P.S. On the claim that the MOU “is not regulation and cannot be regulation”
There are over 30 references to the MOU in the proposed Part II Section 27 zoning regulations, in a variety of usages. ECZR even specifies that the MOU must be submitted to COGCC, a requirement which would seem to present an operational conflict with COGCC.
The writers of the new section of ECZR [that the BOCC will consider on 2-12-2014] seem to take the position that because the county offers alternative zoning approval through SUR, that the MOU is optional and non regulatory.
I don’t find that argument persuasive.
If the BOCC enacts Part II Section 27, the MOU will become regulatory for that section of the ECZR. The fact that alternative ECZR exists would not make the new Part II S 27, MOU inclusions any less regulatory.
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It’s a bad idea for Elbert County Oil & Gas zoning regulations to base any zoning decision points, in the application of county zoning laws, on the existence or substance of an MOU contract between Elbert County and an Operator, or between Elbert County and a mineral rights owner.
As a contract, an MOU would be enforceable under contract law and remedies could be ordered that may have very little to do with governmental regulatory objectives. As a zoning regulation, an MOU could enliven constitutional questions since one of the parties to the agreement is a government, and one is not. Here too the resolution of a constitutional question may not serve a governmental regulatory objective.
But once a contractual device is incorporated into a county zoning process, or once a contractual device is incorporated into a COGCC state regulatory process, is it still a contract, or has it become a regulation? What legal standards should apply to an enforcement for a regulatory breach?
The MOU device presents multiple ambiguities that must be litigated to be resolved. Elbert County should avoid the whole business. If the questions really must be answered, let another county that has some money be the one to fund it.
The currently proposed MOU is low-hanging fruit for a litigious political group, such as local Democrat activists, looking for any opportunity to delay Oil & Gas development. Elbert County’s hands tied up in a judicial imbroglio full of imponderable lawyerly questions taking years to sort out by multiple courts would fit nicely into their agenda.
Looking past the general problems to the specifics of this proposed MOU, it contains numerous references to the COGCC. COGCC regulations govern the county whether or not they’re referenced in an MOU. The multiple references affirming that fact are needless verbiage.
Several clauses seek to bind unknown future transferee Operators to the terms of the MOU. Future Operators will not have provided any consideration under the terms of this MOU, nor will they have made any promises under this MOU. Contractual promises made by predecessor parties without the consent and participation of successor interests, don’t control future unknown parties.
A clause that attempts to make the MOU enforceable after the MOU expires or is terminated, if for some reason the MOU agreement does not survive, won’t be enforceable. Termination of a contract extinguishes performance duties under that contract.
But let’s say an MOU gets picked up by the COGCC on an Operator’s form 2A, and then the COGCC tracks that Operator’s performance against terms in that MOU. If the COGCC observes a performance out of spec from the MOU, it still falls to the county to seek remedies for the breach of the MOU.
The MOU is still a contract and when it comes to transfers, a future owner has the defense from being subject unjustly to a deal it had no part in forming. In addition, remedies for breach in the form of orders for specific performance or contract reformation through “blue penciling” the language, would effectively turn over COGCC regulatory decisions to judicial agencies with no relevant geologic expertise.
Democrat activists wouldn’t even be pushing an MOU regulatory device on to the county if they didn’t see it as a mechanism to impose more restrictive [operationally conflicting] drilling terms on an Operator than COGCC regulations would require.
This MOU will foreseeably put the COGCC in the position of monitoring multiple inconsistent performance standards depending on which installation it’s looking at, which sets up a regulatory jumble of inconsistent standards to enforce across the state. Inconsistent regulatory standards enforcement begs the claim of an equal protection offense.
And consider C.R.S. 34-60-102 (2013), the Legislative Declaration of the “Oil and Gas Conservation Act,” which established the COGCC and says;
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, 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 therefrom. (italics mine)
If one Operator in a “common source of oil and gas” bows to local government political pressure and gives up performance rights that COGCC grants to other Operators in the same mineral source who have not bowed to that government political pressure, how can the COGCC possibly be said to be preserving the “coequal and correlative rights of the owners and producers of [that] common source of oil and gas?” The COGCC will be, de facto, enforcing unequal development rights – another equal protection problem.
For the above reasons, the BOCC should not pass local zoning laws that incorporate an MOU into a zoning procedure at the local county level.
Moreover, the BOCC should not take the advice of litigious anti Oil & Gas activists, and should not sign MOU agreements with Operators, or other private parties, for incorporation into COGCC submittals, when those agreements contain terms that could operationally conflict with COGCC standard regulations.
The conservative approach that has worked well for most other Colorado counties in the position that Elbert County now finds itself with Oil & Gas development is to avoid setting conditions that could lead to litigation.
It would be refreshing to, first, hear this priority articulated by members of the Elbert County Planning Commission and by all members of the Board of County Commissioners, and then see it acted upon.