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Colorado Governor to COGA: Gas Industry 'Vital' to State

Colorado Gov. Bill Ritter, whose policies have been blamed for driving some producers out of the state, on Thursday told an industry crowd that the natural gas industry was "vital" to the state's future. "Just so there's no mistake, let me say this very clear: It is a permanent part of the new energy economy. It's not a bridge fuel. It's not a transition fuel. It is a mission-critical fuel for us to get to where we need to get to in meeting increasing energy demands and decreasing emissions at the same time."

Ritter was a keynote speaker at the Rocky Mountain Energy Epicenter Conference in Denver, the 21st annual meeting sponsored by the Colorado Oil & Gas Association (COGA).

"A greater use of natural gas lessens our energy dependence and increases our national security at the same time," Ritter told the audience. "And we certainly can't meet Colorado's future energy needs without producing more Colorado natural gas."

The governor drew applause for explaining what he was doing to improve the business climate for Colorado's producers.

One of the "biggest obstacles" now facing the state's gas producers "is the lack of pipeline capacity," he said. "It's why I have, in both letter form and in person, urged the Federal Energy Regulatory Commission to expedite the certification of the Ruby Pipeline Project," which is sponsored by El Paso Corp. (see NGI, April 13). "I'm doing everything I can to facilitate the construction of pipeline infrastructure so that we can move Colorado gas to lucrative regional markets such as California and the West Coast."

The industry audience, which has not supported the Democratic governor's more stringent regulatory policies, listened as Ritter explained what he was doing to give producers more advantages at the federal level. Among other things, Ritter earlier this year urged Congress to retain the federal Intangible Drilling Costs (IDC) tax deduction (see NGI, May 18).

"In many fields, the decline rate for gas wells means we have to maintain a constant level of new development; we can't afford to stand still," he said. "So when [COGA Board Chairman] Don McClure explained the harm that would come from repealing the federal IDC deduction, I urged Congress, in written form, to leave that deduction intact." McClure is a vice president at EnCana Corp., which is one of Colorado's top gas producers.

"Also at the federal level there's been a great deal of discussion about the regulation of hydraulic fracturing, which you know is essential to the development of Colorado gas resources," he said. Congress is now considering whether to more stringently regulate hydraulic fracturing (see NGI, June 29), but "Colorado rules are an excellent example of how states can and should act."

Not attempting to "discount the concerns of those who worry about protection of drinking water supplies," Ritter said he believes "that we have to understand the problems and the risks before we act." The governor said he "encouraged" Colorado Rep. Diana DeGette "to consider authorizing a comprehensive study" of hydraulic fracturing "instead of going directly to a new and potentially intrusive regulatory program."

DeGette is one of the sponsors of the Fracking Responsibility and Awareness of Chemicals (FRAC) Act, which would reinstate regulating hydraulic fracturing under the federal Safe Drinking Water Act of 1974 (see NGI, June 15).

"I had a good conversation with the congresswoman, and we talked about what we had done with respect to the rules and what her amendment was likely to do in terms of trying to have a one-size-fits-all approach," Ritter said. "We believe we addressed it, [that] the states should address this issue one state at a time, and she agreed at that time to go instead to something that would be more in the way of a study instead of an amendment that would prescribe a certain way of every state having to put in place these rules. I thank the congresswoman for having done that."

DeGette spokesman Kristofer Eisenla told NGI Friday that Ritter had spoken with the congresswoman, but said the legislation remains one of the options. DeGette "welcomes the industry's input" to develop a study, said Eisenla. "But no options are off the table."

In his 15-minute speech Ritter urged the energy industry to consider working with him and his staff "as a close-knit team" to build Colorado's future.

"Low carbon natural gas can be a big part of the national strategy for addressing climate change while securing our economic future," he said. "And if you're going to...meet energy demands, then natural gas is one of the ways -- and one of the of the most significant ways -- that we can get to this place of a clean energy future and, at the same time, use American resources to do it."

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