     The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.


                                                                   SUMMARY
                                                                 June 6, 2019

                                2019COA86

No. 18CA1147, Weld Air v. Colo. Oil & Gas Conservation
Comm’n — Courts and Court Procedure — Jurisdiction of
Courts — Standing; Administrative Law — State Administrative
Procedure Act — Oil and Gas Conservation Act — Colorado Oil
and Gas Conservation Commission — Judicial Review

     A division of the court of appeals concludes that Colorado’s

Administrative Procedure Act, the Oil and Gas Conservation Act,

and the Colorado Oil & Gas Conservation Commission’s (the

Commission) regulations authorize the subject citizen and

community groups to seek judicial review of the Commission’s Form

2A permit approvals for oil and gas operations. The division also

concludes that the Commission did not act arbitrarily or

capriciously in granting the challenged permits because it (1)

considered relevant public comments — as evidenced by the

administrative record documenting the Commission’s consideration
— and (2) complied with its setback regulations, as the division

holds that Rule 604.c.(2)(E)(i) does not require the Commission to

conduct an alternative site analysis before granting a Form 2A

permit. See Dep’t of Nat. Res. Rule 604.c.(2)(E)(i), 2 Code Colo.

Regs. 404-1. Accordingly, the division affirms the judgment.
COLORADO COURT OF APPEALS                                     2019COA86


Court of Appeals No. 18CA1147
City and County of Denver District Court No. 17CV31315
Honorable Kenneth M. Laff, Judge


Weld Air & Water, Sierra Club, NAACP Colorado State Conference, and Wall of
Women,

Plaintiffs-Appellants and Cross-Appellees,

v.

Colorado Oil and Gas Conservation Commission,

Defendant-Appellee and Cross-Appellant,

and

Extraction Oil and Gas, Inc.,

Defendant-Appellee and Intervenor.


                            JUDGMENT AFFIRMED

                                  Division VI
                           Opinion by JUDGE FOX
                        Freyre and Welling, JJ., concur

                           Announced June 6, 2019


Kevin Lynch, Wyatt Sassman, Sarah Matsumoto, Denver, Colorado, for
Plaintiffs-Appellants and Cross-Appellees

Philip J. Weiser, Attorney General, Kyle W. Davenport, Senior Assistant
Attorney General, David A. Beckstrom, Assistant Attorney General, Denver,
Colorado, for Defendant-Appellee and Cross-Appellant

Brownstein Hyatt Farber Schreck, LLP, Mark J. Mathews, Julia E. Rhine,
Denver, Colorado, for Defendant-Appellee and Intervenor
¶1    Appellants, Weld Air & Water, Sierra Club, NAACP Colorado

 State Conference, and Wall of Women (Petitioners) and cross-

 appellee, the Colorado Oil and Gas Conservation Commission (the

 Commission), appeal the district court’s judgment dismissing

 Petitioners’ claim and affirming the Commission’s approval of two

 permits Extraction Oil and Gas, Inc. (Extraction) requested within

 Weld County. Petitioners appeal the permit approvals, and the

 Commission cross-appeals the district court’s judgment that

 Petitioners had standing to seek judicial review. We affirm.

                           I.   Background

¶2    This appeal arises from the Commission’s approval of

 Extraction’s Form 2A permit applications.

¶3    In May 2016, Extraction filed two Form 2A applications with

 the Commission seeking approval to conduct oil and gas operations

 in Greeley, Colorado at an existing drilling site.1 The proposed site




 1 The application requested permission for two Vetting well pads
 that would include twenty-four wells, two modular large volume
 tanks, eighteen oil tanks, twenty-four separators, four vapor
 recovery units, four water tanks, and one lease automatic custody
 transfer unit.
                                   1
 — called the Vetting well pads — was approximately 1360 feet from

 the Bella Romero Academy Middle School buildings.




¶4    In June 2016, the Commission accepted public comments on

 Extraction’s applications, including comments from parents of the

 Bella Romero students, from neighboring property owners, and

 from community and environmental groups. Three concerns raised

 in the public comments, and relevant to this appeal, were (1) the

 health risk to Bella Romero students playing outdoors where the

 proposed development was less than 1000 feet from the school’s

 playgrounds and fields; (2) Extraction’s emergency response plan

 given the proposed development’s proximity to the school; and (3)
                                  2
 consideration of alternative locations farther from the school.

 Petitioners asked the Commission to deny the permit applications.

¶5    On March 10, 2017, the Commission, through its Director,

 approved Extraction’s Form 2A applications for the Vetting well

 pads. Petitioners then sued in district court, arguing that the

 Commission acted arbitrarily and capriciously in granting the

 permits — because it failed to consider public comments — and

 that its decision to grant the permits violated the Commission’s

 setback rules.

¶6    On June 20, 2018, after finding that Petitioners had standing

 to seek judicial review of the Commission’s permit approvals, the

 district court affirmed the Commission’s decision granting the

 permits.

¶7    Because standing is a threshold issue, we address the cross-

 appeal before addressing Petitioners’ appeal.

