By: Chad Thornton
Parishes throughout Louisiana are finding difficulty in rezoning parish lands that have been previously permitted or may be permitted for use in the oil and gas industry. Under Article 6 of the Louisiana Constitution, the regulation of the oil and gas industry by the Commissioner of the Office of Conservation is an exercise of Louisiana’s police powers.[1] Louisiana Revised Statutes 33:4780.41 and 33:4780.42 provide that land use and zoning regulations directed to the governing authority of a parish do not apply to the Commissioner of the Office of Conservation.[2] These constitutional and statutory provisions grant expansive and unabridged power to the Commissioner to override parish zoning ordinances in the name of oil and gas resource regulation.[3]
In St. Tammany Parish Government v. Welsh, St. Tammany Parish sought declaratory judgement to establish that the zoning designations of the Parish rendered drilling permits issued by the Commissioner void. In 2010 St. Tammany Parish issued Ordinance No. 10-2408 that rezoned unincorporated lands within the boundaries of the parish.[4] Included within this rezoning effort are the lands that were permitted for drilling by the Commissioner.[5] This land had been a pine tree farm for the previous 30 years, but in 2014 permission to drill on these lands was granted to Helis Oil Company.[6] The parish filed suit against the Commissioner seeking to stop the drilling, and Helis Oil intervened, with all parties seeking summary judgment on the matter.[7] The dispute hinged upon whether or not the St. Tammany Parish ordinance was preempted by La. R.S. 30:28. Louisiana First Circuit Court of Appeals upheld summary judgment granted to Helis by the district court ruling that local zoning ordinances did not apply to the Commissioner.[8] The First Circuit stated that, “[t]he state entity responsible for the regulation of the oil and gas resources of the State is the Office of Conservation, which is directed and controlled by the Commissioner of Conservation.”[9] And that, additionally, under LA. R.S. 30:28 no political subdivision has the authority to interfere with drilling by a permit holder.[10] The Commissioner’s power preempts parish zoning regulations, and permits for drilling issued by the Commissioner are valid.
However, the Commissioner’s breadth of power over the regulation of oil and gas resources has been successfully challenged in the past. In Louisiana Environmental. Action Network v. Welsh, The Louisiana Environmental Action Network (LEAN) challenged Conservation Order No. ENV 2015-03 CFT issued by the Commissioner.[11] This order approved the construction of an FAS Environmental Services, LLC commercial E & P waste transfer station in St. Martin Parish.[12] The LEAN, inter alia, challenged the order under the contention that the Commissioner violated statutory law by failing to consider the effects the transfer station would have on St. Martin Parish’s recreational and tourism resources.[13] The new transfer station required heavy industrial truck traffic to traverse a residential area.[14] FAS argued that this facility would not negatively impact property value, and that truck traffic would not increase because this facility would be replacing an already existing transfer station.[15] Louisiana First Circuit Court of Appeals ruled that the permit applied for was for permission to construct a new transfer station, and that this application did not support the Commissioner’s order that could be interpreted to allow both the new and old transfer facilities to operate simultaneously.[16] Contrary to the decision in St. Tammany Parish Government v. Welsh, Louisiana Environmental. Action Network v. Welsh shows that the Commissioner’s power is not limitless, and a challenge can be successful.
In August of 2022, Livingston Parish proposed an ordinance that would freeze any construction of disposal and injection wells in the parish.[17] The ordinance seeks to prohibit carbon capture in Livingston Parish. Typically, the construction of injection wells is regulated by the EPA, but Louisiana is currently seeking enforcement power over this permit process.[18] The process would then fall under the expansive power of the Commissioner.[19] On September 8, 2022, the proposed ordinance was amended to a twelve-month temporary freeze on injection well construction.[20] If the Commissioner is granted power to oversee the permitting of injection well construction, Livingston Parish could find itself in a similar position as St. Tammany Parish in 2016. The Commissioner’s power over the regulation of oil and gas resources could invalidate any parish ordinance that attempts to limit that power.
From St. Tammany Parish Government v. Welsh, the Commissioner appears to have plenary power over any and all oil and gas resource related matter. While the power of the Commissioner was successfully challenged in Louisiana Environmental. Action Network v. Welsh, the Livingston Parish Ordinance more closely resembles that of St. Tammany. If during the temporary 12-month moratorium, the Commissioner permits the construction of an injection well in Livingston Parish, the parish could challenge the permit. However, the Louisiana Court of Appeals has made clear that zoning ordinances do not apply to the Commissioner. The temporary moratorium or an extension thereof, would likely be invalid if the Commissioner found reason to permit construction. As Louisiana Parishes begin to take an environmentally conscious stance on zoning, more litigation challenging the power of the Commissioner is probable.
[1] La. Const. Art. 6, § 9(B).
[2] La. REv. Stat. 33:4780.41; La. Rev. Stat. 33:4780.42.
[3] Louisiana Env’t Action Network v. Welsh, 2016-0906 (La. App. 1st Cir. 6/14/17), 224 So. 3d 383, 387.
[4] St. Tammany Par. Gov’t v. Welsh, 2015-1152 (La. App. 1st Cir. 3/9/16), 199 So. 3d 3, 6, writ denied, 2016-0657 (La. 6/17/16), 194 So. 3d 1108, and writ denied, 2016-0650 (La. 6/17/16), 194 So. 3d 1109.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Louisiana Env’t Action Network v. Welsh, 2016-0906 (La. App. 1 Cir. 6/14/17), 224 So. 3d 383, 385.
[12] Id. “E & P is a term that refers to the wasted generated during natural gas and oil exploration and production (E & P) activities.” What is E&P Waste? An Overview, ecoSERV (June 21, 2021) https://ecoserv.net/what-is-e-and-p-waste/ [https://perma.cc/N9MH-D3A2].
[13] Louisiana Env’t Action Network v. Welsh, 224 So. 3d at 386.
[14] Id.
[15] Id at 387.
[16] Id at 389.
[17] Jeffrey D. Lieberman & Caleb J. Madere, Livingston Parish Council Proposes Ordinance Banning Injection and Disposal Wells, Liskow&Lewis (September 1, 2022) https://www.theenergylawblog.com/2022/09/articles/business/livingston-parish-council-proposes-ordinance-banning-injection-and-disposal-wells/ [https://perma.cc/98E6-8ZHU].
[18] Id.
[19] Id.
[20] Minutes of the Livingston Parish Council, p. 7 (September 8, 2022).