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Don't Expect Colorado Anti-Drilling Opponents to Pack Up, Says Industry

Two citizen-backed initiatives that could have put a major squeeze on Colorado's oil and natural gas industry may have failed to make the November ballot, but don't expect anti-drilling groups to give up. There will be a next time, industry professionals said at last week's Rocky Mountain Energy Summit in Denver.

During the annual Colorado Oil & Gas Association (COGA) meeting, most of the conference talk was about the stringent amendments, which basically would have prevented most new exploration and production in the energy-rich portions of the state. Colorado Gov. John Hickenlooper and other exploration and production executives said they expected the initiatives would fail (see Shale Daily, Aug. 26; Aug. 23). The Colorado Secretary of State’s office announced Monday that there were not enough signatures on the petitions for the restrictive Initiatives 75 and 78 to qualify for the November ballot (see related story).

But they also don't expect the attempts to be the final ones by environmental groups to curtail oil and gas operations. Asked what producers should do if the initiatives failed, Noble Energy Inc. Senior Vice President Chip Rimer, who oversees U.S. onshore operations, gave simple advice.

"Don't stop, keep educating," he told the audience last week. "We've educated our workforce, educated suppliers, gone out into the world. Work as much as you can to tell the story..." to show stakeholders the technology and the things being done to improve operations. "Help them understand how safe operations are, how we keep everything in the pipe.

"We can't stop now," and pretend that protesters won't attempt more constitutional amendments in the next election two years from now. "Keeping it in the ground is not the right answer," but the public has to understand why.

Bayswater Exploration & Production LLC CEO Steve Struna, a Denver native, said he hoped to see the day when the oil and gas industry "was just like any other manufacturing industry...accepted and a viable part of the state. This can be accomplished. It's not a trade off between environmentalists and natural resource development. We can have both."

Rimer served on Gov. John Hickenlooper's energy task force from 2014-2015, a disparate group that cobbled together agreements giving local governments more opportunities to work on energy development, among other things (see Shale Daily, Jan. 26). Once opponents of oil and gas drilling understood how many jobs and how much revenue were provided -- as well as environmental initiatives underway by operators, they were more amenable to exploration, he said.

Environmental groups have made the region ground zero in their quest to reduce drilling and increase renewables use. And Colorado's constitution is difficult but not impossible to amend. The number of signatures required for a successful petition to amend the constitution is equal to 5% of the total number of votes cast for the office of Colorado secretary of state in the preceding general election.

While the oil and gas industry continues to be a leading employer and source of tax revenue, the state also has been a mecca for new residents in recent years, many of whom are fighting for more renewable energy.

"Since 1910, we've had 220 amendments," Rimer said. However, the average number of amendments has jumped in the last 20 years, reaching about 40 per decade.

The energy industry of late has been in the crosshairs. Rimer, based in Denver, said there are days when he wants to "run back to Texas," where the regulatory regime is more producer friendly.

"For Noble, it's not a quick fix," he told the COGA audience. "It's not going to happen overnight. It's a long period of time...You have to educate the public about what your oil and gas values are...Make sure the public is educated...The polling says three out of four are in favor of oil and gas, and you have to make sure [opponents] understand that."

From being part of a lot of focus groups, Rimer said he was surprised how little understanding there is by the public of the role of oil and gas in people's lives.

"The onus is on ourselves to educate the people," he said. "We've done a poor job...We've lost a generation that don't trust us." The learning process has to start at the elementary school level "all the way to college" to stress the importance of oil and gas and how industry revenue positively impacts the region's tax base, the schools and the roads.

Rimer advised the industry participants to be actively involved in COGA and to "stay on message. Don't confuse the public."

Transparency also is key, he said. Build it with the stakeholders early in the process and stay connected. "We want to get out and make sure they clearly understand" what a project will entail.

"We are part of the ecological system," Rimer said. Stress to the public "the 'Three E's,' the energy we need, the economy we want and the environment we value."

Struna said the best avenue to educate is "face to face outreach" versus advertising. For example, his company provides financial support for the Colorado State University's Engineering Career Fair, which gives management the opportunity to connect with young people -- and in particular with young voters.

Bayswater also collaborates with affected stakeholders as early as possible, "primarily around neighborhoods, open houses when we are getting ready to commence drilling activities. We talk to all the neighbors."

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