2013 LEGISLATIVE WRAP-UP

No energy to make substantive policy changes

The Colorado Statesman

When the legislative session started in January, Democrats seemed energized about cracking down on the oil and gas industry amid concerns over hydraulic fracturing. When the session ended four months later, they were left with little to show.

Gov. John Hickenlooper, a Democrat and former geologist, had expressed his opposition to a handful of bills that directly aimed at greater restrictions on oil and gas development. As a result, much of the legislation that had any teeth was so watered down that environmentalists could hardly call the session a victory, and the bills died.

In addition to blaming Hickenlooper, whom environmentalists nicknamed “Frackenlooper,” they also criticized the oil and gas lobby, pointing to 27 lobbyists at the Capitol. They were astonished to learn that the industry spent more than $1 million on lobbying in the first 10 months of the fiscal year.

A host of environmental organizations and bill sponsors joined Gov. John Hickenlooper for the signing of SB 252, which will raise the renewable energy standard for certain rural electric co-operatives. Watching the governor sign the bill are representatives from the Sierra Club; Eddie Stern of the Colorado Solar Energy Industries Association (far left); bill co-sponsor Senate President John Morse, D-Colorado Springs (third from left); Tom Vessels of Vessels Coal Gas (fifth from left); lobbyist Ben Waters from Waters Public Affairs (sixth from left); Rep. Crisanta Duran, D-Denver (fifth from right); Michael Bowman (fourth from right) and Rep. Max Tyler, D-Lakewood (far right).
Photo by Marianne Goodland/The Colorado Statesman

“Coloradans rightfully concerned about the increasing impacts of drilling and fracking on our children, communities, public health and environment were pushed aside by an aggressive lobbying effort from the multi-billion dollar oil and gas industry,” Pete Maysmith, executive director of Conservation Colorado, declared at the end of the legislative session.

“At times working in concert with the Hickenlooper Administration, the industry was able to defeat, or significantly weaken, measures that would have brought greater transparency and accountability to their operations and given equal weight to protection of environment, public health and communities,” Maysmith continued.

Hickenlooper and the industry were unapologetic. At one point in February, Hickenlooper told the U.S. Senate Committee on Energy and Natural Resources during an appearance in Washington, D.C. that he once took a sip of frack fluid produced by Houston-based Halliburton. His point was to highlight that there is an unjustifiable frenzy surrounding the controversial drilling process.

“Don’t you think it’s fair to say that it wasn’t intended as a political statement? It was intended as a description of the honest efforts that the industry is trying to make to have an industrial fluid that was totally harmless to the environment,” Hickenlooper told reporters in the aftermath of his frack fluid comment.

But that just empowered environmentalists. They had already joked that the governor was drinking the “frack-aid” because of his cozy relationship with the oil and gas industry. To have him actually admit to it was shocking.

Their displeasure with the governor intensified last year when communities in Boulder County took steps to restrict fracking. First the city of Longmont enacted its own rules and regulations separate of the state. Then voters in November backed a ban on fracking.

The Hickenlooper administration is suing Longmont for having enacted its own rules. That case is still in the motions phase. Separately, the Colorado Oil and Gas Association is suing the City of Longmont over the ban. Hickenlooper has promised to support the industry in its lawsuit.

Throughout the legislative session the governor faced hecklers as he stated his support for fracking. And his administration’s pushback against local governments enacting their own rules caused ire with state lawmakers.

Effort faces resistance

At the beginning of the legislative session, the Colorado Oil and Gas Conservation Commission, which is tasked with regulating the oil and gas industry, was still crafting statewide rules and regulations around fracking. What they came up with was a 500-foot universal setback of wells and a water quality-testing requirement both before and after a well is drilled.

But that wasn’t enough. Even before the COGCC had finished its work, some Democrats were plotting legislation. They had discussed bills that would have increased setbacks to as far as 2,000 feet and offered local governments the power to craft separate rules and regulations. But those bills were never even introduced.

What the legislature ended up with was a list of failed bills that included:

• House Bill 1267, sponsored by Rep. Mike Foote, D-Lafayette, which would have increased industry fines. Foote killed the bill after Hickenlooper’s lobbyists were successful in stripping a minimum fine of $5,000 per violation per day, despite the industry supporting overall increased fines;

• House Bill 1269, sponsored by Foote, which would have prohibited a newly appointed COGCC commissioner from being employed by an oil and gas operator. The goal of the legislation was to repurpose the commission to focus less on the industry and more on the environment. But a handful of Senate Democrats joined Republicans in opposing the bill, and the measure was lost;

• House Bill 1316, sponsored by House Majority Leader Dickey Lee Hullinghorst, D-Boulder, and Rep. Joe Salazar, D-Thornton, which would have added the Wattenberg Field in Weld County to the state’s newly adopted ground-water testing program. Once again, Senate Democrats joined with Republicans to kill the measure;

• House Bill 1268, sponsored by Rep. Dominick Moreno, D-Commerce City, which would have required sellers of real estate to disclose any mineral rights associated with the property. The measure died in a Senate committee on May 1;

• House Bill 1273, sponsored by Rep. Randy Fischer, D-Fort Collins, which would have required oil and gas operators to pay a state fee to offset local government’s costs of having a designated person work with the COGCC on reviewing applications for drilling and operating permits within those local jurisdictions. The measure died in a Senate committee on April 30;