                          II.   Cross-Appeal

¶8    The Commission asserts that the district court erred when it

 held that Petitioners had standing to seek judicial review of the




                                   3
  Commission’s authorization of Extraction’s Form 2A permit

  applications. We disagree.

       A.   Preservation, Standard of Review, and Applicable Law

¶9     Petitioners contend that the Commission cannot argue for the

  first time on appeal that they lack standing to seek judicial review

  of Form 2A permit approvals. Because questions of standing may

  be raised at any time, we disagree. See Hickenlooper v. Freedom

  from Religion Found., Inc., 2014 CO 77, ¶ 7 (“Standing is a

  jurisdictional prerequisite that can be raised any time during the

  proceedings.”).

¶ 10   Because “standing involves a consideration of whether a

  plaintiff has asserted a legal basis on which a claim for relief can be

  predicated, the question of standing must be determined prior to a

  decision on the merits.” Id. (citation omitted). In other words,

  standing concerns a court’s subject matter jurisdiction; thus, it is a

  question we review de novo. Friends of the Black Forest Reg’l Park,

  Inc. v. Bd. of Cty. Comm’rs, 80 P.3d 871, 876 (Colo. App. 2003).

¶ 11   Colorado’s Administrative Procedure Act (APA) provides

  judicial review for parties that are “adversely affected or aggrieved”


                                     4
  by “[f]inal agency action.” § 24-4-106(1)-(2), C.R.S. 2018. To have

  standing, a party must suffer an injury-in-fact to a legally protected

  interest; an “interest is legally protected if the constitution, common

  law, or a statute, rule, or regulation provides the plaintiff with a

  claim for relief.” Reeves v. City of Fort Collins, 170 P.3d 850, 851

  (Colo. App. 2007). And while the injury-in-fact cannot be overly

  indirect, incidental, or a remote, future possibility, the injury may

  be intangible, such as an aesthetic injury. Ainscough v. Owens, 90

  P.3d 851, 856 (Colo. 2004).

¶ 12   The Oil and Gas Conservation Act (the Act) provides that “[a]ny

  rule, regulation, or final order of the commission shall be subject to

  judicial review in accordance with [the APA].” § 34-60-111, C.R.S.

  2018 (citing § 24-4-106). And Commission Rule 305.e.(3) states

  that if the approval of a Form 2A “is not suspended . . . the

  issuance of the approved Form 2 or Form 2A by the Director shall

  be deemed a final decision of the Commission, subject to judicial

  appeal.” Dep’t of Nat. Res. Rule 305.e.(3), 2 Code Colo. Regs. 404-

  1.




                                     5
                               B.   Analysis

¶ 13   The Commission argues that the APA — as a procedural act —

  and the Act do not grant Petitioners a legally protected interest;

  therefore, they cannot seek judicial review of the Commission’s

  Form 2A permit authorizations. The Commission contends that

  permits are not “final orders” under section 34-60-111, and thus

  are not subject to the Act’s judicial review provision. In making this

  argument, it relies on Colo. Oil & Gas Conservation Comm’n v.

  Grand Valley Citizens’ All., 2012 CO 52, ¶ 3 (GVC), which held that

  because permits are separately governed by section 34-60-106(1)(f),

  C.R.S. 2018, section 34-60-108(2), C.R.S. 2018, which provides

  that “[n]o rule, regulation, or order . . . shall be made by the

  commission without a hearing,” does not apply to permits; thus, a

  citizens group was not entitled to request a hearing on a permit-to-

  drill application.

¶ 14   The Commission argues that because the APA treats permits

  as “licenses,” section 24-4-104, C.R.S. 2018, applies instead, which




                                     6
only contemplates judicial review for permit applicants. 2

Additionally, the Commission contends that Rule 503.b. has

expanded the class of persons who may request a hearing on a

Form 2A application to include (1) the permit applicant, (2) the

owners of the surface rights, and (3) the local government with land

use authority over the proposed development. Dep’t of Nat. Res.

Rule 503.b., 2 Code Colo. Regs. 404-1. However, the Commission

reasons that because citizen groups like Petitioners are not

included in the three classes of persons entitled to request a

hearing, neither the APA, the Act, nor the Commission rules give

Petitioners a legally protected interest to seek judicial review of

permit approvals. The Commission’s brief ignores Rule 305.e.(3) —

designating an approved Form 2A a final Commission decision

subject to judicial review — altogether.




2 Section 24-4-104(9), C.R.S. 2018, provides that “[i]f an application
for a new license is denied without a hearing, the applicant, within
sixty days after the giving of notice of such action, may request a
hearing before the agency as provided in section 24-4-105, and the
action of the agency after any hearing shall be subject to judicial
review as provided in section 24-4-106.”

                                   7
¶ 15   We agree with the Commission that the APA alone does not

  provide a substantive claim for relief. 3 See Romer v. Bd. of Cty.

