Oklahoma Supreme Court Bars County Energy Restrictions

Published January 10, 2019

State law preempts Oklahoma counties from unilaterally restricting energy development, the Oklahoma Supreme Court has ruled.

The Oklahoma Oil and Gas Association (OKOGA) sued Kingfisher County after county commissioners imposed restrictions on oil and gas operators. The commissioners enacted an ordinance preventing oil and gas companies from using temporary water lines to transport produced and treated water from completed wells to new ones for use in hydraulic fracturing operations. Under the ordinance, oil and gas operations could use temporary lines only for transporting fresh water.

OKOGA challenged the ordinance, saying it violates a state law preventing local governments from regulating oil and gas development.

Regulatory Certainty

The Oklahoma Supreme Court’s November 13 ruling overturning Kingfisher County’s ordinance did not declare how far cities and counties can go in regulating the side effects of oil and gas operations, instead saying only the Oklahoma Corporation Commission (OCC) has the authority to set restrictions on such operations, including determining which local ordinances are valid. OCC had not approved Kingfisher County’s ordinance.

The ruling produces needed regulatory certainty for the state’s energy producers, said OKOGA President Chad Warmington, in a statement.

“We applaud the court’s decision, which reaffirms the Oklahoma Corporation Commission has exclusive regulatory jurisdiction over oil and natural gas operations in our state,” said Warmington. “Using temporary water lines is an industry-standard practice that has numerous environmental benefits, including reducing truck traffic and supporting water recycling efforts.”

State Supremacy

This case came down to the primacy of state authority over local governments, says Trent England, executive vice president of the Oklahoma Council of Public Affairs.

“People often forget local governments are creations of state authority,” said England. “People praise the state authority and its regulatory power, and then they try and circumvent it by finding clever ways to regulate activities which are primarily regulated at the state level, so the outcome of this court case is not surprising.

“In Oklahoma, the Corporation Commission has the primary authority to regulate oil and gas activities,” England said.

The case was the result of an attempted power grab, says England.

“When environmentalists talk about local control, all they really care about is control,” said England. “If they fail at the national level, then they’ll try at the state level, and if they fail at the state level they will try at the local level.

“But it’s no surprise when they fail at the state level they are also unsuccessful at the local level, because local governments are creations of the state authority and fully subject to control by the state government and limitations imposed by the legislature or other state agencies, which are empowered to regulate commercial activities like oil and gas operations,” England said.

Kenneth Artz ([email protected]) writes from Dallas, Texas.