COGA drills for legal win
The Colorado Oil and Gas Association has every right to sue the state agency that oversees gas drilling, just as environmental groups have been known to sue state and federal agencies if they believe regulations aren’t stringent enough.
But COGA’s lawsuit seems a long shot. The reason is that the state has wide latitude under the Constitution to establish regulations under which private businesses may operate, and the Colorado Oil and Gas Conservation Commission developed its new rules under legislation passed by the state Legislature in 2007.
That is not to say COGA’s complaints are without merit. There is no question the new regulations have a financial impact on drilling companies. When that occurs at a time when a global glut of natural gas is driving prices down, it compounds the industry’s financial problems. That’s why we urged the state earlier this year to delay implementation of the new rules until the economy improves.
All that said, however, it’s clear state regulators didn’t just ignore economic impact on the industry in adopting the new rules. The Oil and Gas Commission and its staff spent hundreds of hours and worked with two economic consulting firms to analyze the economic impact of the proposed rules. And some changes were made to accommodate industry concerns.
It will be up to a judge — and perhaps ultimately the state Supreme Court — to determine if all that was sufficient. But few gas-patch gamblers would bet their drilling rigs that this lawsuit will result in overturning of the new state regulations.