  Comm’rs, 956 P.2d 566, 576 (Colo. 1998) (“[T]he APA does not

  create substantive legal rights on which a claim for relief can be

  based.”). However, the Act provides that any “final order of the

  commission shall be subject to judicial review in accordance with

  section 24-4-106” where the relevant APA provision states that

  parties “adversely affected or aggrieved by agency actions” may seek

  judicial review. § 34-60-111 (citing § 24-4-106). Commission Rule

  305.e.(3) likewise recognizes, without limitation, that when the

  Commission’s Director approves a Form 2A application, his decision

  is deemed to be a final Commission decision subject to judicial



  3 To the extent that the Commission takes issue with the part of the
  district court’s judgment that held that Nat’l Wildlife Fed’n v. Cotter
  Corp., 665 P.2d 598 (Colo. 1983), rejected the notion that plaintiffs
  must have a private right of action to have standing, we agree with
  the Commission that the APA alone cannot provide plaintiffs with a
  legally protected interest. See Romer v. Bd. of Cty. Comm’rs, 956
  P.2d 566, 576 (Colo. 1998). But, we need not address this
  argument further because we affirm the district court’s judgment on
  other grounds. See, e.g., Rush Creek Sols., Inc. v. Ute Mountain Ute
  Tribe, 107 P.3d 402, 406 (Colo. App. 2004) (recognizing that we may
  affirm the trial court’s ruling based on any grounds that are
  supported by the record).

                                     8
  review. Because Petitioners established injuries-in-fact to legally

  protected interests under the APA and section 34-60-111 of the Act,

  the district court did not err in holding that Petitioners had

  standing to seek judicial review of the Commission’s permit

  approvals. 4

¶ 16   To the extent that the Commission relies on Rule 503.b. and

  GVC, both are inapplicable here because Petitioners did not request

  a hearing. GVC held that non-permit applicants may not seek a

  hearing under section 34-60-108 because the term “order” in that

  provision does not encompass permits. GVC, ¶ 18. This is a

  separate issue from whether section 34-60-111’s judicial review

  authorization of “final orders” encompasses permits. GVC also did

  not foreclose the possibility that, for APA purposes, a permit can be

  an order. See GVC, ¶ 13.



  4 Although it is unclear whether the district court found that all
  Petitioners established injuries-in-fact to legally protected interests,
  we affirm because at least one of the Petitioner organizations
  successfully established an injury-in-fact to a legally protected
  interest. See Village of Arlington Heights v. Metro. Hous. Dev. Corp.,
  429 U.S. 252, 264 n.9 (1977) (recognizing that because “at least one
  individual plaintiff” demonstrated standing, the court “need not
  consider whether the other individual and corporate plaintiffs have
  standing to maintain the suit”).
                                     9
¶ 17   Petitioners are members of organizations that have aesthetic,

  recreational, health, and environmental interests in the proposed

  development location, and they offered numerous declarations from

  members — including nearby residents with children attending

  Bella Romero — on how the expected air and noise pollution from

  Extraction’s proposed development would negatively impact their

  interests. Thus, Petitioners established that the Commission’s

  approval of Extraction’s Form 2A applications would create an

  injury-in-fact. See Ainscough, 90 P.3d at 856; Nat’l Wildlife Fed’n v.

  Cotter Corp., 665 P.2d 598, 604 (Colo. 1983) (holding that unlike

  members of an organization with a mere “interest in a problem” that

  do not have standing, organization members who face threat of

  injury have standing because their “alleged injuries are to personal

  health, and are sufficient to establish that [they] are adversely

  affected or aggrieved”). This is so especially where Petitioners

  effectively challenged the Commission’s compliance with the

  governing regulatory framework.5 See Nat’l Courier Ass’n v. Bd. of



  5Although Petitioners do not cite Commission Rule 522.a and
  522.b(1)(E), that rule could also provide relief. See Dep’t of Nat.

                                    10
  Governors of Fed. Reserve Sys., 516 F.2d 1229, 1241 (D.C. Cir.

  1975) (“Private parties and reviewing courts alike have a strong

  interest in fully knowing the basis and circumstances of an agency’s

  decision.”); see also Geer v. Stathopulos, 135 Colo. 146, 154, 309

  P.2d 606, 611 (1957) (recognizing that a court reviewing agency

  action should have the same information available to the agency to

  allow the reviewing court to “be in the same position as the agency”

  in considering “the problem successively confronting agency and

  court”).

¶ 18   The Commission’s argument that the Act does not offer

  Petitioners a legally protected interest — specifically that section

  34-60-111, which authorizes judicial review of “final orders,” does

  not encompass permits — is unsupported by Colorado law. Cf.

  Dep’t of Nat. Res. Rule 305.e.(3), 2 Code Colo. Regs. 404-1. We are

  not, of course, bound by an agency’s interpretation that is contrary

  to the plain meaning of the governing statute. See People v.

  Rockwell, 125 P.3d 410, 420 (Colo. 2005). And, section 34-60-111




  Res. Rule 522.a., 522.b.(1)(E), 2 Code Colo. Regs. 404-1 (alleged
  violation of a Commission regulation is actionable).
                                    11
  authorizes judicial review of final orders “in accordance with” the

  APA, and the APA defines an agency “order” as “the whole or any

  part of the final disposition (whether affirmative, negative,

  injunctive, or declaratory in form) by any agency in any matter

  other than rule-making.” § 24-4-102(10), C.R.S. 2018; see also

  Dep’t of Nat. Res. Rule 305.e.(3), 2 Code Colo. Regs. 404-1; Marks v.

