Numbers indicate GOP off-base on ‘job-killing’ drilling regs

Republicans campaigning for the governor’s office in November keep hammering on the “job-killing” amended oil and gas drilling regulations championed by Democratic Gov. Bill Ritter in 2008 and 2009.

Democratic gubernatorial candidate and Denver Mayor John Hickenlooper has said some aspects of the rules should be revisited for possible tweaking, while GOP candidates Scott McInnis and Dan Maes promise they will gut the rules that give higher priority to environmental concerns, wildlife habitat and public safety.

“First thing we need to do is to start with a positive message about the traditional energy industry by going to those companies and saying we want you here,” Maes told the Colorado Independent in May. “While we do that, we also try to modify the new energy regulations so that we back off a couple of things so that we send a clear message that these energy companies are welcome here.”

Numbers released Thursday by Colorado Oil and Gas Conservation Commission director David Neslin indicate the industry still feels quite welcome in Colorado compared to other gas-producing states in the Rocky Mountain region.

“Colorado’s oil and gas industry is currently faring better than that in many other states, including our closest neighbors, while providing enhanced protection for the environment and wildlife,” Neslin wrote in a report to the COGCC board at a meeting in Denver Thursday. Neslin in the past has told the Colorado Independent that Colorado is ahead of other states that are now looking to increase regulation of the oil and gas industry.

Maes in May blamed the current downturn on the amended oil and gas regs, while many industry observers say the slowdown is more a product of the global recession and plummeting natural gas prices.

“Permits are up; rig counts are still down,” Maes said of recent signs the industry is rebounding. “Severance tax revenue is down, and that contributes to the financial condition the state is in. Proactively chasing an industry out of the state and losing the revenue that goes with it just doesn’t make sense.”

But Neslin on Thursday painted a different picture:

• Colorado is the regional leader and among the national leaders with 3.112 permits issued in first two quarters of 2010 (through June 21).
• Colorado is on pace to issue 6,500 permits, a 30 percent increase over 2009 and the second busiest year in state history despite the “twin impediments of low natural gas prices and decreased economic activity,” Neslin said.
• Colorado has issued nearly as many permits in 2010 as Pennsylvania (3,291), which is currently experiencing a shale gas boom. “We believe this demonstrates that operators [in Colorado] have adjusted to the amended regulations and are continuing to pursue their opportunities here,” Neslin added.
• Colorado also is the regional leader in actual wells started so far in 2010, with 819 through June 15 compared to 506 in Wyoming, 320 in Utah and jut 82 in New Mexico.
• Colorado is 30 percent ahead of 2009 as far as new well starts, and outpacing even North Dakota (519), which is enjoying a boom in the Bakken Shale.

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About the Author

David O. Williams

is an award-winning reporter who has covered energy, environmental and political issues for years. His work has appeared in the New York Times, Chicago Tribune and Denver Post. He's founder of Real Vail
and Real Aspen.

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