Phil Castle, The Business Times
A ballot measure increasing setbacks on oil and natural gas development in Colorado has been blasted as a virtual ban on energy exploration that would hurt an important industry as well as hailed as needed protection for health and safety.
Both perspectives on Proposition 112 were debated at a meeting hosted by the Grand Junction Area Chamber of Commerce. The event featured Dan Haley, president and chief executive officer of the Colorado Oil and Gas Association, and Heidi Henkel, a Broomfield activist with Colorado Rising, the group that put the measure on the November election ballot.
Proposition 112 would require that new oil and natural gas development be located at least 2,500 feet from occupied structures, water sources and areas designated as vulnerable. The measure also would allow the state or local governments to require setbacks greater than 2,500 feet. Current law requires wells to be set back 500 feet from homes and 1,000 feet from schools.
While Proposition 112 has been deemed by some as a choice between jobs and health, Haley said that’s not the case. “We can have both of those things in Colorado.”
The oil and natural gas industry has been drilling wells in the state for more than 150 years and now operates under some of the most stringent regulations in the nation, Haley said. “We’re doing it better, safer and cleaner than anywhere else in the country.”
Imposing increased setbacks would leave most of Colorado off-limits to new energy development, he said. “This is a ban on the oil and gas industry.”
By one estimate, 85 percent of non-federal land in the state would be excluded from development, Haley said. That proportion increases to 99 percent in Garfield and Rio Blanco counties in Western Colorado.
The setbacks would in turn affect an industry that contributes $32 billion annually to the Colorado economy, employs more than 100,000 people and accounts for a total of $1 billion in state and local taxes a year.
Haley said one study of the economic and fiscal effects of passage of Proposition 112 found 147,800 jobs would be lost in Colorado through 2030 — 43,000 in the first year. Gross domestic product in the state would decline $218 billion from 2019 to 2030, while state and local tax revenue would drop $7 billion to $9 billion during that same span. It would be difficult to backfill those reductions, he said. “Money and jobs and taxes are not invented out of thin air.”
Henkel said the setbacks proposed in Proposition 112 are based on the health risks associated with emissions from oil and natural gas development and safety risks posed by potential explosions.
Studies and anecdotal reports indicate increased incidents of asthma as well as increased risk of cancer associated with oil and natural gas development, she said. Children near Erie have experienced increased nosebleeds. Doctors have told some people living near oil and natural gas wells to move. “All you have to do is listen to the people.”
Henkel disputed the economic effects of Proposition 112. She said 54,000 wells that have been drilled in Colorado remain active. She also cited a report prepared by an assistant professor at the Colorado School of Mines who estimated 42 percent of non-federal lands would remain available to development assuming operators could drill up to a mile from any location. “I don’t like that word ‘ban.’ It’s not.”
Haley said some of the studies attributing health problems to oil and natural gas development aren’t applicable in Colorado with its more stringent regulations. Some of the studies have debunked. Rather, there’s no credible science or experience upon which to base the extended setbacks, he said.
The residents of Colorado have long lived near oil and natural gas operations and are comfortable with existing setbacks he said. Proposition 112 takes a different approach, he said. “This isn’t how we do business in Colorado.”
Henkel said efforts have been made to work with the oil and natural gas industry as well as enact legislation to address health and safety concerns, but nothing has happened. Proposition 112 offers an opportunity to do something, she said. “We’re going to protect Coloradans.”