Seventh Local Ban on Natural Gas and Oil Raises Uncertainty in Colorado

Mark Green
Posted May 30, 2019

A new Colorado law handing more control over natural gas and oil operations to municipalities, authority that used to reside with the state, risks another law – the law of unintended consequences – that could deal a serious blow to one of our country’s leading energy-producing states.

This week the city of Broomfield became the seventh Colorado community to impose a ban on new natural gas and oil development since introduction of Senate Bill 181, which became law last month. Broomfield’s six-month moratorium halts the municipal approval process for energy development until December. Officials said the ban is needed so that city ordinances can be updated.

Before SB 181’s passage, industry warned the law could disrupt responsible natural gas and oil development by hatching a patchwork, unpredictable regulatory system across the state – with the unintended consequence of imperiling energy development and jobs and economic growth. Regulatory uncertainty can chill sizeable investments in new operations that often have significant lead times

Unfortunately, that uncertainty appears to be growing in Colorado – with national implications because the state ranks sixth in both natural gas and oil production.

Lynn Granger, Colorado Petroleum Council executive director:

“We are disappointed that Broomfield City Council has chosen to impose a moratorium on new energy development. Its decision is misguided and harmful to our state. … We have and will continue to stand ready to engage in good faith discussions about Colorado’s energy future. We remain hopeful that Colorado’s local and state governments will do the same as the many elements of Senate Bill 181 are implemented in the months and years to come.”

When he signed SB 181 into law, Gov. Jared Polis said he hoped the legislation would end discord over energy development in Colorado. It’s doubtful that Coloradoans favor stunting safe and responsible natural gas and oil development, which has supported so many jobs, boosted tax rolls and funded municipal improvements – intent that was demonstrated last November when voters rejected an initiative that would have imposed severe limitations on development.

Yet, the early signs from SB 181 are concerning. When the legislation was being debated, proponents said it wouldn’t hinder development. The Broomfield moratorium, together with the other announced bans, seems to signal something else.

Colorado and the nation need safe and responsible energy development in Colorado to go forward. Granger said industry’s commitment to environmental stewardship hasn’t changed:

“Our industry prioritizes public health and safety and continues to take proactive measures to ensure that energy development is done safely and responsibly in collaboration with the priorities of Colorado communities.”

State officials pledged to work with industry to minimize SB 181’s potential negative impacts. They should follow through with that commitment to ensure that Colorado can continue to be an energy leader.