In Colorado, where I lived until recently, state officials are doing their best to kneecap the “old energy economy” as they pursue their green dreams.
The administration of Gov. Bill Ritter used a couple of 2007 bills allowing modest revisions in the regulations controlling oil and gas production as the pretext to scrap the old rules and rewrite them, giving environmental activists and NIMBY types unprecedented powers to effectively veto oil and gas production on both public and private land. Oil and gas companies threatened litigation, arguing that the bill didn’t authorize such a sweeping change in the rules. So the legislature passed another bill earlier this year codifying the new regulations. (And the industry sued anyway.)
This is a big deal in Colorado because in 2007, an institute affiliated with the Colorado School of Mines, the state’s elite engineering school, concluded that energy production was the state’s largest industry, accounting for 6.1 percent of gross state product, giving oil and gas drilling a larger stake in the economy than tourism. State tax revenues on oil and gas production have soared from $32 million in 2003 to $250 million last year. But the state is expecting only $40 million in the next fiscal year.
To be sure, part of the drop in revenues can be attributed to falling natural gas prices and the slumping economy. But energy companies also say that the rollout of the new oil and gas rules told drillers they should move their rigs to states with friendlier regulatory environments.
“Obviously, with the economic downturn, the state government has
created an uncertain business environment where companies might be more
comfortable to Louisiana or Texas,” said Nate Strauch, [Colorado Oil and Gas Association]
communications coordinator.“Colorado’s
permitting already takes longer than the national average. Under the
new rules, after the permit has been approved, different entities can
come in and challenge the action. Surface owners can come in and
second-guess the decision. So can the Department of Public Health and
the Division of Wildlife. This gives them a second bite of the apple
after being involved in the process already if they don’t like the
results,” he told OGJ in an Apr. 24 phone interview.
Ritter’s made other moves stifling oil and gas production. For instance, he stalled federal officials who had worked seven years drafting rules that expanded drilling on the Roan Plateau — which sits atop the largest untapped pool of natural gas resources in the lower 48 states — so that they didn’t take effect until the final weeks of the Bush administration. Interior Secretary Ken Salazar, who was a Colorado U.S. senator before last year’s election, has long opposed new wells on the Roan, so Ritter’s game of Four Corners wound up placing those resources beyond reach.
The quickest way to make the “new energy economy” the primary generator of jobs in the energy industry is by strangling fossil fuel producers with higher taxes and draconian regulations. And that’s no way to help consumers or restore the health of the economy.