  Gessler, 2013 COA 115, ¶ 29 (“[T]he APA serves as a gap-filler, and

  its provisions apply to agency actions unless they conflict with a

  specific provision of the agency’s statute or another statutory

  provision preempts the provisions of the APA.”) (citation omitted)

  (cert. granted June 23, 2014); Roosevelt Tunnel, LLC v. Norton, 89

  P.3d 427, 430 (Colo. App. 2003) (holding that because the relevant

  substantive statute “expressly incorporate[ed] the APA procedures,”

  the plaintiff could obtain judicial review of the Colorado Water

  Quality Control Division’s failure to rule on his discharge permit

  application because the APA defined “action” to include a “failure to

  act”).

¶ 19       Because the Commission’s approval of Extraction’s Form 2A

  permit applications allowed Extraction to conduct its operations at


                                     12
  the proposed site, it was a “final order” subject to judicial review

  under section 34-60-111. See Dep’t of Nat. Res. Rule 305.e.(3), 2

  Code Colo. Regs. 404-1; see also Colo. Ground Water Comm’n v.

  Eagle Peak Farms, Ltd., 919 P.2d 212, 218-19 (Colo. 1996) (relying

  on the APA’s definition of “order” where the relevant substantive

  statute did not define the term and the APA defines “orders” to

  include agency “‘decisions’ other than rulemaking”); see also

  Chittenden v. Colo. Bd. of Soc. Work Exam’rs, 2012 COA 150, ¶ 26

  (“For agency action to be final pursuant to section 24-4-106(2), it

  must (1) mark the consummation of the agency’s decision-making

  process and not be merely tentative or interlocutory in nature, and

  (2) constitute an action by which rights or obligations have been

  determined or from which legal consequences will flow.”).

¶ 20   Unlike agency action that is “committed to agency discretion

  by law” and thus precludes judicial review,6 the express purpose of



  6 Here, there is a legal standard for us to apply. See Carter v. Small
  Bus. Admin., 40 Colo. App. 271, 273, 573 P.2d 564, 567 ( 1977)
  (recognizing that “whether an agency’s action is ‘committed to
  agency discretion by law,’ depends upon whether some type of legal
  standard can be found or implied by which to hold the agency
  accountable” where a “legal standard may be implied from statutory

                                     13
  section 34-60-111 is to provide an avenue for “adversely affected or

  aggrieved” parties to obtain judicial review of final Commission

  decisions. See Marks, ¶ 29 (“[I]f the APA is applicable to a

  particular agency, both the APA and statutes specific to that agency

  should be read together and harmonized to the extent possible.”)

  (citation omitted); Richmond Petroleum, Inc. v. Oil & Gas

  Conservation Comm’n, 907 P.2d 732, 734 (Colo. App. 1995)

  (recognizing that the “purpose” of section 34-60-111 is to provide

  “claims for judicial review” of “final agency action” according to

  section 24-4-106 of the APA).

¶ 21   Because the Commission’s authorization of Extraction’s

  permits constituted a “final order” under section 34-60-111 and

  Rule 305.e.(3), and Petitioners demonstrated that approval of the

  permits would result in an injury-in-fact to their aesthetic,

  environmental, recreational, and health interests — legitimate

  interests for purposes of standing — the Act allows Petitioners to

  challenge the Commission’s permit approvals via the APA. See




  language, underlying legislative objectives, and the nature of the
  action authorized or regulated”).
                                    14
  Franklin v. Massachusetts, 505 U.S. 788, 796 (1992) (recognizing

  that the purpose of the federal APA is to set forth the procedures by

  which agencies “are accountable to the public and their actions

  subject to review by the courts”); Colo. Envtl. Coal. v. Wenker, 353

  F.3d 1221, 1228 (10th Cir. 2004) (“Exemption from judicial review

  of agency decisions is narrow.”).

¶ 22   Accordingly, because Petitioners established an injury-in-fact

  to a legally protected interest, the district court properly held that

  Petitioners had standing to seek judicial review of the Commission’s

  permit approvals.

                            III.     Petitioners’ Appeal

¶ 23   Petitioners argue that the district court erred when it found

  that the Commission did not act arbitrarily and capriciously by

  failing to (1) consider public comments, and (2) comply with its own

  setback rules. We disagree.

                       A.          Additional Background

¶ 24   The Commission is charged with regulating oil and gas

  resource production in Colorado. See § 34-60-105, C.R.S. 2018.

  Specifically, the Act authorizes the Commission to regulate “[t]he

  drilling, producing, and plugging of wells and all other operations
                                          15
  for the production of oil and gas.” § 34-60-106(2)(a). And the

  General Assembly has declared that it is in the public interest to

  “[f]oster the responsible, balanced development, production, and

  utilization of the natural resources of oil and gas in the state of

  Colorado in a manner consistent with protection of public health,

  safety, and welfare, including protection of the environment and

  wildlife resources.” § 34-60-102(1)(a)(I), C.R.S. 2018.

