By - Jim Vess

Expensive Colorado ballot battle on oil drilling setbacks could lead to a compromise

Energize Weekly, November 14, 2018

In the wake of a hard-fought battle over an oil and gas ballot initiative, Colorado political and industry leaders are looking for a path to comprise.

Proposition 112, sponsored by the grassroots anti-drilling group, Colorado Rising, would have created a statute requiring oil and gas facilities to be set back 2,500 feet from homes, public buildings and spaces, and natural features such as streams.

The oil and gas industry saw the measure as an existential threat. A Colorado Oil and Gas Conservation Commission analysis estimated that the rule would make 85 percent of the state’s non-federal surface land unavailable for oil and gas development.

The industry, led by the state’s two biggest operators, Anadarko Petroleum and Noble Energy, poured $41 million into opposing the ballot measure, which was defeated 56 percent to 44 percent. Nevertheless, the initiative was supported by nearly 925,000 voters.

“It sends a huge message,” state Sen. Matt Jones, a Boulder County Democrat and a critic of the oil and gas industry.

In the wake of the vote, there has been talk in all quarters about finding some resolution as suburban homeowners don’t want large oil and gas facilities placed in their neighborhoods and local officials seek more control over oil and gas development.

Under Colorado law, the state has primacy in regulating oil and gas development, while local governments get all the complaints about noise, odors, traffic and pollution.

“What we have to address are these surface conflicts, real conflicts between neighborhoods and communities on how oil and gas activities are put near them,” Democratic governor-elect Jared Polis said in an interview with 9News Denver. “We want to find a way to empower local communities to have a seat at that table, that we have larger setbacks unless everyone agrees and the landowner wants them closer.”

Polis said the industry “can do this every two years if they want, and they can spend $42 million and risk losing, or they work with Republicans and Democrats to solve the problem underlying these conflicts.”

In 2012, Polis, a wealthy online entrepreneur and then a congressman representing the Boulder area, bankrolled a similar setback ballot measure, which was eventually withdrawn.

The industry may have more incentive to find a compromise as the Democrats won not only the governorship, but took control of both houses of the legislature.

At least 10 Democrat-sponsored bills addressing various oil and gas issues in the last five years died in a Republican-controlled Senate. All were opposed by the industry.

“The oil and gas industry strategy over the last several years is to quash any reform,” said State Rep. Michael Foote, a Boulder County Democrat and sponsor of seven oil and gas bills in the last two years.

“This vote isn’t the end, it is the beginning of the conversation” said Tracee Bentley, executive director of the Colorado Petroleum Council, a trade group. “If we can take out the extremes and get folks around a table, we can find a solution.”

Another ballot battle “is something to be avoided,” Bentley said.

Polis said the oil industry people he has spoken to say “they don’t like this enormous uncertainty in our state.”

In 2012, the Polis-backed initiative was pulled as part of a compromise under which Gov. John Hickenlooper created a blue-ribbon panel to address the oil and gas development issues. The panel, however, could not reach the required two-thirds majority on any of the local control or land-use issues.

On election night, Hickenlooper, who is term limited, said, “I hope we can call the stakeholders together so we can figure out a compromise once and for all, so we’re not going back and forth with these initiatives and spending tens of millions of dollars twisting ourselves in knots.”

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