The upcoming legislative session in Colorado and possible implications for the oil and gas industry’s ability to operate in the state dominated a PESA policy forum at the Denver Petroleum Club on November 21.
The panel included State Sen. John Cooke (R-13); Dr. Michael Orlando, Managing Director Econ One Research/Adjunct Professor, University of Colorado – Denver; and Andy Merritt, State Director for Sen. Cory Gardner. The panel, moderated by PESA’s Tim Tarpley, Vice President Government Affairs, discussed political threats facing oil and gas production in Colorado and the role the industry plays in the state’s economic stability.
Cooke said he believes legislation regarding air quality regulations at the well site will be introduced in 2020, as well as increased setback requirements for drilling.
The panel also discussed the increased control SB 181 gives to local communities. Cooke touched on the need for equality in local control, emphasizing that if some counties are given the authority to block or significantly curtail drilling, other counties should be able to issue permits without interference.
“You can’t let Boulder County do local control under the guise of shutting down the industry and then say Weld County, you’re not allowed to use your local control to foster more production,” Cooke said.
While discussing the 2020 state and local elections, Merritt discussed oil and gas industry employees’ engagement in the political process.
The panel discussion also touched on the tax benefits the oil and gas industry provides to the state and local communities. Dr. Orlando shared research he compiled that shows the industry had total tax payments of nearly one billion dollars to Colorado in 2017 alone.
“More important to the bigger debate is how important these taxes are to the state overall,” Orlando said. “When you think of your typical economic activity and the fiscal flows that go from industry activity to the state, they tend to be corporate taxes, employee taxes and maybe some property taxes. What is interesting is that oil and gas pays like other corporations, they pay employee taxes, but their property taxes are assessed at a higher rate.”
Orlando also explained that oil and gas companies pay the same corporate taxes as other companies, but in addition, they pay a severance tax on all production.
Merritt went on to point out the oil and gas industry’s impact on Colorado’s National Parks.
“Over the past five decades, $278.6 million in land and water conservation funds have been distributed to our national parks and national conservation areas to help maintain those places,” Merritt said.
Wrapping up the event, Cooke, whose district includes energy-rich Weld County, discussed the impact of his county to the state.
“The economy in Denver will evaporate if oil and gas is curtailed in Weld County,” he said. “This state relies on oil and gas revenues to survive.”
The Colorado Policy Forum is the first in a series of forums in states where PESA members operate. Future events will be held in West Texas, Oklahoma, New Mexico, Louisiana and more. For more information on future policy forums, please contact Senior Director Government Services Kristin Hincke.