The oil and gas industry leaders who filled the ballroom at the Colorado Convention Center on Wednesday were avid to hear Democratic Gov. John Hickenlooper discuss the deal unveiled earlier this week to head off a clash at the ballot box over hydraulic fracturing, but it was an off-hand comment about the Keystone XL pipeline that set off a frenzy of denunciation from Hickenlooper’s political opponents.
Hickenlooper was joined on stage by Republican Gov. Gary Herbert of Utah for a 75-minute, freewheeling discussion titled “Unscripted Ascent: Energy the Western Way” on Wednesday afternoon at the Rocky Mountain Energy Summit, sponsored by the Colorado Oil & Gas Association. The talk, part of the three-day energy expo, was moderated by Houston Chronicle reporter Jennifer Dlouhy, and was also sponsored by the Western Governors Association.
Though she noted that there would be plenty of time to discuss other topics — from sage grouse habitat to water concerns — Dlouhy opened with a question for Hickenlooper, who had two days earlier brokered an agreement between U.S. Rep. Jared Polis, the Boulder Democrat who had been funding a campaign to restrict fracking in the state, and an industry prepared to pour tens of millions of dollars fighting what they perceived as a threat to their ability to operate in Colorado. As part of the compromise, Polis and industry backers both pulled competing sets of ballot measures and Hickenlooper created a commission empowered with bridging the gap between residents, environmentalists and the energy industry.
She wondered if the commission has to produce a bargain that results in legislation in order to be considered a success.
“It doesn’t have to,” Hickenlooper began, and then said that a goal might be to “get to regulation,” adding that gathering everyone at the table with an intention of “agreeing on the facts” was a critical step in resolving the conflict.
“Once we all get to the same set of facts,” Hickenlooper said, “(We need to) figure out how do we make sure we do everything we can to protect people’s quiet enjoyment and also respect people’s private property.”
“Hydraulic fracturing has been a godsend,” Herbert said, saying that both the “abundance” and the “low cost” of energy fuels the economy in Utah and the rest of the country.
“We’re getting cleaner in all forms of energy,” Herbert stressed. “Oil and gas and coal are cleaner now than they were a decade ago or a generation ago — not only in the processing of the energy but in the extraction of the energy.”
After going through the lengthy process of setting regulations for methane emissions, Hickenlooper said, an energy company executive involved in the negotiations pointed out that his company had already been performing under the new standards, which were the first established in the nation. “We just hadn’t done, and I don’t think the industry has done a good enough job of explaining just how clean the industry has become. Done properly, fracking is a completely safe process.”
Hickenlooper, whose career as a petroleum geologist was cut short during an industry downturn in the 1980s before he founded a brewpub and later entered politics, added that he pressed forward to avert the ballot measures backed by Polis — one would have given local governments the power to ban fracking, the other would have increased the current requirement for a 500-foot setback from occupied buildings to 2,000 feet — in large part because they would have thrown one of the state’s key industries into turmoil, whether they passed or not.
“Capital is going to go wherever there is predictability, and there is an expectation they know what’s going to come,” Hickenlooper said, relating one of several conversations he said he’d had with a financier who warned that a billion-dollar investment in the state would evaporate if the ballot measures were pending.
In addition, Hickenlooper said, the 2,000-foot setback requirement would likely have led to numerous lawsuits, which attorneys concluded the state would likely lose and wind up on the hook for expensive judgments for blocking access to mineral property.
“The financial risk was unacceptable,” Hickenlooper said, adding that he would have preferred to leave two industry-backed measures on the ballot “but just couldn’t see how — if there was a way to get that risk off the table, I thought we had to do it.”
But it was a remark Hickenlooper made about the proposed Keystone XL pipeline — which would transmit oil from Alberta, Canada, to Gulf Coast refineries — that triggered condemnation from Republicans.
