Although the energy industry ranks among the leading economic drivers in Colorado, the state drives that industry away with undue regulations, according to a Grand Valley legislator.
Speaking at a legislative wrapup breakfast sponsored by the Grand Junction Area Chamber of Commerce, State Rep. Ray Scott decried failed efforts to help remedy that situation by altering the makeup of the Colorado Oil and Gas Conservation Commission (COGCC).
As recently as four years ago, the COGCC consisted mostly of members of the oil and gas industry. Now, members of the industry are in the minority and critics say the scales have tipped too far in favor of environmental regulations that hinder the ability of energy companies to earn as much profit in Colorado as they can in other states.
“It’s overloaded on the environmental side,” said Scott, R-Grand Junction. “This is the most important industry in Colorado.”
Colorado’s rank as an energy producing state has dropped dramatically since the change in the COGCC makeup, Scott said. In 2007, the COGCC spent $3 million to regulate energy companies. Last year, it was $9 million, he added.
Regulation constitutes a major reason energy companies have moved so many drilling rigs out of Colorado, he said. “They’re going to Louisiana for a reason, and it’s not the price of gas.”
Some industry analysts say low consumer prices for natural gas have caused decreased production in the Piceance Basin in Western Colorado because of the higher costs associated with extracting gas in the region.
State lawmakers are working on a revised severance tax program that could encourage companies to ramp up operations in Colorado, Scott said.
In addition to the status quo with the COGCC, some lawmakers were frustrated by a failure to address immigration law, potential suspension of business personal property taxes or the redrawing of congressional district boundaries.
Lawmakers were hopeful congressional district lines would be redrawn in Colorado for the first time in 40 years, said Rep. Don Coram, R-Montrose. But he lost hope when he saw one plan that included Craig and Boulder in the same district. “It was such a slap in the face to all of us in rural Colorado,” he said.
Republican legislators also hoped regulation on business might be curtailed during the session. They might continue work on proposals during the summer in preparation for the next legislative session in January, Coram said.
Lawmakers did restore sales tax exemptions for some products, allowed tax breaks for agricultural land and created a health care exchange mandated by the federal Patient Protection and Affordable Care Act.
“It’s an accomplishment to say we limited the amount of destruction,” said State Sen. Steve King, R-Grand Junction.
King said he felt good about a measure that returns some vendor fees to businesses that collect sales taxes. King also acknowledged that every dollar the state fails to collect is another dollar cut from budgets for public schools, presenting lawmakers with difficult decisions to balance the budget.
State Rep. Laura Bradford, R-Collbran, touted passage of a measure with $60 million more public school funding than the plan proposed by Colorado Gov. John Hickenlooper. Bradford said continuation of tax-exempt status for agricultural land was an important accomplishment and praised passage of a legislation that earmarks funding for the Marillac Clinic in Grand Junction — a clinic for low-income people that charges according to a sliding scale based on income.
Bradford said Republicans had a little more clout during the recent legislative session with a majority in the House. “The political capital were a few more chips, but you had to be careful about how to use those chips.”
Bradford said she’s skeptical of the health exchange, ostensibly designed to offer consumers more choices for health insurance. The result will be more government bureaucracy, she said. Plus, there’s no evidence the health exchange will actually increase competition. “But, we will work to make sure our local systems aren’t disrupted,” she added.
Mesa County has received praise from health care analysts who cite the county’s cooperative agreement between a physicians association and Rocky Mountain Health Plans (RMHP). The Independent Practice Association contracts with RMHP, giving the insurance company a built-in clientele. In return, RMHP reimburses doctors who treat Medicare patients at higher rates than the doctors would otherwise be reimbursed. The model is scheduled for expansion to six other Western Colorado counties over the next two years.