Two oil/natural gas ballot measures in Colorado that are strongly opposed by the industry were submitted to state officials for signature verification on Monday, the state imposed deadline for submittal.
The CEO of a major producer with a stake in Colorado, PDC Energy Inc.'s Bart Brookman, expressed doubts that the measures had collected enough valid signatures. "We know that experts say validation rates generally are going to be somewhere in the 60% to low-70% range, depending on whether the signature gatherers are volunteers or paid," Brookman said.
The Colorado Oil and Gas Association (COGA) officials attributed the two measures (No. 75 and No. 78) to relentless anti-oil/gas activists and "out-of-state special interests" pushing for bans on hydraulic fracturing (fracking) around the nation. The Colorado Secretary of State's Office has a month to determine if the measures qualify for the November ballot.
"We don't know how many, we don't know how many are valid [signatures]," said Karen Crummy, communications director for the pro-industry group Protecting Colorado's Environment, Economy and Energy Independence.
Noting that industry is looking for an end of Colorado's ongoing cycle of "constant campaigning and political uncertainty" regarding oil/gas issues, COGA CEO Dan Haley, said if the measures qualify for the ballot, "voters will know what's at stake."
And what's at stake Haley summarized as "private property rights, more than $1 billion in state/local taxes that help pay for schools, parks, libraries and roads, energy security for our nation, and good-paying jobs for more than 100,000 working families in the state."
Protect Colorado's Crummy said that the two measures in question could eliminate 90% of all new oil/gas development, amounting to more than 140,000 jobs.
Basically, No. 75 would make it hard to do business in the state by creating a patchwork of different local rules and bans, and No. 78 would increase mandatory setbacks to 2,500 feet from the current 1,000-foot requirement (see Shale Daily, June 7).
David Tameron, senior oil/gas exploration and production analyst at Wells Fargo Securities, noted that initiative backers claimed up to 110,000 signatures, and "to be clear, if [that number] is correct, it means a lower likelihood of either initiative making the November ballot," based on historical signature verification rates.
Nevertheless, Tameron and Dan McSpirit, analyst with BMO Capital Markets Corp., said residual risk from the ongoing uncertainty could negatively affect share prices of Colorado exploration and production companies.
Facing these potential measures, COGA and several industry, business and economic development groups have been working to educate citizens about fracking, which some local governments have attempted to restrict or ban (see Shale Daily, March 4, 2014).
"Setback proposals being considered were designed to mask their true intention, which would essentially ban future oil/gas development in the state," said Josh Penry, principal in EIS Solutions Rockies Region consulting practice. Penry spoke on a news media conference call earlier this year with David Tameron, senior oil/gas exploration and production analyst at Wells Fargo Securities.
Penry and Tameron guessed that there is a 50-50 chance that some anti-oil/gas development measures would obtain enough qualified voter signatures by Monday's state deadline to get on the November ballot. However, Penry expressed strong confidence that voters will reject any of these measures.
"We remain committed to meeting with all stakeholders who have questions and concerns about oil and gas development to find balanced energy solutions," Haley said.
Initiative No. 75 is what a COGA spokesperson called "deceptive" since its "local control" heading would result in belatedly giving local communities the ability to ban fracking.
With 92% of PDC Energy's 2016 capital budget tied to the Colorado Wattenberg field, Scott Reasoner, senior view president for operations, said that the industry is "extremely organized, sophisticated and well-funded in efforts to prevent [the measures] from passing."