Voss V. Lundvall Brothers Inc‪.‬

The questions in this case are whether the Oil and Gas Conservation Act, §§ 34-60-101 to -126, 14 C.R.S. (1984 & 1991 Supp.), preempts a home-rule city from enacting a land-use ordinance that imposes a total ban on the drilling of any oil, gas, or hydrocarbon wells within the city and whether any such preemption would violate article V, section 35 of the Colorado Constitution, which prohibits the delegation of a municipal function to a special commission. In Lundvall Bros., Inc. v. Voss, 812 P.2d 693 (Colo. App. 1990), the court of appeals addressed only the preemption issue and held that, because the development of oil and gas resources is a matter of statewide concern, the Oil and Gas Conservation Act preempts a home-rule city from regulating any aspect of oil and gas development or operations within the city. We affirm the judgment of the court of appeals, but we do so for reasons different from those relied on by the court in its opinion. We hold that while the Oil and Gas Conservation Act does not totally preempt a home-rule city's exercise of land-use authority over oil and gas development and operations within the territorial limits of the city, the statewide interest in the efficient development and production of oil and gas resources in a manner calculated to prevent waste, as well as in protecting the correlative rights of owners and producers in a common pool or source to a just and equitable share of the profits of production, prevents a home-rule city from exercising its land-use authority so as to totally ban the drilling of oil, gas, or hydrocarbon wells within the city. We also conclude that the state preemption of a home-rule city's total ban on drilling does not violate article V, section 35 of the Colorado Constitution.