Oil and gas taxes plummet in GarCo; blame game at 11

Time for the other shoe to drop in gas-rich Garfield County. First came the recession-fueled natural gas drilling bust starting in late ’08, and now comes the precipitous drop in tax revenues officials have been predicting in the Gas Patch for more than two years.

According to the Glenwood Springs Post Independent, assessor John Gorman said tax revenues for 2011 could be off by 30 percent or more compared to 2010, mostly due to a dramatic decline in assessed property value for the oil and gas industry.

So instead of the approximately $70 million in taxes collected by the county in 2010, that number will be more like $50 million in 2011.

Oil and gas valuation “reached its peak last year [2009] of $3.06 billion,” Gorman told the paper, providing extra revenues for schools, fire districts and other tax-funded programs and infrastructure. But for 2010 that figure will be closer to $1.34 billion.

Some politicians will try to pin the blame on Democratic policies, including environmentally tougher oil and gas drilling regulations adopted in the spring of 2009, but most observers say the plunge in natural gas prices domestically and internationally, brought on by the Great Recession of 2009, is the leading culprit.

Republican gubernatorial candidate Dan Maes told the Colorado Independent in late May that the “New Energy Economy” policies of Democratic Gov. Bill Ritter were to blame.

“Severance tax revenue is down and that contributes to the financial condition the state is in,” Maes said at the time. “Proactively chasing an industry out of the state and losing the revenue that goes with it just doesn’t make sense. I favor new energy but not at the expense of the old energy industry.”

When the website pressed him for specifics on the topic, Maes cited new regulations requiring input from the Colorado Division of Wildlife during the permitting process.

“I’m simply saying I’ve been told by the industry that the [Colorado] Division of Wildlife [CDOW] now has its nose in it and we don’t need the Division of Wildlife’s nose in it,” Maes said. “I know there are 175 pages of new regs that have chased the industry out of the state. So there is obviously something in there that doesn’t work.”

Ritter in August announced an accord with nine of the state’s largest oil and gas producers to protect key wildlife habitat on more than 355,000 acres of the state’s Western Slope. The companies moved on the deal in exchange for expediting the drilling permit process and thereby locking in wildlife protections instead of engaging in a well-by-well review by the CDOW.

“There have been people who have politicized the oil and gas regulations, but all the time they were politicizing it we were working hard with industry to get to this,” Ritter told reporters after the announcement on the west steps of the Capitol in Denver.

Ritter is not running for reelection, but his Democratic replacement in the race, Denver Mayor John Hickenlooper, told the Colorado Independent through a spokesman in May that the mayor favors leaving the regulations in place and tweaking some aspects to streamline the process for the industry.

“He doesn’t want to open up the rules process again, obviously, and he agrees with where it ended up; he just has a critique of the tenor,” Hickenlooper spokesman George Merritt said at the time, referring to the contentious rulemaking process that began in 2007.

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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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