Local Governments' Lost Voice in Energy Decisions

by Hannah Wiseman

June 07, 2016

The Colorado Supreme Court's decisions last month holding that local governments in Colorado could not ban or place long-term moratoria on hydraulic fracturing ("fracking") added to the growing list of states that have preempted local control over this oil and gas production method. This is a troublesome trend and one that calls for closer scrutiny as more states follow this path.

Local governments are "merely" arms of the state, and, therefore, states do have the power to take back the broad land use authority they have historically delegated to local decision makers if they so choose. This is true even in states that have granted broad home rule authority to local governments through their constitutions, although the ability of a legislature or court to take back constitutionally granted home rule is somewhat more limited.

In Colorado, for example, the state constitution makes clear that local law may supersede state law when the local law involves matters of local concern, like decisions to implement sales and use taxes or training and certifying sheriffs in a particular way. But the Colorado Supreme Court did not interpret the regulation of fracking to involve a matter of purely local concern due to its cross-border impacts.

Although states have the power to preempt local control over most matters, this does not answer the more important question of when states should exercise this power – particularly in areas like land use, in which local governments have historically wielded very important authority. Local governments have long determined which types of industries and other uses of land may operate within their boundaries and the zoning districts in which certain industries are or are not permitted, and often for good reason. Local government officials are most aware of the preferences and needs of their citizens, can respond more quickly to local concerns, and can provide the sort of diverse policies that federalism and subsidiarity scholars often praise.

This is not to say that state, regional, or federal officials operating "on the ground" within communities might not be just as effective as local officials. But these higher-level officials – at least with the current resource constraints they face – cannot be present in every community to investigate or prevent all incidents at oil and gas well sites. Nor are these higher-level officials currently knowledgeable about nuanced issues involving the ideal location of industrial development and other types of development within a community, and thus how different land uses might best be accommodated at different locations within a community so that such uses are compatible. Local officials are therefore crucial participants in regulating within this area.

States, in preempting local control over oil and gas development, point to the need for uniformity of regulation to attract industry and avoid an overly burdensome patchwork for regulations. Yet industry – including the fracking industry – should not be attracted to states at the expense of communities that experience the most concentrated impacts of this activity. Local governments need a meaningful voice in controlling and mitigating the impacts that they experience as a result of energy development, and preemption takes away this voice.

In investigating and understanding the recent preemption decisions, it's important to note the differences among them. Some, like Colorado's decisions and a West Virginia county court ruling, only preempt local bans or long-term moratoria. This likely leaves local governments some room to at least establish the zones in which oil and gas wells may operate and regulate other impacts and perhaps negotiate with oil and gas companies for community benefit agreements, infrastructure improvements, and other contributions to the community to address damages. Further, local governments might still be able to impose bonding requirements on oil and gas operators in the event that something goes wrong at a well site and the operator does not fix the problem.

But other states, including Louisiana, Ohio, Oklahoma, and Texas, have broader preemption that appears to curtail even the traditional land use-based authorities of local governments to regulate. For example, the federal Fifth Circuit found that Shreveport was not allowed to prevent drilling within 1,000 feet of its drinking water supply (Energy Mgmt. Corp. v. City of Shreveport, 397 F.3d 297 (5th Cir. 2005)). And the Supreme Court of Ohio found that local requirements for paying a fee and a bond before drilling, obtaining a local zoning permit before drilling, and scheduling a public meeting at least three weeks before drilling were all preempted by Ohio law.

Texas and Oklahoma specifically preempted local regulation of fracturing and oil and gas development through state statutes enacted in 2015. Texas allowed municipalities to continue regulating oil and gas development if they had been doing so for at least five years without preventing development, and any new municipal regulations were limited to those "governing fire and emergency response, traffic, lights, or noise, or imposing notice [of drilling] or reasonable setback requirements" between wells and other infrastructure like houses. These regulations were only permitted if they were "commercially reasonable." Oklahoma similarly preempted local control over oil and gas development other than "reasonable ordinances, rules and regulations concerning road use, traffic, noise, and odors incidental to oil and gas operations" and "reasonable setbacks and fencing requirements for oil and gas well site locations" if necessary to protect public health, safety, and welfare.

Although we need energy development, states should think twice before wholly preempting local control over fracking and other forms of energy development and need to think more constructively about how both local and state voices can meaningfully influence the energy development process.

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Also from Hannah Wiseman

Hannah Wiseman is the Attorneys’ Title Professor at the Florida State University College of Law in Tallahassee.

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