A Colorado ballot initiative to increase setback requirements for oil and gas activity could cost the state 54,000 jobs and reduce its gross domestic product (GDP) by $7.1 billion over the first five years, according to a new study from the University of Colorado.
Over a 15-year period through 2031, the proposed 2,500-foot setback requirement would cost the state as many as 104,000 jobs and reduce GDP by $14.5 billion, according to the study. Personal income would decline by $10.9 billion from 2017 to 2031, while real disposable income would decline by $8.3 billion, the study found.
It was prepared by the university’s Business Research Division (BRD) on behalf of the Metro Denver Economic Development Corp., the Denver South Economic Development Partnership and the Common Sense Policy Roundtable.
The study looked at ballot Initiative No. 78, one of a number of oil and gas ballot initiatives currently proposed in Colorado (see Shale Daily, April 14). Under the initiative, all new oil and gas development would have to be set back 2,500 feet from any occupied structures or “areas of special concern,” which would include permanent and temporary waterways, public parks and other public spaces.
The industry has been taking ballot Initiative No. 78 -- which BRD calculates would eliminate 90% of Colorado’s land from future oil and gas development -- and the other oil- and gas-related initiatives seriously, even though they would face an uphill climb to get onto the ballot and secure voter approval (see Shale Daily, June 14).
“This study illustrates the dire effects of a full attack on an industry that has been historically vital to our state’s economy,” said Metro Denver Economic Development Corp. CEO Tom Clark. “Companies simply would not be able to operate here. This initiative, were it to pass, would usher in the probable demise of the oil and gas industry in Colorado.”
The BRD study used price forecasts and data from the Colorado Oil and Gas Conservation Commission, then applied economic modeling to estimate the impact of the setback initiative. The study also accounted for the recent impacts of declining commodity prices.
“We're glad the business community is united against these poorly thought out and extreme measures being pushed by outsiders. Both initiatives 75 [to allow local control of oil and gas development] and 78 are aimed at hurting oil and gas families and the industry, but as this new study clearly shows, they are also direct attacks on the state's economic well-being and on working people and families across Colorado,” Colorado Oil & Gas Association CEO Dan Haley said.
The study shows that the setback initiative “is not about protecting neighborhoods or homeowners, but simply about activists pushing an extreme agenda to end an industry that 5 million Coloradans rely on every day. It will put friends and neighbors out of work and put Colorado’s economy at risk. It's time to stand up for Colorado.”
Tudor, Pickering, Holt & Co. said last month that Initiative No. 78 could increase uncertainty for energy investors in the lead-up to the Aug. 8 deadline for measures seeking to get on Colorado’s ballot (see Shale Daily, June 14).