Negotiations Halt On Dropping Oil And Gas Initiatives In 2020

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Negotiations Halt On Dropping Oil And Gas
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A bid to reach a compromise on competing pro- and anti-oil and gas initiatives set to run on this year’s ballot fell through when anti-fossil fuel activists withdrew Tuesday night, according to proponents of a push to establish an independent oil and gas board in Colorado.

In a joint statement Colorado Association of Mechanical and Plumbing Contractors CEO Dave Davia and Grand Junction Chamber of Commerce CEO Diane Schwenke, proponents of Initiatives 311, 312 and 313, were puzzled by the last minute refusal to stand down conflicting measures designed to adjust the oil and gas landscape yet again.

“Environmental groups conveyed they were willing to drop their economically destructive initiatives if we would stand ours down too. We reached an agreement in good faith to do exactly that, but the activist groups backed out tonight for reasons clear to no one,” Davia and Schwenke said.

In January, Colorado Rising submitted six ballot measure proposals, including another statewide setback measure similar to the one the group failed to pass in 2018. According to the group, new measures are needed in light of legislative and regulatory failures in last year, when the landmark SB-181 oil and gas bill was passed.

All of the proposed initiatives would need to have approximately 125,000 valid signatures to make the November ballot. Colorado Rising has five remaining initiatives, while Davia and Schwenke still have three in play.

In light of the current economic downturn caused by COVID-19, avoiding a costly ballot measure fight in 2020 appeared to be a possibility as both sides negotiated the compromise, according to the release.

“We were willing to sideline our measure because now is not an ideal time for another expensive ballot fight. But this whole episode shows how broken, chaotic and absurdly political the system for regulating Colorado’s energy sector has become,” they added.

In an interview with Western Wire, Davia explained he and Schwenke were approached about a proposed deal from supporters of the setback ballot measures. An agreement was reached for both sides to stand down, Davia said. But the deal fell through a few days later, when the Colorado Rising board voted to keep its ballot measures in place after all.

“We wanted to take politics out of the policy,” Davia said. In a post-COVID world, he said, the groups took a look at if it made sense “to avoid a ballot box war this year.” The initial response appeared positive, as each side would agree to withdraw their respective initiatives. “The tenor and tone was encouraging,” he added.

A deal in principle was struck late last week, according to Davia, as the two sides worked out some technical issues. But late Tuesday, Colorado Rising withdrew its backing, which Davia called disappointing but not unexpected.

Colorado Rising’s executive director Joe Salazar told the Grand Junction Daily Sentinel it had no comment on the negotiations, except to say that “there’s no deal.” Salazar added, “We receive overtures all the time about trying to pull back on our initiatives.”

Colorado Rising did not immediately respond to a Western Wire request for comment.

Reaction from industry to the failed negotiations was swift.

American Petroleum Institute Colorado Executive Director Lynn Granger said she was “disappointed” that a compromise wasn’t reached.

“The fact remains that everyone involved in the debate on Colorado’s energy future wants the very best for the people of our state, and we were hopeful that a costly election season battle could be avoided, as these disagreements pale in contrast to the grave concerns currently facing Coloradans. We remain hopeful that an agreement can still be reached,” Granger said.

Colorado Oil and Gas Association president Dan Haley also expressed concern that negotiations were unsuccessful as the state battles a health pandemic and economic crisis.

“It’s unfortunate that Colorado Rising walked away from negotiations. This could have been a victory for all of Colorado at a difficult and divisive time,” said Haley. “It’s even more important in tough times like this, when families are hurting, to focus on moving Colorado forward instead of tearing each other down. Colorado’s oil and natural gas industry is vital to our state, and we will always defend it and working families across our state. Our members remain committed to Colorado and to responsibly producing our resources cleaner, better and safer than anywhere on the globe.”

The current political landscape, dominated by COVID-19 concerns, has driven policy discussions outside of state budgeting and health care to the back burner.

Even the state’s current oil and gas regulatory body, the Colorado Oil and Gas Conservation Commission, has punted regulatory changes to the industry to the late summer as the state grapples with the downturn in oil and gas production due to shrinking demand as the economy soured in the wake of a worldwide pandemic.

Joe Salazar, Colorado Rising’s executive director and a former state representative has targeted fellow Democrats, including Gov. Jared Polis, over continued oil and gas production in Colorado.

“We know that Polis wants oil and gas operators to drill despite the fact that it’s f****** stupid to do so. We know that Polis is okay with oil and gas drilling near a 55+ community despite the respiratory concerns. We know that Polis couldn’t give an overripe s*** about drilling in communities of color,” Salazar wrote on April 24.

This apparent failure to reach a political détente ensures there will not be a repeat of 2014, when then-Gov. John Hickenlooper and Polis, then a U.S. Congressman, reached an eleventh-hour deal to take anti-fracking and pro-industry measures off the ballot in exchange for a blue-ribbon commission on oil and gas issues that would refer recommendations to the Colorado legislature.

Polis, elected governor in 2018, opposed a setback measure that same year that would have pushed new oil and gas development back 2,500-feet. While Polis won at the polls, Prop 112 was defeated by 10-points, setting up a legislative battle in 2019 that Democrats hoped would settle issues and end “the oil and gas wars.”

Polis’s predecessor, Hickenlooper, launched a failed bid for his party’s nomination for president this cycle and is competing for the primary nod to challenge U.S. Sen. Cory Gardner (R) this fall.

Davia and Schwenke said they still hoped to avert a repeat of 2018’s Prop 112 fight that saw more than $41 million spent by industry alone in opposition to the setback measure. But if the outreach overtures fail, they said, they are prepared to bring certainty and independent transparency to the industry so that the biannual ballot clashes are no longer needed.

“If the activists get their act together, they know where to find us,” they said. “In the meantime, we are more resolved than ever to pass our ballot measures creating an independent oil and gas board, modeled after the redistricting commissions created by Amendments Y and Z. We need to get this kind of fringe politics out of energy regulation for good.”

Davia told Western Wire that despite feeling that they had “really reached a deal,” the polling he’s seen for establishing an independent gas commission has been positive.

Their initiative to establish an independent oil and gas board would provide a steady basis for permitting and other regulations instead of “overly political processes [that] leads to irrational and arbitrary swings in policy that neither protect public health nor promote regulatory certainty for property owners, communities, or producers.”

An economic analysis by free-enterprise think tank Common Sense Policy Roundtable released last month found an increased setback would only exacerbate the current economic downturn.

“[T]he current body of research indicates Colorado would experience major losses across the private and public sectors under setback proposals of between 2,000 feet and 2,500 feet. These impacts would start with job losses in the tens of thousands, economic losses in the billions of dollars, and lost tax revenues in the hundreds of millions of dollars, with significant escalation of these impacts over time,” wrote authors Simon Lomax, CSPR’s energy fellow and Chris Brown, CSPR director of research.

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