CHAPTER 7 INTERGOVERNMENTAL RESTRAINTS ON OIL AND GAS DEVELOPMENT
| Jurisdiction | United States |
(Nov 1980)
INTERGOVERNMENTAL RESTRAINTS ON OIL AND GAS DEVELOPMENT
Mountain Fuel Supply Company
Salt Lake City, Utah
INTRODUCTION1
The Overthrust Belt of Utah, Wyoming, Montana and Idaho is regarded by both energy industry and federal government leaders as an important part of the total energy potential of the Western states. As the uncertainties of volatile governments in oil exporting countries continue, the oil and gas in the Overthrust Belt will play an increasingly important part in fulfilling domestic energy requirements.
A continuing debate is now being carried on throughout the capitol buildings of the Western states and the nation's capital as to which is the proper party to superintend the energy development in the West, and as to who will make the tough future decisions concerning the tradeoffs between the practical and economic effects of full energy development, the protection of environmental concerns, and whether the states will have any voice in the arena of Western energy development.
The United States is heavily dependent on oil and gas to meet its energy needs. We have been continually faced with declines in the domestic supply of oil and gas2 from the 1970 peak. In order to supplement stagnating domestic production of fuels, increasing quantities of crude oil and refined petroleum have been imported from outside countries in recent years. However, as the 1973 OPEC Middle East embargo demonstrated, the
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United States cannot permit itself to rely upon foreign sources for its energy requirements as such dependence threatens our national as well as economic security.
Increased domestic energy production will be necessary to satisfy the projected doubling of our energy consumption3 by the year 2000. While using a number of assumptions concerning federal energy policy, the Department of Interior has concluded that such increased energy production is feasible. Two of these assumptions are that (1) energy resource availability will be enhanced by the federal government's leasing of federal lands, and (2) environmental protection laws will not be so onerous as to frustrate this development policy.4
As the focus of national attention for oil and gas has turned inward toward the Overthrust Belt and other promising areas, there has developed an increasing state concern about the impact of energy development upon the interests of such states. A tug-of-war between the states and the federal government has begun over the extent of the state's voice in Western energy development. In addition, as the division between state and federal authority has become obscured, coordination between the levels of government has become an increasingly difficult problem. Ambiguity and delays in energy policies and in important government actions have resulted. The energy shortage is bringing into sharp focus a potential conflict between those in favor of rapid development of the oil
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and gas of the Overthrust Belt and those in favor of preserving the area's environmental quality.
At the present, permanent solutions to these problems have been attempted through federal legislation or through case-by-case litigation. Unfortunately, however, comprehensive remedial federal legislation is not an immediate prospect. Litigation, with all its uncertainties for all parties, is inordinately time consuming and is enormously wasteful of human effort and money. The problems are immediate and so are the needed solutions.
The federal government will continue to preside as the decision-maker of national interests, and it is probable that future cooperative agreements and legislation will leave to the federal sovereign many decisions as to where and when energy development is going to occur. However, if this federal power is used in unbridled unconcern for state and local interests, unrest in the Western states will surely continue. State and local governments must be given participation in and a voice over such decisions when the development is so designed as to create substantial impacts on matters of state and local concern.
The general purpose of this presentation is to briefly examine the authority among the various levels of federal, state and local governments and to highlight apparent practical and economic constraints on oil and gas development in the
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Overthrust Belt. Some of the problems presented will not lend themselves to easy resolution short of legislation or constitutional revision. However, where solutions are apparent, they will be addressed.
I. SOURCES OF FEDERAL, STATE, AND LOCAL POWERS
As a general overview, no matter what level of government seeks to directly or indirectly regulate or control land use decisions, the regulation or means of control must be based upon one or more of those powers which that level of government may exercise.
The federal government may exercise only those powers enumerated in the Constitution of the United States, and it must act only within the areas of its stated authority. However, broad U.S. Supreme Court holdings have found support in the exercise of federal control and involvement in land use decisions.5
On the other hand, the powers not delegated to the United States by the Constitution, nor granted to the citizens of the nation, have been reserved to the states. The states in turn, by state constitution or enabling legislation, have delegated some of those retained powers to local levels of government such as counties, cities and special districts. Having gained their powers from the state, the local levels of government may not exceed the powers that have been delegated to them by the state.
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A. Federal Powers.
1. Commerce Clause.
The U.S. Constitution grants congress the power "to regulate commerce...among the states."6 Congress is granted by the commerce clause the power to:7
(a) prevent the misuse of channels of commerce,
(b) protect the instrumentalities of commerce, and
(c) regulate certain activities "affecting" commerce.
Congressional power to utilize the commerce clause as complete in itself has extended that right to include "intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power."8 Even though an activity may have a "trivial" effect on interstate commerce, it may be included with other similar actions to fall within the purview of congressional commerce clause power.9 For example, because they are commingled with movements of air across state lines, air pollution particles themselves are articles moving in interstate commerce and are, therefore, subject to federal regulation.10 The activities included within congressional regulation under the commerce clause are sufficiently broad to also include land use problems as well as air and water pollution related to energy development.
2. Property Clause.
Another important source of federal authority is the property clause of the U.S. Constitution which states:
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The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any claims of the United States, or of any particular State.11
This clause vests Congress with plenary authority to pass laws for the protection, management and disposition of federal lands within the states.12 This authority, together with the Supremacy Clause of the Constitution, which provides that federal law "shall be the supreme law of the land,"13 gives the federal government the power to supersede state legislative authority which would otherwise be applicable to the public domain.
It is interesting to note the emerging philosophy that the federal government's authority over federal lands, combined with the necessary and proper clause, may also provide a basis for the federal imposition of restrictions on the use of non-federal lands which adjoin federal lands.14 This federal interest over the public domain is considered to be proprietary and will not invalidate the full effectiveness of state laws with respect to the public domain so long as such state action is not inconsistent with the congressional scheme for the use of the property.15
3. Power to Tax and Spend.
Congressional taxing power has been used to obtain results above and apart from the basic revenue-raising purpose of such tax. It has been used to induce business investment through investment tax credits,16 to promote conservation through
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windfall profits tax,17 and for other nonrevenue-raising purposes. The Supreme Court has been willing to accept the justification of a tax measure on its face without regard to whether it attempts to regulate other activities.18
Congressional spending power must be used only for the "general welfare."19 However, the federal government has continually placed conditions upon the receipt of federal funds in order to obtain from the state or local levels of government what it would not have been able to obtain under its enumerated powers.20
B. State Power.
The past decade has seen the emergence of a new set of national issues involving federal lands and resources which are imposing serious strains on the fabric of federal-state relationships. Those with the highest current visibility involve the role of state government in federal programs and proposals to increase domestic energy self-sufficiency through the development of federally-owned energy resources.
At present, no comprehensive or satisfactory set of institutional arrangements has been developed to facilitate a coordinated federal and state governmental response to energy and land-use planning issues.
The awesome federal power over massive tracts of Western lands has understandably inspired many feverish, offtimes...
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