2021 Colorado Code
Title 34 - Mineral Resources
Article 60 - Oil and Gas Conservation
§ 34-60-102. Legislative Declaration

1. 1. It is declared to be in the public interest and the commission is directed to:
      1. Regulate the development and production of the natural resources of oil and gas in the state of Colorado in a manner that protects public health, safety, and welfare, including protection of the environment and wildlife resources;
      2. Protect the public and private interests against waste in the production and utilization of oil and gas;
      3. Safeguard, protect, and enforce the coequal and correlative rights of owners and producers in a common source or pool of oil and gas to the end that each such owner and producer in a common pool or source of supply of oil and gas may obtain a just and equitable share of production therefrom; and
      4. Plan and manage oil and gas operations in a manner that balances development with wildlife conservation in recognition of the state's obligation to protect wildlife resources and the hunting, fishing, and recreation traditions they support, which are an important part of Colorado's economy and culture. Pursuant to section 33-1-101, C.R.S., it is the policy of the state of Colorado that wildlife and their environment are to be protected, preserved, enhanced, and managed for the use, benefit, and enjoyment of the people of this state and its visitors.

   2. It is neither the intent nor the purpose of this article 60 to require or permit the proration or distribution of the production of oil and gas among the fields and pools of Colorado on the basis of market demand. It is the intent and purpose of this article 60 to permit each oil and gas pool in Colorado to produce up to its maximum efficient rate of production, subject to the protection of public health, safety, and welfare, the environment, and wildlife resources and the prevention of waste as set forth in section 34-60-106 (2.5) and (3)(a), and subject further to the enforcement and protection of the coequal and correlative rights of the owners and producers of a common source of oil and gas, so that each common owner and producer may obtain a just and equitable share of production from the common source.

2. It is further declared to be in the public interest to assure that producers and consumers of natural gas are afforded the protection and benefits of those laws and regulations of the United States which affect the price and allocation of natural gas and crude oil, including the federal “Natural Gas Policy Act of 1978”, 15 U.S.C. sec. 3301, and particularly that the oil and gas conservation commission, established by section 34-60-104, be empowered to exercise such powers and authorities as may be delegated to it by the laws or regulations of the United States, including said “Natural Gas Policy Act of 1978”, and, in the exercise of such powers and authorities, to make such rules and regulations and to execute such agreements and waivers as are reasonably required to implement such power and authority.

History. Source: L. 55: P. 656, § 10. CRS 53: § 100-6-22. C.R.S. 1963: § 100-6-22. L. 79: Entire section amended, p. 1319, § 1, effective February 16. L. 94: (1) amended, p. 1978, § 2, effective June 2. L. 2007: (1) amended, p. 1357, § 2, effective May 29; (1) amended, p. 1328, § 1, effective July 1. L. 2019: IP(1)(a), (1)(a)(I), and (1)(b) amended,(SB 19-181), ch. 120, p. 506, § 6, effective April 16. History. Source: L. 55: P. 656, § 10. CRS 53: § 100-6-22. C.R.S. 1963: § 100-6-22. L. 79: Entire section amended, p. 1319, § 1, effective February 16. L. 94: (1) amended, p. 1978, § 2, effective June 2. L. 2007: (1) amended, p. 1357, § 2, effective May 29; (1) amended, p. 1328, § 1, effective July 1. L. 2019: IP(1)(a), (1)(a)(I), and (1)(b) amended,(SB 19-181), ch. 120, p. 506, § 6, effective April 16.

Amendments to subsection (1) by House Bill 07-1341 and House Bill 07-1298 were harmonized.

For the legislative declaration contained in the 1994 act amending subsection (1), see section 1 of chapter 317, Session Laws of Colorado 1994. For the legislative declaration contained in the 2007 act amending subsection (1), see section 1 of chapter 320, Session Laws of Colorado 2007.

Law reviews. For article, “Prorationing of Natural Gas Production: An Economic Analysis”, see 57 U. Colo. L. Rev. 153 (1986). For comment, “The Battle Between the Colorado Oil and Gas Conservation Commission and Local Governments: A Call for a New and Comprehensive Approach”, see 76 U. Colo. L. Rev. 561 (2005).

Colorado's public policy reflects federal public policy. The public policy of Colorado regarding the “price and allocation of natural gas” is the policy expressed by congress in the national gas policy act of 1978. Superior Oil Co. v. Western Slope Gas Co., 549 F. Supp. 463 (D. Colo. 1982 ).

Including indefinite price escalation clauses. The general assembly apparently intended the entire national gas policy act of 1978, including the sections which allow indefinite price escalation clauses in existing intrastate contracts to operate “according to their terms”, to exist as the public policy of Colorado. Superior Oil Co. v. Western Slope Gas Co., 549 F. Supp. 463 (D. Colo. 1982 ).

Favored nations provision in long-term contract for purchase of intrastate gas was not contrary to public policy of Colorado. Superior Oil Co. v. Western Slope Gas Co., 758 F.2d 500 (10th Cir. 1985).

This section requires the commission to foster the development of oil and gas resources, protecting and enforcing the rights of owners and producers, and, in so doing, prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare, but only after taking into consideration cost-effectiveness and technical feasibility. Colo. Oil & Gas Con. Comm'n v. Martinez, 2019 CO 3, 433 P.3d 22.

The commission properly declined to engage in rulemaking because it lacked statutory authority to adopt a proposed rule that would prohibit issuance of a well permit if the well would in any way impair the environment, adversely impact human health, or contribute to climate change. The commission was already working with the department of public health and environment to address the concerns to which the proposed rule was directed. Colo. Oil & Gas Con. Comm'n v. Martinez, 2019 CO 3, 433 P.3d 22.