State lawmakers’ attempt to re-focus Colorado’s regulation of the $10 billion fossil-fuel industry gained momentum Monday after scores of supporters and opponents packed a first committee hearing in the House on the proposed oil and gas legislation.
The House Energy and Environment committee approved Senate Bill 181 by a 7-4 vote following a marathon hearing that lasted late into the night. The oil and gas bill next goes to the House Finance committee.
Democratic lawmakers also are looking at a more aggressive approach to climate change with a bill to be introduced this week that would adopt the Paris climate agreement’s goals, possibly as mandates, for reducing greenhouse gas emissions — linked to global warming — as part of Colorado law.
“It is a shift. We’re not going to be promoting” oil and gas extraction, House Speaker KC Becker, D-Boulder, said of the oil and gas legislation. “But they (state regulators) are still going to be providing permits” for new drilling.
These efforts to reform how Colorado handles fossil fuels “are related” to efforts to step in, along with other states, where President Donald Trump has stepped out in fighting global warming, Becker said, calling climate change a critical issue.
Colorado still relies on coal, a major source of heat-trapping carbon dioxide, for more than half of the electricity that the state’s residents use, according to U.S. Energy Information Administration data.
“It affects Colorado particularly because of our geography,” Becker said. “We have a responsibility in this state to step forward … We’re going to see more catastrophic weather events. All we can do is our part to contain it.”
Industry leaders who are engaged with the oil and gas legislation are accepting requirements that companies control methane, a potent heat-trapping gas linked to global warming. Becker praised this, saying industry leaders “are recognizing their own role and stepping forward on addressing methane emissions.”
Behind the scenes, the 33-page draft bill has been tweaked to insert the words “reasonable” and “necessary” as checks on local power, a compromise for the industry. These legislative “guardrails” are aimed at making sure local governments and state regulators do not overreach in regulating industry operations. Even without that language, however, government agencies cannot legally take arbitrary or capricious action against companies.
Monday’s House Energy and Environment committee hearing built on SB 181 discussions in the Senate, where the bill passed Thursday, nearly two weeks after it was launched. The amending is expected to continue in two more House committees this month before the House floor votes. The bill still could move back to the Senate before reaching Gov. Jared Polis, who has indicated he supports the initial draft legislation.
It would change the Colorado Oil and Gas Conservation Commission’s long-standing mission of “fostering” oil and gas development “consistent with” health and the environment, ditching that language and replacing it with a mission of regulating the industry to protect public health and the environment. Colorado’s emerging new approach also would give local governments a greater say in where oil and gas facilities are located.
This re-focusing is happening amid expansion of oil and gas drilling along Colorado’s Front Range, with plans to drill wells closer and closer to cities including hundreds inside municipal boundaries — some near homes and schools. Residents, health researchers, wildlife advocates and conservationists for years have been raising concerns at COGCC hearings and elsewhere.
A voter initiative that would have required bigger buffers between future industrial facilities and homes, schools and streams was defeated 55 percent to 45 percent in November’s election. Oil and gas industry groups had spent at least $30 million on a campaign blitz to defeat the initiative.
Now oil and gas industry leaders are calling the new legislation, launched at the start of the month, “sweeping” and “an overhaul.” The Colorado Petroleum Council, a branch of the American Petroleum Institute, last week launched campaign-style television ads opposing the legislation-in-progress, accusing state lawmakers of operating “in the middle of the night” — a March 5 hearing in the Senate ran from the afternoon to past midnight — and claiming that the legislation is “to shut down energy production in Colorado.”
Industry advocacy groups have said passage of SB 181 would cause a $30 billion hit to the state economy.
On Monday morning, oil and gas worker activists demonstrated with signs outside the Capitol, some casting the bill as a ban on oil and gas production, trying to elicit honks from commuters.
The advancing legislation “is disconcerting for our field guys,” said Liz Wright, a spokeswoman for Liberty Oilfield Services, one of the demonstrators. “They’re working to put food on the table.”
Liberty Oil engineer Robert Henderson said crews were working through ice and sleet last week as lawmakers worked on the legislation. “There are some Colorado-only operators who are going to be in trouble if this passes,” Henderson said. “The rapidity is crazy.”
Inside the Capitol, House Speaker Becker addressed industry criticisms.
“The rhetoric is completely overstated,” she said. “I don’t think we have any proof, now, that this is going to hurt the economy … People file for permits dozens of years into the future … ”
“We care about the impacts,” she said, challenging assertions that local land-use powers could amount to a ban and drive away energy investors. “Having permits be subject to a higher health and safety standards is not going to be devastating for the industry.”