¶ 25   Following an amendment to the Act, the Commission amended

  its rules, including Rule 305, see Dep’t of Nat. Res. Rule 305, 2

  Code Colo. Regs. 404-1, to allow for public comment on permit

  applications to ensure that permitting decisions “are better

  informed and more protective of public health, safety, and welfare,

  including the environment and wildlife resources.” Oil & Gas

  Conservation Comm’n, Statement of Basis, Specific Authority, and

  Purpose, 2 Code Colo. Regs. 404-1 (superseded May 30, 2011). 7

¶ 26   The Commission’s purpose statement — discussing Rule 305’s

  amendment — stated,




  7 The Commission’s purpose statement explains its amendments to
  the old rule.
                                     16
             Amended Rule 305 significantly enhances the
             transparency of the permitting process by
             providing that the entire Form 2A will be
             posted on the [Commission’s] web-site, by
             extending individualized notice to the CDPHE,
             CDOW, surface owners, and the owners of
             surface property within 500 feet of the
             location, and by providing at least a 20 day
             period for receipt and consideration public
             comment.

  Id. The Commission also stated that it

             will accept and post any comments it receives
             on the Form 2A or any associated Form 2.
             Although [the Commission] will consider such
             comments, it does not anticipate responding to
             them.

  Id.

¶ 27    Also relevant to this appeal, in 2013, the Commission

  promulgated “setback” rules, see Dep’t of Nat. Res. Rule 604, 2

  Code Colo. Regs. 404-1, concerning siting requirements for oil and

  gas facilities. The express purpose of the setback rules was to

             provide strong protective measures, including
             notice and communication requirements,
             without imposing undue costs or restrictions
             on oil and gas exploration and production
             activities in the state.

             The Setback Rules are intended to require
             Operators to eliminate, minimize, or mitigate
             the impacts of oil and gas operations
             conducted in Designated Setback Locations by
                                   17
            utilizing technically feasible and economically
            practicable protective measures.

            ....

            These Setback Rules are not intended to
            address potential human health impacts
            associated with air emissions related to oil and
            gas development.

  See Oil & Gas Conservation Comm’n, Statement of Basis, Specific

  Authority, and Purpose, 2 Code Colo. Regs. 404-1 (superseded

  February 11, 2013).

¶ 28   The Commission defined “designated setback location” as “a

  term of art for all proposed Oil and Gas Locations located within, or

  proposed to be located in, any Buffer Zone Setback, an Exception

  Zone, within [1000 feet] of a High Occupancy Building Unit, or

  within 350’ of a Designated Outside Activity Area.” Id.

¶ 29   After receiving public comments on Extraction’s two Form 2A

  applications, the Commission requested additional information from

  Extraction, which revised several of its best management practices

  (BMPs) to respond to the issues the Commission identified.

¶ 30   Extraction provided a siting rationale explanation to the

  Commission and discussed its compliance with the setback

  regulations:
                                   18
            The facility for the Vetting 15-H well pad has
            been positioned to meet [the Commission]
            setbacks from both Building Units and High
            Occupancy Building Units. The facility is
            located over 1,300 feet from the closest high
            occupancy building unit and over 700’ from
            the two closest building units. Additionally the
            facility has been located to achieve the greatest
            setback possible from the limits of the school
            property located to the northwest, yet as far as
            possible from the residential homes located to
            the south and east.

  Extraction’s siting rationale also discussed the alternative locations

  it considered:

            The Vetting location is the alternate location to
            previously permitted locations, the South
            Greeley Directional and Gilbert pads. The
            Vetting Location was chosen as the best site
            available because we are able to utilize more of
            our preferred [BMPs], many of which are
            mutually beneficial for the community and for
            Extraction[.]

       B.   Preservation, Standard of Review, and Applicable Law

¶ 31   The parties agree that Petitioners preserved both issues for

  appeal.

¶ 32   We review a district court’s decision under the APA and

  whether the record contains sufficient evidence to support the

  agency’s decision de novo. Farmer v. Colo. Parks & Wildlife Comm’n,

  2016 COA 120, ¶ 12; Chase v. Colo. Oil & Gas Conservation
                                    19
  Comm’n, 2012 COA 94, ¶ 21. Accordingly, we “sit in the same

  position as the district court and review the agency’s decision for

  abuse of discretion.” Farmer, ¶ 12.

¶ 33   In reviewing an agency’s decision, we view the record in the

  light most favorable to the agency, and we defer to the agency’s

  factual findings unless they are unsupported by the record or fail to

  abide by the statutory scheme. Id. at ¶ 13; Chase, ¶ 21.

  Additionally, we defer to an agency decision that involves “factual

  and evidentiary matters within an agency’s specialized or technical

  expertise.” Rags Over the Ark. River, Inc. v. Colo. Parks & Wildlife

  Bd., 2015 COA 11M, ¶ 55. Thus, if conflicting inferences can be

  drawn from the record evidence, we will not second guess an

  agency’s choice between two opposing views. Colo. Motor Vehicle

  Dealer Licensing Bd. v. Northglenn Dodge, Inc., 972 P.2d 707, 715

  (Colo. App. 1998).

