Part I: The Politics of the Oil and Gas Severance Tax

Photo Sharing and Video Hosting at PhotobucketIt was serious business at Tuesday’s Colorado Legislative Council meeting of the “Interim Committee to Study the Allocation of Severance Tax and Federal Mineral Lease Revenue” held in Rifle. The discussion concerned the energy industry, the number one business conglomerate in the world. And it involved money in the form of severance tax payments on mineral and gas extractions to Colorado.

Please read on….Change is happening rapidly in “The Industry,” as it is called in Northwest Colorado. The state political landscape in Colorado is now under Democratic leadership, but there is still a strong Republican political block in the West. Growth from the energy industry will put rural towns such as Rifle, Meeker and Parachute on fast-forward with populations doubling every ten years. Some citizens have become professional drilling watchdogs; some have embraced The Industry; some are just trying to keep their schools, non-profit agencies, and governments in pace with the impacts.Photo Sharing and Video Hosting at Photobucket

In a room built by severance tax funds through the Department of Local Affairs, a combination of opposing party politicians, industry leaders, local government officials, health experts, environmentalists and area citizenry met for a full day’s discussion. They explored the costs and dividends of the oil and gas boom on Western Colorado. Ever present was the subject of money to pay for those impacts on local services–millions and millions from severance tax on oil and gas revenues in the state.

The more commonly called “Severance Tax” committee was divided into two groups: the official state legislative committee and the citizen-lead “working committee.”

The legislative committee includes: Senators Gail Schwartz, chair, Jim Isgar, Josh Penry, Chris Romer and Jack Taylor; and Representatives Kathleen Curry, vice-chair, Bernie Buescher, Randy Fischer, Jerry Sonnenberg and Al White.

The working committee includes: Department of Local Affairs director, Susan Kirkpatrick and Department of Natural Resources head, Harris Sherman; Craig City Councilman Terry Carwile, sportswoman Rebecca Frank; Phil James of the Colorado Wildlife Commission; Shane Henry from Williams energy company; several county commissioners and others.

The Severance Tax committee will complete their report within a year. However, their scope to unravel how severance taxes are collected and distributed may have expanded on Tuesday when the issue of Colorado’s severance tax rates, some of the lowest in the U.S., was repeated identified as part of the problem as well as the Ad Valorem tax credits.

Another reason why this Severance Tax committee is over-charged politically-the change of severance tax rates could cost The Industry millions of dollars in Colorado. As environmentalist Randy Udall put it: Currently, Colorado taxpayers are possibly subsidizing the largest industry in the world.

Have we got your attention yet? Look for more in Part II.

Photo: Top–Sen. Chris Romer, center contemplates the comments made by committee member Shane Henry from Williams. Bottom-Sen. Gail Schwartz, chair; Rep. Kathleen Curry, vice-chair; Sen. Jack Taylor and Sen. Josh Penry

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