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Colorado Lawmakers Reignite the State’s ‘Oil and Gas Wars’

Colorado Lawmakers Reignite the State’s ‘Oil and Gas Wars’

Upon signing legislation to usher in a new regulatory paradigm for the industry, Governor Jared Polis famously declared an end to Colorado’s oil and gas wars in 2019. The state’s saber-rattling legislature has other ideas in mind for 2024.

Emboldened by historic majorities in the legislature, Colorado Democrats have introduced Senate Bill 159, a measure to ban new oil and gas drilling in the state by 2030.

It would accomplish this goal by directing the state Energy and Carbon Management Commission, the recently rebranded agency tasked with overseeing oil and gas permitting, to begin phasing down approvals for new wells in 2028 and completely halt any new permit issuance on January 1, 2030. Furthermore, the proposed legislation would automatically terminate any permit issued before the cut-off date if operators don’t begin drilling by 2032.

The legislation represents the most blatant attack on domestic energy production in the state since lawmakers adopted the country’s strictest oil and gas regulations (against the will of Colorado voters) in 2019, prompting Polis to initially declare détente.

Its recklessness betrays the seriousness with which it should be taken. The bill should not be laughed off as a protest measure filed by some fringe backbencher looking to earn plaudits from progressive special interests. SB 159 has secured sponsorship from prominent lawmakers in both chambers of the state legislature, including Senator Kevin Priola, a Democrat who represents part of Colorado’s most productive oil and gas county.

Nor should it be confused with previous symbolic energy bans in states such as New York when it banned fracking in 2014. In Colorado, unlike the Empire State, oil and gas is a prolific industry, and the ban’s economic consequences would be severe.

2023 study prepared by PricewaterhouseCoopers (PwC) found that the oil and gas industry supports more than 300,000 jobs and generates more than $48 billion in Colorado annually—or 11.2% of the state’s total GDP.

Colorado ranks as the fifth-largest crude oil-producing and the eighth-largest natural gas-producing state in the country, according to federal government data, with enough exploitable reserves of each to maintain its stature for the foreseeable future. That’s important because federal estimates project that U.S. oil and gas production will continue to grow through 2050, prompted by steady domestic consumption and rising global demand for American hydrocarbons.

Despite ongoing efforts from Colorado lawmakers and regulators to push residents into all-electric cars, internal combustion engines still power more than 98% of the light-duty vehicles on the state’s roads, making petroleum an essential commodity for its drivers.

Meanwhile, natural gas remains by far the most widely consumed energy source in the state each year, helping nearly 7 out of every 10 Colorado homes stay warm in the winter. It also generates more than a quarter of the state’s annual electricity, and Colorado’s major utilities are investing in even more natural gas capacity to replace closing coal plants and back up intermittent wind and solar power.

In other words, a ban on new oil and gas production in Colorado would do nothing to stem the overall production and consumption of fossil fuels in the medium term—the apparent goal of the climate-conscious lawmakers who introduced the measure. Instead, it would simply ensure that Colorado producers miss the boat as suppliers elsewhere reap the economic benefits of contributing to an energy-rich future. It’s a government-imposed industry demise for little material gain.

Even more troubling is that the bill is not being proposed in a vacuum. A separate bill co-sponsored by Priola, Senate Bill 165, would have a much more immediate impact on energy producers and consumers alike. SB 165 would, among other things, ban oil and gas production in the state between the months of May and September and direct state transportation regulators to craft rules to reduce vehicle miles traveled for private citizens.

Taken together, the bills represent a concerted effort to gradually squeeze the life out of the state’s oil and gas industry by decimating its productive capacity, while artificially restricting the demand for its products by heavy-handed government fiat.

The state’s radical turn against its prolific industry is a cautionary tale for energy politics nationwide. While reducing harmful emissions where possible is indeed a worthwhile goal, a little perspective is needed.

Colorado, as a whole, contributes just 1.7% of the country’s annual carbon dioxide emissions. Its oil and gas and transportation sectors represent just a subset of that total. Policymakers will not solve a global problem like climate change by snuffing out the extractive industry of a single state.

That these bills are even under serious consideration demonstrates how climate myopia can lead even the most productive states to choose economic self-harm in the name of marginal environmental progress. Should their aims succeed, we’ll all be worse off for it.

A version of this article originally appeared in Complete Colorado.

Jake Fogleman