¶ 34   The Commission is a creature of state statute and has only the

  powers conferred on it by the Act. Chase, ¶ 26. The Act grants the

  Commission broad jurisdiction and empowers it to “make and

  enforce rules, regulations, and orders” and “do whatever may


                                    20
  reasonably be necessary to carry out the provisions” of the Act. §

  34-60-105(1). After enacting regulations, an agency is bound by

  them. Rags Over the Ark. River, Inc., ¶ 25.

¶ 35   We overturn an administrative agency’s determination only if

  we conclude that the agency “abused its discretion or when the

  decision was arbitrary and capricious, based on findings of fact that

  were clearly erroneous, unsupported by substantial evidence, or

  otherwise contrary to law.” Farmer, ¶ 13. An agency acts

  arbitrarily and capriciously when it fails to comply with its own

  regulations. Rags Over the Ark. River, Inc., ¶ 26. We afford an

  agency’s interpretation of its own rules great deference and accept

  the interpretation “if it has a reasonable basis in law and is

  warranted by the record, but not if the rule clearly compels the

  contrary result.” Chase, ¶ 23.

¶ 36   When construing an agency’s regulation, we follow principles

  of statutory interpretation by looking first to the rule’s language to

  analyze the words and phrases according to their plain and

  ordinary meaning. Id. at ¶ 22. “This is consistent with

  [Commission] Rule 100, which states that all words not otherwise


                                    21
  defined but used in [the Commission] rules ‘shall be given their

  usual customary and accepted meaning, and all words of a

  technical nature, or peculiar to the oil and gas industry, shall be

  given that meaning which is generally accepted in said oil and gas

  industry.’” Id.

                              C.   Analysis

                         1.    Public Comments

¶ 37   Petitioners argue that the district court erred when it held that

  the Commission was not required to respond to substantive public

  comments. They contend that the Commission was obligated to

  respond to substantive public comments because it must make a

  record of its decision-making process to show that it considered

  public comments, as required by its rules. See Dep’t of Nat. Res.

  Rule 305.b.(1)(B), 2 Code Colo. Regs. 404-1 (setting Form 2A

  deadlines “by which public comments must be received to be

  considered”); see also Chase, ¶ 59 (reversing the Commission’s

  decision because the court lacked “sufficiently detailed findings of

  facts, including assessments of the evidence and testimony, and

  conclusions of law . . . to allow meaningful review on appeal”).


                                    22
¶ 38   Petitioners further contend that the Commission failed to

  adequately address public concerns regarding (1) health threats to

  the Bella Romero students, (2) the need for an emergency response

  plan to protect students and faculty, and (3) the need to consider

  alternative locations; thus, the Commission failed to make a

  sufficient record showing consideration of these site-specific public

  concerns.

¶ 39   We agree that the Commission is required to document its

  decision-making process but conclude that here the Commission

  fulfilled its obligations to document its consideration of public

  comments.

¶ 40   The administrative record reflects that the Commission

  considered and responded to public concerns regarding (1) Bella

  Romero students’ health, (2) Extraction’s emergency response plan,

  and (3) alternative siting.

¶ 41   First, the Commission’s “Memo to File” discussed public

  comments regarding Bella Romero students’ health and the

  measures taken by Extraction to protect public health and safety.

  Specifically, the Commission “prescribed Condition[s] of Approval


                                    23
(COAs) to eliminate, minimize or mitigate potential adverse impacts

to public health, safety, and welfare, including the environment,

that were not otherwise addressed by [Commission] Rules or

operator proposed [BMPs].” The Commission also noted that the

location complied with the agency’s setback rules as the “nearest

production facility on the Vetting Facility location will be [1364] feet

from the Bella Romero School building,” and thus the facilities’

location did not require a hearing. See Dep’t of Nat. Res. Rule

604.a.(3), 2 Code Colo. Regs. 404-1 (stating that no production

facility “shall be located one thousand [1000] feet or less from a

High Occupancy Building Unit without Commission approval

following Application and Hearing”). The Commission

acknowledged that the public was concerned that the school’s

playground and sporting fields were less than 1000 feet from the

proposed development, but it explained that its setback rules “do

not address a setback to the property boundary or playground

associated with High Occupancy Building Units, only the building

itself.”




                                   24
¶ 42   Second, regarding an emergency response plan, the

  Commission requested further information from Extraction on how

  it proposed to ensure “the safety and welfare of the students and

  faculty of the Bella Romero school during an emergency.” In

  response, Extraction discussed how it would continue to work with

  the Greeley Fire Department “to add training, tours, drills,

  inspection or other components” benefiting the students’ safety in

  the event of an emergency. The Commission aptly noted — and

  Petitioners could not contradict — that it was not the appropriate

  agency to carry out these emergency measures.

