A New Battle Strategy In The Fracking Wars?

The wars between state regulators and local governments over the regulation of oil and gas activity, particularly fracking, have largely centered on issues of state control and preemption. 

Recently, however, a Republican state legislator announced plans to present a new battle strategy – counties enacting bans on fracking would be required to compensate mineral owners for the lost value of their property. 

Many lawyers have long debated the legal issues and challenges to asserting a claim that a ban on fracking was tantamount to an unconstitutional taking for which the mineral rights owner(s) should be entitled to just compensation.  Numerous potential legal questions would need to be resolved in any such litigation:

• Who has standing?
• When is the date of injury?
• Would an operator have to show an intent to drill?  Commenced operations?
• How do you value damages?  Are they speculative? 
• What is prices go down (has the government essentially saved the company money by "discouraging" drilling)?

Any litigation asserting a takings claim, faced with these questions and a myriad of others, would be costly and time consuming, thus severely limiting the number of potential plaintiffs.  Representative Buck's proposed legislation would have the state government take the fight out of the hands of the mineral owners.   At a minimum, such a tact may be the easiest way to put the takings issue in front of a court.  Resolution of the issue would be far from academic and could have wide-reaching impacts on the efficacy of fracking bans going forward.

Representative Buck's proposal still has a long way to go:  a written bill, through committee, approved by the state senate and signed into law by Democratic Governor John Hickenlooper.  It a process that should be watched closely. 

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