulic fracturing, or fracking (a process used to free up oil and gas deposits thousands of feet underground) were invalid because they conflicted with the state’s Oil and Gas Conservation Act (OGCA).

At the time the OGCA said “It is the intent and purpose of this article to permit each oil and gas pool in Colorado to produce up to its maximum efficient rate of production, subject to the prevention of waste, consistent with the protection of public health, safety, and welfare, including protection of the environment and wildlife resources…”

The passage of Senate Bill 19-181 radically changed the future of oil and gas exploration in Colorado by imposing stringent regulations and modifying the composition of the Colorado Oil and Gas Conservation Commission (COGCC) and the OCGA to focus heavily on environmental concerns.

The new law also expanded the power of local governments to regulate fossil fuel development, as long as those regulations are more stringent than those of the state.

The Wells have had enough of the City’s delays, so they sued.

The Wells say in their lawsuit that Boulder is using a “never-ending succession of short-term bans” as a “pretext to cover the City’s true purpose of permanently eliminating oil and gas production within city limits and on City-owned land.”

The complaint says the City has “stated or implied that is its goal” on several occasions.

One example given is from a 2021 Policy Statement on Regional, State and Federal Policy Issues, where the City states that it supports “eliminating fracking as an exemption” under federal environmental laws and requiring “consent from governmental bodies” to put oil and gas facilities “on government property, such as open space lands.”

This appears to be aimed squarely at mineral owners like the Wells who severed and reserved the mineral rights under land the City eventually bought (or plans to buy) as open space.

But Boulder admits on its own website that SB 181 “did not give blanket authority to prohibit oil and gas development or enact long-term moratoria” even as it extends its own “temporary” moratorium to eight years.

The problem facing Boulder is that subsurface minerals, which includes oil and gas as well as metals like gold and silver, can be owned by someone other than the surface owner. The mineral owners retain the right to access and extract those minerals, even over the objections of the surface owners.

Regulating away the mineral owner’s rights can be an expensive proposition.

“It’s a piece of real property that’s recorded in the county recorder’s office, just like your house or your condo or whatever anybody else lives in,” said Burrows. “By saying you’re not allowed to do anything with it the City has made a valuable piece of property valueless.”

And when that happens the government is required to pay just compensation, says the U.S. Supreme Court in a long line of Fifth Amendment takings cases.

While the City has the right to regulate incompatible land uses, the Supreme Court has said that a regulatory taking occurs when the government goes “too far” in restricting the property owner’s economic value and “investment based expectations.”

“The idea that these are incompatible uses is frankly silly,” said Burrows. “What this is about is a belief that oil and gas contributes to climate change, and that by eliminating oil and gas development in some tiny portion of the United States, they somehow have done their part on global warming. It’s not about science, it’s about virtue signaling.”

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