¶ 43   Third, the Commission requested further information from

  Extraction on “alternative locations further away . . . and why those

  other locations were not chosen.” In response, Extraction

  discussed the alternative “previously permitted locations” that it

  considered — the South Greeley Directional and Gilbert pads — but

  Extraction ultimately decided the requested location was “the best

  site available because we are able to utilize more of our preferred

  [BMPs], many of which are mutually beneficial for the community

  and for Extraction.” Specifically, the Vetting location allowed


                                    25
  Extraction to reduce noise and traffic pollution as compared to the

  other considered locations because the Vetting location allowed for

  (1) easy access to Highway 34, allowing truck traffic to avoid driving

  by Bella Romero; (2) closer proximity to irrigation ditches,

  eliminating the need for water trucks to drive to the Vetting

  location; (3) closer proximity to existing electric infrastructure,

  eliminating noise that would result if combustion generators were

  used; and (4) closer proximity to existing oil and gas pipeline

  infrastructure, allowing Extraction to move the oil by pipeline

  instead of relying upon trucks.

¶ 44   Additionally, Extraction altered several of its BMPs because of

  Commission concerns and requests for more detailed information

  following public comments. For example, the Commission asked

  Extraction if it would commit to using remote shut-off capabilities

  of the production facilities to protect the health and safety of nearby

  residents in case of an emergency. Extraction added a BMP to its

  operational system “to allow remote shut in, remote monitoring, and

  off-site response to emergencies.” Several of the approved BMPs

  were in direct response to Petitioners’ requests. For example, in


                                     26
  Sierra Club’s comments on the Form 2A applications, it stated that

  the facilities should be subjected to an instrument-based leak

  detection and repair inspection at least once a year and use volatile

  organic compound (VOC) destruction with at least 95% efficiency on

  all tanks capable of emitting over two tons of VOCs annually. The

  Commission’s file memorandum noted that Extraction’s BMPs

  included “conducting regularly scheduled inspections of equipment

  to identify liquid leaks, using a low VOC level base fluid for their oil-

  based mud drilling fluid . . . and using Emission Control Devices

  and Vapor Recovery Units capable of reducing VOC emissions by at

  least 95%.”

¶ 45   To the extent that Petitioners argue that the Commission’s

  decision runs counter to the evidence because the Commission

  failed to provide a written response to studies submitted by

  Petitioners, the agency implicitly considered and rejected those

  studies as irrelevant to the permits at issue. See Northglenn Dodge,

  Inc., 972 P.2d at 716 (“The absence of [specific] findings by an

  administrative board is not fatal to a decision if there is evidence in

  the record which supports its decision” where an agency’s “express


                                     27
  findings, taken together with reasonable implications based upon

  its assessment of the totality of the evidence presented” provide

  sufficient basis for the decision.) (citation omitted); Hudspeth v. Bd.

  of Cty. Comm’rs, 667 P.2d 775, 778 (Colo. App. 1983) (“The absence

  of express findings by [an agency] does not affect the validity of the

  decision where the necessary findings are implicit in the action

  taken.”). The record discloses that several of the referenced studies

  related to locations outside of Weld County; indeed, some studies

  discussed impacts from out-of-state oil and gas development.

  Additionally, Petitioners’ less recent submitted studies could have

  less relevance to the Commission’s 2017 permit approvals.

¶ 46   While Petitioners may believe that the Commission wrongly

  concluded that Extraction took sufficient mitigation measures to

  protect public health and safety, we may not substitute our

  judgment for the Commission’s. See Rags Over the Ark. River, Inc.,

  ¶ 55; Chase, ¶ 21. Because the record evidences the Commission’s

  consideration of public comments on site-specific concerns, as

  required by Rule 305, we cannot conclude that the district court




                                    28
  erred in concluding that the Commission did not act arbitrarily and

  capriciously in authorizing the Form 2A permits. See Farmer, ¶ 13.

                               2.    Setback

¶ 47   Petitioners next argue that the district court erred when it

  found that the Commission complied with its own setback rules.

  See Dep’t of Nat. Res. Rule 604.c.(2)(E)(i), 2 Code Colo. Regs. 404-1

  (“Multi-well production facilities shall be located as far as possible

  from Building Units.”). Petitioners contend that Rule 604.c.(2)(E)(i)

  — as previously interpreted by the Commission — requires an

  alternative site analysis, and thus the Commission acted arbitrarily

  and capriciously by not requiring Extraction to conduct an

  alternative site analysis before granting the permits. Petitioners

  also contend that Commission Rule 305A supports this argument

  because it requires that a Large Urban Mitigation Area (LUMA)

  facility’s siting rationale include “a description of other sites

  considered and the reasons such alternate sites were rejected.”

  Dep’t of Nat. Res. Rule 305A.b.(2), 2 Code Colo. Regs. 404-1.

¶ 48   Petitioners cite no previous Commission decision or

  rulemaking statement to support their argument that the


                                     29
  Commission has previously interpreted Rule 604.c.(2)(E)(i) as

  requiring an alternative site analysis. Rather, Petitioners rely on

  Form 2A to support their argument. Form 2A states that if permit

  applicants’ proposed production facilities are to be located less than

  1000 feet from a building unit, Rule 604.c.(2)(E)(i) requires that “the

  operator must evaluate alternative locations for Production

  Facilities that are farther from the Building Unit.”

