Energy exec tells Federal Reserve Colorado has become ‘no investment’ state
Energy exec tells Federal Reserve Colorado has become ‘no investment’ state
DENVER–An
unnamed energy executive told officials with the Dallas Federal Reserve
office that new oil and gas regulations are making it difficult to find
and maintain drilling opportunities, saying Colorado had become a “no
investment” state and accused Democrats of being “hostile” to the
industry.
“Continued weak oil prices and high costs are squeezing my margins,” the commenter told the Dallas Fed in response to its energy survey for the fourth quarter of 2019.
“It is very difficult to find any projects that make sense
economically. I am getting increasingly selective on what deals in which
I will invest. Increasing regulatory pressure in Colorado has resulted
in a complete loss in value of wells in that state, and in my mind, it
has become a ‘no investment’ state. The very hostile government there
totally ignored the expressed wishes of the citizens of Colorado, which
was expressed at the ballot box.”
In the last sentence, the executive was referring to voters rejecting
Proposition 112, which would have placed extraordinary setback
restrictions on new drilling, and which opponents claimed was a de facto
ban on new wells. The proposal was defeated in the 2018 election by a
57-42 margin.
In the same election, however, Democrats won a majority in the state
senate, giving them majority power in both legislative chambers, and
Democrats maintained control of the governor’s office.
Owning all three levers of power, state Democrats then pushed through
their own new set of sweeping regulations with Senate Bill 19-181.
Republicans said the legislation was rammed through and did not attempt
to compromise in any meaningful fashion with energy producers.
When asked about the ‘no investment’ state comment, Colorado Oil and Gas Association (COGA) president Dan Haley told Complete Colorado,
“Global commodity prices have been low and regulatory uncertainty has
been high in Colorado, which is not a good combination for any business.
While we won’t know the full impacts of Senate Bill 181 until it is
fully implemented over the next year, we do know it was not meant to
stimulate economic growth.”
Haley went on to note that permitting for new well locations has been
more than cut in half since the bill was signed into law, several local
governments have declared moratoria and are re-writing their laws, and
industry is undergoing massive rulemakings on everything from increased
air monitoring to new flowline protections. “That said, this industry
is too important to Colorado and to our country to wave a white flag,”
said Haley.
Not long after the U.S. entered a recession in late 2008 and early
2009, oil and gas took off in the state, with the increases largely
attributable to new technological advances like hydraulic fracturing and
horizontal drilling,
Colorado’s crude oil production has quadrupled since 2010, and the
state is in the top five in the nation in gas production, according to
information published one year ago by the U.S. Energy Information Administration.
Much of the recent political shift against energy producers has been
attributed to the transition of former Governor John Hickenlooper
leaving office due to term limits and the subsequent election of
Governor Jared Polis, a long-time outspoken critic of the energy
industry.
“Without the pro-fracking Mr. Hickenlooper to run interference,
Colorado Democrats are poised to deliver a body blow to the state’s $31
billion oil and gas industry with Senate Bill 181, legislation aimed at
prioritizing environmental and safety concerns that critics have
described as a de facto prohibition on drilling,” the Associated Press said in March of last year.
“COGA and our members are committed to Colorado, and we are fully
engaged in both state and local regulatory discussions. We need to
continue talking to Coloradans about why this industry is so important
and working with elected state leaders on more workable solutions that
allow operators to continue producing oil and natural gas cleaner,
better and safer than anywhere in the world,” continued Haley. “We know
we’re all going to need this resource for decades to come. If you care
about the environment, you want it produced here where we meet a very
high bar.”
Energy exec tells Federal Reserve Colorado has become ‘no investment’ state
unnamed energy executive told officials with the Dallas Federal Reserve
office that new oil and gas regulations are making it difficult to find
and maintain drilling opportunities, saying Colorado had become a “no
investment” state and accused Democrats of being “hostile” to the
industry.
“Continued weak oil prices and high costs are squeezing my margins,” the commenter told the Dallas Fed in response to its energy survey for the fourth quarter of 2019.
“It is very difficult to find any projects that make sense
economically. I am getting increasingly selective on what deals in which
I will invest. Increasing regulatory pressure in Colorado has resulted
in a complete loss in value of wells in that state, and in my mind, it
has become a ‘no investment’ state. The very hostile government there
totally ignored the expressed wishes of the citizens of Colorado, which
was expressed at the ballot box.”
In the last sentence, the executive was referring to voters rejecting
Proposition 112, which would have placed extraordinary setback
restrictions on new drilling, and which opponents claimed was a de facto
ban on new wells. The proposal was defeated in the 2018 election by a
57-42 margin.
In the same election, however, Democrats won a majority in the state
senate, giving them majority power in both legislative chambers, and
Democrats maintained control of the governor’s office.
Owning all three levers of power, state Democrats then pushed through
their own new set of sweeping regulations with Senate Bill 19-181.
Republicans said the legislation was rammed through and did not attempt
to compromise in any meaningful fashion with energy producers.
When asked about the ‘no investment’ state comment, Colorado Oil and Gas Association (COGA) president Dan Haley told Complete Colorado,
“Global commodity prices have been low and regulatory uncertainty has
been high in Colorado, which is not a good combination for any business.
While we won’t know the full impacts of Senate Bill 181 until it is
fully implemented over the next year, we do know it was not meant to
stimulate economic growth.”
Haley went on to note that permitting for new well locations has been
more than cut in half since the bill was signed into law, several local
governments have declared moratoria and are re-writing their laws, and
industry is undergoing massive rulemakings on everything from increased
air monitoring to new flowline protections. “That said, this industry
is too important to Colorado and to our country to wave a white flag,”
said Haley.
Not long after the U.S. entered a recession in late 2008 and early
2009, oil and gas took off in the state, with the increases largely
attributable to new technological advances like hydraulic fracturing and
horizontal drilling,
Colorado’s crude oil production has quadrupled since 2010, and the
state is in the top five in the nation in gas production, according to
information published one year ago by the U.S. Energy Information Administration.
Much of the recent political shift against energy producers has been
attributed to the transition of former Governor John Hickenlooper
leaving office due to term limits and the subsequent election of
Governor Jared Polis, a long-time outspoken critic of the energy
industry.
“Without the pro-fracking Mr. Hickenlooper to run interference,
Colorado Democrats are poised to deliver a body blow to the state’s $31
billion oil and gas industry with Senate Bill 181, legislation aimed at
prioritizing environmental and safety concerns that critics have
described as a de facto prohibition on drilling,” the Associated Press said in March of last year.
“COGA and our members are committed to Colorado, and we are fully
engaged in both state and local regulatory discussions. We need to
continue talking to Coloradans about why this industry is so important
and working with elected state leaders on more workable solutions that
allow operators to continue producing oil and natural gas cleaner,
better and safer than anywhere in the world,” continued Haley. “We know
we’re all going to need this resource for decades to come. If you care
about the environment, you want it produced here where we meet a very
high bar.”
Comments
Post a Comment