• House Bill 1275, sponsored by Rep. Joann Ginal, D-Fort Collins, which would have authorized a review of health data related to the effects of oil and gas operations in Larimer, Weld, Boulder and Arapahoe counties. The measure died in a House committee on April 11; and

• Senate Bill 284, sponsored by Sen. Morgan Carroll, D-Aurora, which would have expedited the health department’s review process for oil and gas operators committed to honoring enhanced air and water pollution control standards.
In fact, only two of the nine oil and gas bills pushed by Democrats made it through, including:

• Senate Bill 202, sponsored by Sen. Matt Jones, D-Louisville, which requires a study to identify the riskiest oil and gas activities in order to create a risk-based strategy for inspecting well sites. The bill had originally sought to have enough inspectors to inspect each location once per year, but it was later amended; and

• House Bill 1278, sponsored by Rep. Diane Mitsch Bush, D-Steamboat Springs, which requires an oil and gas operator to report an oil or waste spill of one barrel or more within 24 hours.

Foote was livid at the end of the session, disgusted at the failure of the majority of the oil and gas bills.

“There’s nothing that I’ve seen that would make me think that they’re going to change that behavior,” he said of the industry from the House floor in the waning hours of the legislative session.

Jones, who had been his cohort, was equally displeased: “There’s 20-plus oil and gas lobbyists, and the Department of Natural Resources didn’t support many bills, in fact, they actively opposed,” he spoke of the failed effort.

Meanwhile, the industry scoffed at the idea of an uneven lobbying effort that caused the demise of legislation. Doug Flanders, spokesman for the Colorado Oil and Gas Association, pointed out that for every oil and gas lobbyist, there are even more lobbyists for conservationists.

“The industry saw… bills which would negatively affect oil and gas operations in the state from legislators hailing from areas that have a deep, professional anti-oil and gas activist community — whose activities are fueled by national and state organizations whose intent is to topple the oil and gas industry…” asserted Flanders. “The industry knows legislators will be trying to stop oil and gas activity and that these anti-fracking foes the legislators are trying to motivate are the same ones that want to ban fracking all together, which is a ban on oil and gas drilling.”

In fact, Democratic leadership has already promised to come back with more bills that crack down on the industry. Leaders in both the House and Senate say their work has just begun and that the Democratic-controlled legislature will take another crack at it again next year.

“Oil and gas is just getting started,” said Senate Majority Leader Carroll. “The record pace of oil and gas drilling, places that are closer and closer within municipal city limits, means that this issue is affecting property owners throughout the state. There are a lot of unresolved issues.”

Rural renewable energy standard

Where Democrats were victorious was on Senate Bill 252, a bill pushed by Democratic leadership, including Senate President John Morse, D-Colorado Springs, and House Speaker Mark Ferrandino, D-Denver. It became one of the most important bills to the Democrats’ political and policy agendas.

The measure requires certain rural electric utilities to double their use of renewable resources by 2020. It applies to electric providers with at least 100,000 meters, breaking down to two electric co-operatives, including Tri-State Generation and Transmission and Intermountain Rural Electric Association.

The two co-ops are required to increase their use of renewable energy sources from the previous requirement of 10 percent, set in 2007, to 20 percent by 2020.

In a Democratic-controlled session that already had Republicans screaming, SB 252 was sort of the last straw. It faced opposition from rural communities and their lawmakers who pointed out that electric bills will significantly increase. Tri-State claims it will cost them $2 billion to $4 billion to implement the bill in the six-year timeframe, and that money will be passed along to ratepayers.

While the bill sets a 2-percent annual limit on utility bill increases, up from a 1-percent cap set in 2007, co-ops and Republicans suggested that the formula is unworkable and therefore a hardship for rural communities.

Perhaps more frustrating to opponents was that Hickenlooper took his precious time making a decision on the bill. Conservative interests asked the governor to take out his veto pen.

Hickenlooper is up for re-election in 2014, and Republicans say his signature on the bill will come back to haunt him.

Highlighting his struggle with the bill, Hickenlooper issued a signing statement explaining why he felt compelled to sign it.

“I had misgivings, and there were challenges around the bill,” he said of why he waited until the last minute to sign the polarizing bill.

“The reasons for signing the legislation outweigh the reasons for vetoing the bill, but this bill is imperfect,” Hickenlooper conceded in his signing statement. “Some of the concerns raised during the legislative process were not given due consideration.”

Before the governor’s signature had even dried, Republicans lined up to attack. Sen. Randy Baumgardner, who represents the rural district surrounding Hot Sulphur Springs, said the governor exercised “poor leadership.”

“It’s a slap in the face of rural Colorado,” he said. “We sign a piece of legislation into law that we’re not sure is going to work?”

But sponsors suggested that the intent of the bill is to wean the state away from traditional energy in an effort to protect the environment, which has long-lasting benefits to the state that will sustain its climate and economy in the years to come.

Ferrandino called the bill a “win-win,” adding, “It will create jobs and spur economic development in rural Colorado, clean our air and reduce our dependence on fossil fuels.”

Peter@coloradostatesman.com

See the June 21 print edition for a full listing of all the legislative enactments from the 2013 session.