New Colorado Regulatory Push Could Again Imperil State Jobs, Economy
Posted March 20, 2019
Though Colorado has set the gold standard for state regulation of natural gas and oil, some don’t think that’s enough.
Opponents of oil and natural gas are pushing state legislation to let local governments have regulatory authority over industry – “local control” – which in other states has been a way to curtail energy development. If enacted in a state that ranks top 10 in the country in natural gas and oil production, it could have big negative impacts for the state and nation.
Some of the same interests tried unsuccessfully to hamstring safe energy production through a ballot initiative last fall. Now this misguided bid. Chris McGowne, Colorado Petroleum Council associate director, in testimony before the state’s House Energy & Environment Committee:
“SB 181 contains the most overreaching local control provisions of any proposal we have ever reviewed. It turns constitutional home rule principles on their head, eliminates state expertise in siting and regulation, and all but guarantees that industry will be forbidden from operating in certain jurisdictions.”
According to an analysis by the REMI Partnership – a coalition that includes the Colorado Association of REALTORS, the Colorado Bankers Association, Colorado Concern, the Common Sense Policy Roundtable and the Denver South Economic Development Partnership – the bill could create regulatory uncertainty by allowing for new natural gas and oil rules at both the state and local level. The bill eliminates technical feasibility and cost effectiveness as criteria for permitting decisions and even halts most permitting until new rulemakings are completed, a process that could take years.
Impacts are being felt even before SB 181 passes the legislature. Anticipating the measure, the Adams County Board of Commissioners scheduled a last-minute vote, with the minimum 24-hour notice to the public, and approved a six-month moratorium for considering new applications for natural gas and oil facilities. The county board enacted an identical ban just four months ago, during statewide debate over Proposition 112, which voters rejected in November.
McGowne said there are many ways local governments would be able to block development:
“[A] local government could simply run out the clock and prevent an operator from ever receiving a permit from the COGCC (Colorado Oil and Gas Conservation Commission). There are minimal sideboards on how far a local government can go. For example, they could conclude that unworkable half-mile or mile setbacks are needed to minimize adverse impacts, with no factual or scientific information that supports this argument. They could zone oil and gas out of any location from which oil and gas resources could be accessed. Local governments could insist on financial assurance that far exceeds what exists at the commission, to the extent that no underwriter would undertake such a policy.”
The bill could result in a patchwork of regulations across Colorado that could hinder energy development in, again, one of the nation’s top producing states. McGowne said it would “send a strong signal to all that Colorado is closed for business.”
In addition, there’s concern the COGCC could be flooded with new regulatory rulemakings in the coming years and would not have enough technological expertise on staff to deal with them.
The real-world impacts could be felt by Colorado residents and businesses. The REMI Partnership analysis found these potential impacts by 2030 if SB 181 shut down 50 percent of new natural gas and oil production:
- 120,000 fewer jobs across all sectors
- More than $8 billion in lost state and local tax revenue from 2020 through 2030
- More than $158 billion in lost GDP from 2020 through 2030
The potential losses grow if more production is blocked. Charting jobs:
And state GDP:
These are significant impacts to the state economy as well as revenue that supports essential public services. Colorado has shown key public protections and safe energy development go hand in hand. The analysis:
Colorado is a major energy producing state, but at the same time, we are also a leader in health, safety and environmental protections. For more than a decade, Colorado has shown that you do not have to choose between health, safety and the environment and a thriving energy sector. In fact, as the state developed and improved a regulatory framework viewed as the toughest in the nation, the energy sector has expanded significantly and supported growth in many other sectors across the economy.
This measure could threaten the economic viability of entire communities in Colorado, yet is sailing through the legislative process. That’s irresponsible. Democrats who lead the state legislature should ease back on the throttle to allow proper analysis of the bill’s potential effects and inputs from affected parties.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and five grandchildren.
- More On Demand and U.S. Production
- OPEC+ Turmoil Underscores Need for U.S. Oil Diplomacy
- Texas Flaring Coalition Enhances Industry’s Commitment to Reduce Emissions
- Keystone XL's Construction is Good for U.S., U.S. Energy
- Temporary Relief – To Prioritize Safety and Meet U.S. Energy Needs
- Don’t Bet Against U.S. Natural Gas and Oil
Stay informed: Sign-up for our weekly newsletter