Colorado Democrats hit oil, gas drilling industry
DENVER | For eight years, Colorado Gov. John Hickenlooper shielded the oil and gas industry from the salvos of the environmental left, but now there’s a new political regime in town with no love for fossil fuels.
Without the pro-fracking Mr. Hickenlooper to run interference, Colorado Democrats are poised to deliver a body blow to the state’s $31 billion oil and gas industry with Senate Bill 181, legislation aimed at prioritizing environmental and safety concerns that critics have described as a de facto prohibition on drilling.
“That bill, SB 181, make no mistake, it has nothing to do with public health and safety and everything to do with banning energy development in the state of Colorado,” Amy Oliver Cooke, executive vice president of the free market Independence Institute, said at a Friday protest rally in Greeley.
Still, nobody doubts that the measure will pass. The state Senate advanced the bill during Wednesday’s blizzard on a 19-15 party-line vote with one abstention, sending the measure to the House and one step closer to the desk of Gov. Jared Polis, a Democrat and longtime fracking foe who campaigned last year on 100 percent renewable energy by 2040.
Environmental groups cheered the vote. “The state Senate is showing real national leadership, showing other states how to protect communities from the public health and safety impacts of oil and gas extraction,” said Sam Gilchrist, western campaigns director at the National Resources Defense Council.
New York, Maryland and Vermont have gone further by prohibiting fracking, but unlike those states, Colorado has a major oil and gas industry presence. The nation’s fifth-largest producer of natural gas, Colorado fossil-fuel development supported nearly 233,000 jobs in 2015, according to the U.S. Energy Information Administration.
Colorado “is going to do something that hasn’t been done, and that is: a state with a very significant pool of gas and oil is going to make it a lot more difficult to mine it,” said Denver political analyst Floyd Ciruli.
“There is really now ample warning that the way this legislation is drafted, it’s essentially going to allow some level of a ban,” he said. “The public is clearly divided on this.”
Republicans, rural Coloradans and industry officials have warned of brutal economic consequences. A REMI Partnership study released Tuesday by industry groups estimated that a 50 percent reduction in production by 2030 would wipe out 120,000 jobs and $8 billion in state and local tax revenue.
“Let’s not forget that there will be pain if this bill passes,” state Sen. Rob Woodward, a Republican, said before Wednesday’s vote. “People will lose their jobs, people will lose their homes, people will lose their businesses. And as we all know when this happens, marriages will crumble, suicides will increase. It’s not a pretty picture.”
For Democrats, SB 181 is needed to avert another kind of crisis: global warming. They argue that the state will reap benefits by improving industry safety, decreasing noise and air pollution, and giving localities more control over drilling within their borders, allowing them to “prepare for the impacts of climate change.”
“Climate change is real. It’s happening. And we have a moral and economic imperative to act now,” House Speaker K.C. Becker said in a March 4 op-ed for the Boulder Daily Camera.
The state legislature’s actions this year caught some by surprise because voters in November defeated Proposition 112, a ballot measure to extend setbacks between structures and future drilling operations by 55 percent to 45 percent.
In other respects, the timing was entirely predictable. Even as voters axed Proposition 112, Democrats won control of all levers of state government, obliterating Republicans’ one-seat edge in the state Senate, padding their majority in the state House and sweeping the state constitutional offices.
And not just any Democrats. Ms. Becker and Senate Majority Leader Stephen Fenberg hail from Boulder, a famously liberal enclave, as does Mr. Polis. None has Mr. Hickenlooper’s background in oil and gas.
A geologist by training, Mr. Hickenlooper, a candidate for the 2020 Democratic presidential nomination, acted in his two terms as a mediator between the industry and his party’s left wing, overseeing tougher regulations while making clear his support for drilling by, for example, drinking fracking fluid to prove its safety.
In August 2014, the governor headed off a ballot war by persuading the multimillionaire Mr. Polis to drop his anti-fracking initiative drive shortly before signatures were due. In return, Mr. Hickenlooper formed a task force to work on minimizing conflicts between drilling operations and neighborhoods.
Still, the restrictions approved by the Colorado Oil Gas Conservation Commission during Mr. Hickenlooper’s tenure haven’t slowed the anti-fracking clamor. Nor has industry’s multimillion-dollar outreach campaign aimed at extolling the benefits of energy extraction and easing safety concerns.
One reason: the state’s changing demographics. Colorado has trended leftward in recent years, thanks in part to a booming economy that has spurred an influx of groups such as Californians and millennials.
“When you look at the demographic changes in the state and the fact that climate change has now become a civic religion with a significant number of people, it’s hard for gas and oil to compete in that environment no matter how good their PR is,” Mr. Ciruli said.
SB 181 would allow localities to impose restrictions more stringent than those of the state, charge the COGCC’s mission from fostering development to regulating the industry, load the panel with environmental specialists, repeal the industry’s noise exemption, and require more emissions monitoring and reductions.
“Colorado’s recent economic success shows that we can work hand in hand to protect our clean air and water and grow our economy at the same time,” Ms. Becker said.
After years of fracking skirmishes along the Front Range, environmental groups said the bill finally provides balance between industry priorities and the health of communities.
“This is a transformational step forward for a common sense, balanced approach to fracking in Colorado,” Colorado Sierra Club director Jim Alexee said in a statement. “We applaud leaders in the state Senate, and local officials across Colorado, for their bravery in the face of corporate special interests.”
Opponents have argued that only the state’s top producers, Anadarko Petroleum and Noble Energy, may be able to weather the increased regulatory costs and market uncertainty, but Mr. Fenberg denied rumors that leading companies were part of a behind-the-scenes “grand bargain.”
“It’s been suggested that there was some sort of deal that was cut; that several operators threw smaller members of the oil and gas industry under the bus for the benefit of a couple of the big guys,” Mr. Fenberg said during Wednesday’s floor debate. “That’s not true. I don’t know of any operators who support this bill.”
He promised to revisit the legislation after passage to address any “unintended consequences” on either side of the issue, which may prove politically prudent.
“If this turns out to be as economically devastating as talked about, mainly because it allows for actual banning, or incredibly draconian regulations, the oil and gas industry has choices. We’re not the only place they can drill, although we’re a good one,” Mr. Ciruli said. “And I think the Democrats will be vulnerable if that turns out to be true.”