McInnis, Hickenlooper differ on oil, gas regs

By Ernest Luning
THE COLORADO STATESMAN

Colorado’s two leading gubernatorial candidates on Tuesday told a group of energy executives that the state’s new oil and gas rules could use an update. But they differed whether that means a wholesale revamp or meticulous adjustments.

At a forum sponsored by the Denver Petroleum Club, Denver Mayor John Hickenlooper and former U.S. Rep. Scott McInnis surveyed the state of the oil and gas industry in Colorado and offered proposals to pull the conversation back from what both characterized as polarized extremes.

Scott McInnis
Photo by Jamie Cotten/The Colorado Statesman

Both Hickenlooper — who got his start in Colorado as a petroleum geologist — and McInnis — who represented the state’s most productive energy fields in Congress for a dozen years — sounded at home in front of the crowd, and both asked for the industry’s support.

Evergreen businessman Dan Maes, who is vying for the Republican nomination for governor against McInnis, wasn’t invited to the debate, a campaign spokesman said. Hickenlooper is unopposed for the Democratic nomination.

Judging by the results of an instant poll conducted among audience members — using hand-held opinion meters — the state’s oil and gas crowd believes its industry is treated unfairly in Colorado and is on the decline. By a large margin, those who registered their opinions said government regulation is the top issue facing the industry, outweighing environmental concerns and commodity prices.

The forum was moderated by 9News political reporter Adam Schrager, who posed questions from his television audience to the candidates after each gave lengthy opening remarks.

Last year’s tough oil and gas regulations are responsible for driving jobs out of Colorado, McInnis told the crowd of about 250. He also blasted Hickenlooper for allowing the rules to go into effect without protest, despite what he called the industry’s enormous impact on Denver’s economy.

“Colorado moved from a state that was very friendly — that also had best practices in place, but also knew how to put people to work,” McInnis said. “All of a sudden, we began to swing and became one of the toughest states to do business in.”

He said the contentious climate surrounding oil and gas drilling in Colorado was injecting too much uncertainty into the air, hampering the business.

“We need to have certainty,” McInnis said, reiterating key advice he said Texas Gov. Rick Perry passed on in a recent conversation. “Capital flees uncertainty, and capital has fled Colorado. These (oil and gas) rules — and uncertainty, combined with a low-cost environment — have driven these jobs out of the state.”

Denver Mayor John Hickenlooper
Photo by Jamie Cotten/The Colorado Statesman

McInnis said it was time to bring an end to the inflexible positions that have defined the debate over energy extraction in Colorado.

“What we don’t need are people on either extreme,” he said, “the people who say ‘drill, baby, drill’ — we don’t need that — but we don’t need the people on the other extreme, either.”

Staking out his own version of a middle course, Hickenlooper — who made frequent reference to his work as a geologist before opening a brewpub in Denver after the oil and gas industry crashed in the 1980s — outlined a series of steps he said would encourage compromise between factions that agree about more than they realize.

Noting that he was still a member of the American Association of Petroleum Geologists, Hickenlooper argued that his own history gave him “a certain perspective — there’s not so much separating the different sides in this issue.”

When it comes down to it, he said, the various sides “agree on 90 to 95 percent of the issues” and can reach positions they can all live with, if only they sit down and talk.

“If we can’t get 100 percent of the oil,” he suggested, “how do we get 85 percent, 90 percent?” On the other side, he said, “How do we limit encroachment on the environment to be as little as possible?”

Hickenlooper allowed that a review of the recently enacted oil and gas rules might find some of them were “onerous,” but cautioned against throwing the lot of them out, which would “create a firestorm of needless animosity.”

He said the rules should be less burdensome on oil and gas exploration.

“Our pledge is to make sure we cut every possible piece of unnecessary red tape you can cut,” Hickenlooper said, adding that his experience in the restaurant business taught him a few things about red tape.

He said that while the “vast majority” of the new rules were assembled from the industry’s own best practices, he was sympathetic to complaints that some mandates had been written too broadly. He suggested the next governor “should be open to letting the oil and gas commission moderate and ameliorate those.”

As an example, he pointed to the range of circumstances he encountered on a recent trip to southern Colorado’s Raton Basin, where the coalbed methane field is among the most productive in the United States.

Near Trinidad, Hickenlooper said, leftover water from natural gas drilling isn’t potable but has agricultural uses, which he called a “perfect example of how we want our oil and gas industry to work with our rural economies.”

But not very far north, in Walsenburg, residents have “a sense of desperation, an entire town concerned about their drinking water” because of fears of contamination from natural gas drilling.

That’s the challenge, he said, to tailor rules written for statewide application when things work out so differently from place to place.

The two also disagreed over the character of appointees they would name to the Colorado Oil and Gas Conservation Commission, the body that writes and enforces state rules on the industry.

Six of the body’s nine commissioners are serving terms that expire in July 2011, so the next governor will be able to put a considerable stamp on the board.

“Some people say, let’s put people on the boards who have great personalities,” McInnis said, in a dig at Hickenlooper’s suggestion. “That’s not who you put on the board — you want experts on the boards.”

Lamenting that the regulations have been “driven by emotion,” McInnis proposed an antidote: “The reality of this is, it’s too important for us to ignore expertise.”

“You want to make sure you get balanced people in there so you get all perspectives, and try to take politics out of it,” Hickenlooper said. Later in the discussion, he added that he wants to appoint “people who are good at approaching compromise,” not “subject-matter experts, who are there to serve the commission.”

Most important, Hickenlooper said, is appointing commissioners who’d rather sort things out than fight it out.

“When I was a kid,” he said, “my dad told me, ‘If you can’t talk your way out of a fight, you deserve to be whipped.’ ”

Ernest@coloradostatesman.com