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Rocky Mountain Energy Summit examines intersecting industry issues

Economics juxtaposed with environmental concerns

DENVER – The theme of this year’s Rocky Mountain Energy Summit was evolution.

Stakeholders, including some of the most powerful oil and gas executives in the West, heard from politicians about how the evolving industry has intersected with evolving community and environmental concerns.

The timing of the three-day summit at the Colorado Convention Center in Denver was appropriate, given two proposals that could be approved or rejected for the November ballot as early as next week.

One proposal would allow local governments to overstep the state’s regulatory authority to enact stringent rules, including bans on fracking.

The second proposal would increase setbacks of wells from schools, hospitals and homes from 500 feet to 2,500 feet.

The industry has said that effort would put 95 percent of land in the top five oil-and-gas-producing counties in Colorado off limits. La Plata County would become almost completely barred from development, as 99.6 percent of land would be prohibited.

Gov. John Hickenlooper, a Democrat, supports fracking, and he has concerns with the two ballot proposals. In 2014, he struck a deal that kept initiatives off the ballot. The compromise was that a task force would meet to address the local control issue.

But the task force largely fell short in the eyes of industry opponents. The rule that came out of it requires operators to consult and register with local governments when building large facilities. But it did nothing to extend powers to local governments.

The Colorado Supreme Court in May ruled that state power trumps local rules and regulations, which has caused some local governments – including Boulder County – to re-examine moratoriums on oil and gas development.

But with groups continuing to push ballot proposals, the issue has so far not gone away.

Hickenlooper believes education and stakeholder processes have quelled some concerns. He doubts proponents will make the ballot this year, as groups submitted about 100,000 signatures per proposal to the secretary of state’s office. It takes 98,492 valid signatures to make the ballot, so there’s not much of a cushion.

“People get so swept up in the emotion of the moment and carried away by some image, or a fact, that turns out not to be a fact,” Hickenlooper said while speaking during a panel discussion at the summit. “What we should spend a lot of time trying to do is make sure the right information is out there.

“I think our environmental community has come a long way, and that they listen and they’re trying to look through a longer view.”

The governor fell back on a familiar theme of his, that fracking bans collide with state law, which protects private property and mineral rights.

“This isn’t China, this isn’t Russia, we don’t take people’s private property without compensating them,” Hickenlooper said.

Proponents, however, are far from convinced that fracking is safe, and they say the issue is hardly losing steam. Supporters of the initiatives say they faced a $15 million opposition campaign from the industry, which included counter canvassers clashing with signature gatherers.

“Our campaign had to battle every day to allow democracy to take its course,” said Lisa Trope, an organizer with Food and Water Watch, which led petition efforts.

In a sign that the debate continues, two environmental groups this week filed a court challenge to Interior Department approval of oil and gas leases on public land in three Western states, including Colorado.

While Hickenlooper has upset some in the anti-fracking world, he received praise from environmental groups this week for pushing state carbon pollution standards, despite the federal Clean Power Plan, which was delayed by the U.S. Supreme Court.

The governor at the summit defended a draft executive order, which would require a 35 percent reduction in carbon dioxide emissions from the power sector by 2030, as compared to 2012 levels. It’s similar to requirements mandated in the Clean Power Plan.

Federal regulations and politics

Even if the state enacts its own standards, much of the burden falls on federal regulators, which has tied into elections and politics.

The U.S. Chamber of Commerce floated a report at the energy summit that stated that a ban on energy production on federal lands would cost Colorado 50,000 jobs, $124 million in annual royalties and $8.3 billion in gross domestic product.

Former Democratic challenger Bernie Sanders forced Hillary Clinton and the Democratic Party further to the left on the oil and gas issue, moving them closer to a “keep it in the ground” platform.

The Clinton campaign says it is not pushing for a ban, just that “our long-term goal should be no extraction of fossil fuels on public lands.”

Proposals include reforms to fossil fuel leasing, a continued review of the federal coal program, prohibitions on development in the Arctic and Atlantic oceans, raising royalty rates and ensuring that new leasing accounts for the clean energy market.

In Colorado, the business world is concerned about the transition.

“The U.S. Chamber’s new report demonstrates how vital energy production on federal lands is to Colorado’s economy,” said Chuck Berry, president of the Colorado Association of Commerce and Industry. “It is critically important that those who seek to be our leaders understand the impact of their proposals and allow our state to maintain its position on leadership when it comes to energy production.”

U.S. Sen. Cory Gardner, a Republican, also spoke at the summit of the Chamber’s report.

“This debate that’s taking place in Colorado right now about whether or not we should ban fracking is an existential threat that we have to kill and we have to stop. But unfortunately, it’s not just a debate that’s taking place in Colorado,” Gardner said.

“We’ve heard at least one of our presidential candidates, Hillary Clinton, say ... ‘no future extraction on federal lands ...’ Think about what that means to jobs in this state.”

U.S. Sen. Michael Bennet, a Democrat who is running for re-election this year, took a more middle-of-the-road approach.

“Colorado truly is a state that can embrace all energy sources ...” Bennet said. “Colorado is particularly well positioned to have these markets because of industry-led efforts to protect Colorado’s air and water.”


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