¶ 49   But Form 2A also states that in conducting this “alternative

  location” evaluation, the applicant must “certify that no alternative

  placements for the Production Facilities, farther from the nearest

  Building Unit, were available based on the analysis conducted

  pursuant to Rule 604.c.(2)(E)(i).” Thus, Form 2A clarifies the

  meaning of “alternative locations” to require only an analysis of

  whether “alternative placements” exist within the proposed location.

  See Oil & Gas Conservation Comm’n, Statement of Basis, Specific

  Authority, and Purpose, 2 Code Colo. Regs. 404-1 (superseded

  February 11, 2013) (stating that Rule 604.c.(2)(E)(i) is intended to

  require permit applicants “to eliminate, minimize, or mitigate the

  impacts of oil and gas operations conducted in Designated Setback


                                    30
  Locations”) (emphasis added). Rule 604.c.(2)(E)(i)’s plain language

  also supports this interpretation, as it requires sites to be located

  “as far as possible” from a building unit. In contrast, Rule 305A

  requires “a description of other sites considered and the reasons

  such alternate sites were rejected.” See Chase, ¶ 22. The record

  shows that locating the permitted facilities farther from the school

  would only place the facilities closer to residences or to land the

  City of Greeley had designated for other use.

¶ 50   And we disagree with Petitioners that the district court erred

  when it found that Rule 305A was inapplicable here and that it did

  not support Petitioners’ argument that an alternative site analysis

  was required. As Petitioners acknowledge in their opening brief,

  Rule 305A serves a distinct purpose from Rule 604 and contains

  separate requirements. Rule 305A serves to ensure adequate local

  government notification and consultation for LUMA facilities. See

  Dep’t of Nat. Res. Rule 305A, 2 Code Colo. Regs. 404-1. The

  subject site is not a LUMA, and Extraction previously reached an




                                    31
  agreement with the City of Greeley regarding the facilities’ location.

  Rule 305A’s requirements were simply inapplicable here.8

¶ 51   We also reject Petitioners’ contention that the district court

  erred by relying on a prior district court decision — Neighbors

  Affected by Triple Creek v. Colo. Oil & Gas Conservation Comm’n,

  (Dist. Ct. No. 16CV34274, Aug. 23, 2017) (unpublished order)

  (Triple Creek) — in holding that Rule 604.c.(2)(E)(i) does not require

  an alternative site analysis. Petitioners reason that because Triple

  Creek involved a LUMA site, whereas Extraction’s permit

  applications did not, the court erred in relying on Triple Creek.

¶ 52   The district court only relied on relevant portions of Triple

  Creek. Triple Creek involved a similar analysis where the court

  rejected the plaintiff’s argument that Rule 604 required an

  alternative site analysis to ensure that the production facility was



  8 Even though Extraction was not required to justify why the
  Vetting location was selected over the South Greeley Directional and
  Gilbert pad sites, the record reveals that Extraction considered, but
  ultimately rejected, two other sites, in part because of (1) better
  highway access to allow Extraction’s trucks to get off local roads
  faster and potentially avoid local roads altogether; (2) closer
  proximity to electric infrastructure to avoid using combustion
  generators to power the drilling rig; and (3) technical concerns with
  accessing the mineral reserves at the other two sites.
                                    32
sited “as far as possible” from building units. See Triple Creek, No.

16CV34274, slip op. at 4 (“The requirements of Rule 305 specifically

relate to the location of the entire site, whereas Rule 604 relates to

the siting of the production facilities once the site has already been

chosen. This is supported by the language of Form 2A and the

language of the Rules.”). Additionally, Petitioners cannot

simultaneously argue that Rule 305A — governing LUMA facilities

— applies here and supports their argument that Rule 604.c.(2)(E)(i)

requires an alternative site analysis, while also arguing that the

court erred in relying on Triple Creek because it involved a Rule

305A analysis. See Erskine v. Beim, 197 P.3d 225, 229 (Colo. App.

2008) (recognizing that parties are required to maintain consistent

positions throughout litigation to assure the promotion of truth and

prevent parties from “deliberately shifting positions to suit the

exigencies of the moment”) (citation omitted). Even assuming that

the district court erred in relying on Triple Creek, we need not

address this argument further because, as explained here, we

affirm the court’s judgment on other grounds. See, e.g., Rush Creek

Sols., Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406 (Colo. App.


                                  33
  2004) (recognizing that we may affirm the trial court’s ruling based

  on any grounds that are supported by the record).

¶ 53   Given that (1) the agency’s proffered interpretation is

  reasonable in light of the Form 2A language and requirements of

  Rule 604.c.(2)(E)(i), and (2) Petitioners failed to identify an instance

  where the Commission previously interpreted Rule 604.c.(2)(E)(i) as

  requiring an alternative site analysis, we cannot conclude that the

  agency failed to comply with its own regulations in authorizing

  Extraction’s Form 2A permits without requiring Extraction to

  conduct an alternative site analysis. See Chase, ¶¶ 22-23.

¶ 54   Accordingly, we affirm the district court’s judgment that the

  Commission did not act arbitrarily and capriciously in authorizing

  the Form 2A permits. See Farmer, ¶ 13.

                             IV.   Conclusion

¶ 55   The judgment is affirmed.

       JUDGE FREYRE and JUDGE WELLING concur.




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