Editor’s note: This bill has bounced back and forth between the House and Senate as final amendments are made. The most recent action was a 36-28 vote, with amendments, in the House. The bill heads back to the Senate as a result of those amendments.
Oil and gas industry ads on social media and television warn that proposed new state regulations could effectively ban drilling in Colorado and cripple the economy.
But House Speaker KC Becker pushed back on those claims as a 12-hour committee hearing on the draft legislation came to an end early Tuesday morning. She argued SB 181, which she is sponsoring, won’t ban drilling or cause massive unemployment, as some industry lobbyists have said.
“What in the bill is going to make those jobs go away? Where in the bill is written ‘moratorium?’ Where in the bill is written ‘ban?’” Becker asked.
The omnibus bill passed the House Energy and Environment Committee 4-7 along party lines around 2 a.m., without any amendments.
Democrats, who hold a majority in both chambers, say SB 181 aims to make drilling safer for the public and cleaner for the environment. But it could wreck Colorado’s economy by killing jobs, opponents say, and drastically reduce state and local tax revenues that pay for K-12 schools and water conservation projects.
“Be aware, this bill sets us up to if not kill that golden goose, to certainly choke it,” said Sen. Paul Lundeen, a Republican from Monument, during a debate on the Senate floor last week.
A main provision of the bill gives local governments more say in where drilling can occur, which the oil and gas industry argues will severely restrict its activity in many places in the state. The bill also lifts a longstanding legislative mandate that the state’s oil and gas regulatory body, the Colorado Oil and Gas Conservation Commission, must promote drilling, which many argue should not be the job of the commission.
As the bill makes its way to the desk of Gov. Jared Polis, who supports the basic concepts of the bill, Becker and other backers are fending off an opposition ad campaign that has dubbed the proposed legislation a drilling “moratorium.” The American Petroleum Institute alone has spent hundreds of thousands of dollars on television and radio ads opposing the bill, according to filings with the Federal Communications Commission.
A television ad by API states SB 181 will “shut down energy production in Colorado.” It will lead to a drilling moratorium, according to a petition paid for by ExxonMobil. Americans for Prosperity, backed by billionaire conservatives Charles and David Koch, is also circulating a petition claiming the bill “contradicts the will of the voters,” referring to Proposition 112, which voters defeated in November.
In that election, opponents outspent organizers 40 to one on an advertising campaign fighting the measure. The proposition would have increased from 500 feet to 2,500 feet the minimum distance drilling rigs have to be set back from homes, schools and streams.
Values First Colorado, a political group working to recall lawmakers who support the new legislation, argues the proposed regulations are even more stringent than Proposition 112.
But the bill does not mention setbacks or moratoriums, supporters point out. And it’s unclear whether the bill would hurt the industry; the new regulations would be created through a Colorado Oil and Gas Conservation Commission rule-making process that could take more than a year. Local regulations will vary, and likely be more lax in places where most drilling occurs in the state, including Weld and Garfield counties, proponents say.
Despite the unknowns, on March 7, Moody’s, a bond credit rating company, told investors the new regulations could impede production and weaken the credit quality of companies operating in the Denver-Julesburg basin.
On Monday, oil and gas field workers milled about the Capitol in coveralls and work boots for the second time this session. They and others in the industry feel the bill is being fast-tracked and that they were not consulted during the drafting process. In early March, Robert Harber, area vice president for Halliburton Energy Services, chartered a bus to get workers to the state Capitol to rally against the bill. He said he had concerns about how fast it was moving through the state legislature.
“The voices of oil and gas workers in Colorado needed to be heard,” he told The Colorado Independent. He added, “We’re all oil and gas proud. We’re all Coloradans. We do our job to take care of the state. We do our job to take care of our neighbors.”
Last week, SB 181 cleared the Senate on a party-line vote after hours of debate and an effort by opponents to stall the bill by requiring a 2,000-page bill be read in full on the Senate floor.
Democrats say the bill is about passing long-overdue regulations to protect public health and the environment and to give local governments the same regulatory authority they have over other industries and development.
Debate over the bill comes as residents grapple with the impacts of oil and gas drilling across the Front Range. Ozone levels exceed federal standards in part due to oil and gas emissions. In 2017, a pipeline explosion in Firestone killed two men. A survivor of the blast, Erin Martinez, who lost her husband and her brother, was the first person to testify Monday. Several Colorado oil and gas workers die every year, according to federal data.
The bill strips a 1951 legislative mandate that requires the COGCC to promote drilling and instead requires the commission to focus primarily on regulating. It also changes the makeup of the nine-member commission to include just one oil and gas representative rather than three.
The bill that passed the Senate includes an amendment placing limits on state and local regulations, stating they must be “necessary and reasonable.” Lawmakers are considering an amendment to define those terms due to concerns they could lead to lawsuits.
That amendment and others culminated in a handshake between Senate Majority Leader Steve Fenberg, a Democrat from Boulder who is sponsoring the bill, and Senate Minority Leader Chris Holbert, a Republican from Parker, after hours of debate. Even so, all Republicans voted against the bill.
Supporters point to this “necessary and reasonable” language to rebut claims the bill will lead to greater mandatory setbacks between rigs and homes.
Oil and gas companies also are suspicious of a March 7 directive from newly appointed COGCC Director Jeff Robbins. In it, Robbins lists 15 situations in which COGCC will not issue a drilling permit without his review and signature.
The bill will next be heard in finance and appropriations committees before it heads to the House for a floor debate.