Colorado Distribution of Oil and Gas Revenue Initiative (2014)

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A Colorado Distribution of Oil and Gas Revenue Initiative did not make the November 4, 2014 ballot in Colorado as an initiated state statute. The measure would have prevented local governments that prohibit oil and gas production or development from receiving any oil and gas revenues administered by the state during the prohibition. It would have also affected the oil and gas revenues distributed to a special district that contains any local governments with such prohibitions.[1][2]

Text of measure

If the measure had been placed on the ballot, the language would have read as:[1]

Shall there be a change to the Colorado Revised Statutes concerning the distribution of oil and gas revenues administered by the state, and, in connection therewith, prohibiting a local government that prohibits oil and gas production or development from receiving any oil and gas revenues administered by the state during the prohibition; providing for the proportional reduction of such oil and gas revenues distributed to a special district not having a prohibition based upon the extent the district’s boundaries overlap with the boundaries of a local government having such a prohibition; and requiring those revenues be redistributed to other local governments that allow oil and gas production or development?[3]

Support

  • Jerry Sonnenberg, primary proponent
  • Frank McNulty, second proponent

Background

See Fracking in Colorado for a full explanation of how fracking is affecting that state.
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Policy and Elections
Energy policy is a major issue in Colorado. Find out more about Colorado Energy policy.

Democrats across the state worked to create a strong coalition of progressives over the decade prior to this measure's proposal. According to Politico, however, this coalition became threatened as Democratic state leaders split over fracking policy in Colorado. This potential split made the presence of fracking-related measures such as this measure on the Colorado ballot a balancing act for those running for office this November. Although these measures did not specifically address fracking they were intended to address problems that some groups felt have arrived because of fracking.[4]

Fracking is the process of injecting fluid - mostly water and sand but with additional chemicals - into the ground at a high pressure in order to fracture shale rocks, releasing the oil and natural gas inside. This practice is controversial, as many of the chemicals used are alleged by opponents to be toxic or carcinogenic. Activists who are against the method argue that it releases methane and harmful chemicals into nearby ground water. However, supporters of the process argue that, in fact, none of the chemicals are dangerous.[5] They further contend that fracking significantly increases domestic oil output and could eventually lead the United States to energy independence.[6]

In 2013, local ballot measures in four Colorado cities sought to put a moratorium on fracking. All four got the green light from voters.[7] One of the local Colorado fracking measures was approved by such a thin margin that a recount was held. The recount upheld the original election results, showing the measure was approved 50.04 to 49.96 percent.

Fracking has been occurring in Colorado since 1969.[8] Naturally seeping oil was found by settlers in Colorado as far back as 1876.[9] In 1901 the first recorded oil well was drilled in the Pierre Shale formation. Then, in 1969, an early form of hydraulic fracturing was used near Rifle, Colorado. Massive fracking occurred in the Watternberg Gas Field beginning in 1973, and was one of the first large-scale fracking operations.[10]

Map of oil and gas permits in Colorado as of June 1, 2014

The map to the right shows active oil and gas permits in Colorado as of June 1, 2014. A green dot indicates that the Colorado Oil and Gas Conservation Commission, the state agency that oversees the oil and gas industry, has issued a permit, but does not necessarily indicate that an oil or gas well is there. The light blue areas are oil and gas basins.

When it comes to regulating fracking, the U.S. Bureau of Land Management (BLM) oversees a significant portion of oil and gas activity in Colorado because it occurs on land they manage.[11] At the state level the Colorado Oil and Gas Conservation Commission (COGCC) oversees the permitting and tracking for all oil and gas wells in the state. This process includes reviewing and permitting all new wells, approving reclamation of well pad areas once drilling has been completed and reviewing mechanical equipment tests. The COGCC works with the Colorado Department of Public Health and the Environment and Colorado Air Quality Control Commission on dust and odor permitting.[12][13][14]

In Colorado, large oil and gas producers have been working with environmental groups and the Colorado Air Quality Control Commission to limit methane and VOC emissions. Colorado was the first state to regulate methane emissions. These rules require companies to control or capture 95 percent of emissions. Operators have 15 days to repair methane leaks and are subject to routine inspections. These regulations are expected to cost the industry between $40 million and $100 million.[15][16] Another controversial issue in Colorado has been the distance between homes, schools and other buildings and oil and gas wells. Before 2013 oil and gas wells were required to be 350 feet from high-density areas and 150 feet from homes. In 2013 the COGCC revised their standards and increased the setback minimum to 500 feet, although this setback can be waived.[17]


Path to the ballot

See also: Laws governing the initiative process in Colorado

Supporters were required to gather 86,105 valid signatures by Monday, August 4 at 3:00 PM for the measure to appear on the ballot. While supporters submitted signatures by the deadline, they later withdrew the initiative following negotiations.[18]

See also

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External links

Additional reading

References

  1. 1.0 1.1 Colorado Secretary of State, "Results for Proposed Initiative #121 Ballot Title Setting Board 2013-2014," accessed May 23, 2014
  2. Legislative Council Staff and Office of Legislative Legal Services, "Memo to Jerry Sonnenberg and Frank McNulty: Proposed initiative measure 2013-2014 #121, concerning distribution of oil and gas revenue," April 1, 2014
  3. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  4. Politico Magazine, "How Fracking Could Break Colorado Democrats," April 15, 2014
  5. Frac Focus chemical disclosure website
  6. Bloomberg, "Fracking Boom Pushes U.S. Oil Output to 25-Year High," December 11, 2013
  7. National Geographic, "Results Mixed on Colorado and Ohio Fracking Ban Initiatives," November 6, 2013
  8. Leeds School of Business, Business Research Division, University of Colorado Boulder, "Hydraulic Fracturing Ban, The Economic Impact of a Statewide Fracking Ban in Colorado," March 2014
  9. Daily Reckoning, "Oil Shale Reserves," accessed April 23, 2014
  10. Leeds School of Business, Business Research Division, University of Colorado Boulder, "Hydraulic Fracturing Ban, The Economic Impact of a Statewide Fracking Ban in Colorado," March 2014
  11. U.S. Bureau of Land Management, "Fracking on BLM Colorado Well Sites," accessed May 9, 2014
  12. Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study," January 2014
  13. Colorado Department of Public Health and the Environment, "Oil and Gas Odor and Dust Permitting," May 12, 2014
  14. Colorado Department of Public Health and the Environment, "Colorado Oil and Gas Conservation Commission (COGCC) 805 series requirement," September 28, 2009
  15. The Denver Post, "Colorado adopts tougher air rules for oil, gas industry," February 25, 2014
  16. Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study," January 2014
  17. Leeds School of Business, Business Research Division, University of Colorado Boulder, "Hydraulic Fracturing Ban, The Economic Impact of a Statewide Fracking Ban in Colorado," March 2014
  18. Governing, "Last-Minute Deal Keeps Fracking Measure Off Colorado Ballot," August 5, 2014