The pipeline is a flashpoint between environmentalists who say the conduit for sulphur-rich Canadian oil extracted will accelerate climate change and an industry that touts economic benefits. Backers say the crude — locked in what Hickenlooper noted used to be called the “tar sands” but are now dubbed “oil sands” — will be exploited anyway, and that American refineries at the end of the proposed pipeline ought to reap the rewards.
The Keystone XL pipeline was “being stymied because of politics as opposed to what’s the sensible thing to do,” Herbert said, adding that pipelines are more sensible and safer than transporting energy resources by truck or train. “I don’t see any reason for the Keystone pipeline not to be given the green light,” he said, citing the states on the route having given the green light and the multi-billion-dollar boost to the economy. “It’s just silly to me that we’re not getting that done.”
On a trip to Alberta last year, Hickenlooper said that he asked a group of environmentalists — who were staunchly opposed to the pipeline — what the actual cost would be to clean up the oil extracted from the sands. They told him it would be about $4 per barrel, leading the governor to suggest that there’s probably a solution, since that isn’t an enormous share of the price of oil.
Then, asked by the moderator whether he supports building the pipeline, Hickenlooper drew laughter from the crowd when he answered, “I wouldn’t even take a position because it’s going to piss off a lot of people in Washington that I don’t need to piss off. And my opinion’s not going to change anybody’s opinion there.”
Hickenlooper added, “But I do think it’s worth spending some time to figure out, how do we get this logjam done? As Gary (Herbert) says, it’s a political issue. We’re going to be better served if we can find out a solution that allows us to go forward.”
Almost immediately — a Durango Herald reporter tweeted a paraphrase of the crack about potentially “pissing off” D.C. denizens — Hickenlooper’s Republican opponent, former U.S. Rep. Bob Beauprez, fired off a response.
“John Hickenlooper is far too concerned about what other people think,” Beauprez said in a statement blasted out by his campaign. “Whether it’s Barack Obama, Michael Bloomberg, Jared Polis, ‘large donors’ or now generally ‘people in Washington,’ there’s an endless list of people John Hickenlooper will carry water for, but what Coloradans want to know is this: Where do you stand, and will you stand up for us?”
Beauprez continued, “I resoundingly support policies, such as the Keystone XL pipeline, that help America create jobs, lead to energy independence, and produce safe, clean energy to fuel our economy. If these objectives are upsetting to people in Washington, so be it. It’s what’s in the best interest of Coloradans.”
Colorado GOP Chairman Ryan Call poured on: “Coloradans expect their leaders to stand up for their interests — even if that means angering people in Washington, D.C. The Keystone Pipeline is clearly in the interest of Coloradans and is supported by a wide majority of our citizens. It’s time we had a leader in the governor’s office who isn’t afraid to fight for Coloradans, even if that means angering a few donors and Washington politicians along the way.”
Although Democrats pointed out that the pipeline’s route doesn’t pass through Colorado, and that it’s a federal issue, the Republican Governors Association called Hickenlooper’s remark “just the latest example of Hickenlooper’s failure to lead on important issues.”
But Colorado Democratic Party Chairman Rick Palacio told The Colorado Statesman that the criticism of Hickenlooper was misplaced.
“Gov. Hickenlooper has demonstrated time and again he leads with his actions, by building consensus, most recently, bringing the state together for the Oil and Gas Task Force solution for the greater good of the state’s economy and environment,” Palacio said.
Palacio then took aim at Beauprez.
“Trying to understand what Bob Beauprez thinks is like trying to predict what a kid is going to want in a grocery store candy aisle; is it the Snickers bar or the M&M’s today? Congressman Beauprez needs to come clean and have a coherent position on Colorado’s energy economy. First he said that local governments should have authority over oil and gas setback regulations. Then he did an about-face and opposed the legislative agreement between the oil and gas industry and environmental groups. Now, most recently, I guess for good measure, he condemned the ballot measures being taken down.”
See the August 8 print edition for full photo coverage.