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City’s oil and gas regulations lead to lawsuit by 2 trade groups

by | Oct 19, 2017 | Business Litigation

The city of Thornton in Colorado is facing a lawsuit spearheaded by two trade groups for the oil and gas industry. The issue at hand is that the town’s new rules are being called illegal by the two groups.

The accusation is that the city is overstepping its bounds and overtaking the state’s authority. At the heart of the matter is who truly holds the control over aspects of gas and oil operations.

This lawsuit isn’t the first time that bans on operations in this industry have been called into question. The Colorado Supreme Court threw out bans that were imposed in Longmont and Fort Collins in May of 2016.

The oil and gas industry tried to handle the issue without taking the step of filing a lawsuit against Thornton. This wasn’t possible so the lawsuit was commenced.

In the past 10 years, there haven’t been any permits issued for drilling by the city. There is some concern that the regulations will lead to expensive litigation that will have to be paid for by taxpayers.

Here are some of the issued raised in the lawsuit:

  • The state requires $1 million in insurance, but the city requires $5 million
  • The state requires flow lines to be severed but left in the ground. The city requires them to be removed instead of left in the ground
  • Setback regulations set by the city violate the 500-foot buffer zone the state laws call for

There are other issues present with the city’s regulations. Each of the issues is being covered in the lawsuit. The city counsel approved the lawsuit in August with a vote of seven in favor and two against.

Source: Denver Business Journal, “Colorado city’s new oil and gas regulations are illegal, suit claims,” Cathy Proctor, Oct. 10, 2017

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