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Colorado Governor Predicting Loss For Local Control Initiatives to Limit Oil, NatGas Drilling

Colorado Gov. John Hickenlooper (D) on Thursday criticized efforts by environmental groups to derail oil and natural gas development in the state and predicted two potential amendments to the constitution won't make the November ballot.

Speaking on the final day of the annual Colorado Oil & Gas Association's Rocky Mountain Energy Summit in Denver, the governor said his "full assumption is that neither of those two initiatives are going to have the signatures" for the fall election.

The deadline to verify citizen-backed petitions for initiatives No. 75 and 78 is looming, and the Colorado Secretary of State's Office continued Friday to verify whether they meet the requirements to be on the Nov. 8 ballot (see Shale Daily, Aug. 23; June 7). No. 75 would allow local governments to regulate oil and gas development, as long as the rules were at least as stringent as those overseen by the Colorado Oil & Gas Conservation Commission. No. 78 would change setback rules and require any new oil and gas development facility to be at least 2,500 feet from the nearest occupied structure or other specified or locally designated area.

"I don't think either one is going to be on the ballot," the governor said. "I think that's a reflection of all the effort put in by both sides to sit and listen to each other and say, 'All right, how can we respect private property? How can we acknowledge that we're going to move toward a cleaner environment?'"

A geologist by trade who started his career working in the oil and gas industry, Hickenlooper has walked a fine line in support of energy development in the state. He was able to broker an agreement two years ago that squashed similar initiatives to allow more local control over oil and gas drilling (see Shale Daily, Aug. 5, 2014). The statewide oil and gas task force he helmed in 2014 and 2015, which brought together disparate interests, cobbled agreements that gave local governments more opportunities to work on energy development, among other things (see Shale Daily, Jan. 26).

Environmental groups criticized the task force recommendations, which led to the ballot initiatives. However, Hickenlooper said the concerns were overblown. The green group's efforts to impose a 2,500-foot setback for new oil and gas facilities, which includes homes, schools, streams, lakes and areas of special concern, would end any new energy development in the state, he warned.

"Oftentimes, the emotion of the moment sweeps people away from worrying about some things like private property," he told the audience. Private property and mineral rights owners would be barred from leasing or developing their land -- and the state could be on the hook for compensating them if that were to happen.

"This isn't China," said the governor. "This isn't Russia. We don't take people's private property without compensating them."

Earlier on Thursday Colorado Sen. Cory Gardner (R) also addressed the summit. The debate over banning oil and gas unconventional drilling, particularly fracturing (fracking), represents an "existential threat" to Colorado, he told the audience.

"This debate that's taking place in Colorado right now, about whether or not we should ban fracking, is an existential threat that we have to kill and we have to stop," Gardner said. "But unfortunately, it's not just a debate that's taking place in Colorado."

The senator poked at positions about energy development, or lack thereof, that he said have been taken by Democratic presidential nominee Hillary Clinton but not GOP nominee Donald Trump, whom he supports. He cited the new U.S. Chamber of Commerce report that warned the country could lose jobs and billions in royalties if a ban were to be imposed limiting federal oil and gas production (see Shale Daily, Aug. 25). Gardner claimed that Clinton supports the "Keep it in the Ground" movement, but she has never publicly endorsed the movement, nor has the Obama administration.

"Think about what that means to jobs in this state. I grew up in a little town with 3,000 people. Thanks to the natural gas industry, we have a third stop light in that little town. We had two. Now we have three."

When natural gas development began to expand, Gardner said his former high school classmates "started moving back...People who graduated from high school and college were returning to that small town, were staying in that small town."

Candidates who oppose fossil fuel production on federal land are "not fit" to hold office, he told the audience. "We have leaders who are saying irresponsible things, like we will have no more production on public lands...It's irresponsible, and I think anybody who refuses to reject statements like that are not fit for statewide office in Colorado and are not fit for federal office in Washington, DC."

Hickenlooper also commented on reports that he may draft an executive order to require a 35% reduction by 2030 in carbon emissions from the power sector from 2012 levels.

"An executive order is an executive order," which is not binding, the governor said. "You still have to go through rulemaking...through legislation. There’s a process around that."

With energy sector innovations, "we can...have cleaner air, clean water and not penalize natural gas. We can find ways to have cleaner energy and be less expensive. The appropriate role of government is not beat industry into submission...but to lay out some goals."

Some environmental groups are welcoming the potential draft order, Mitigating and Adapting to Climate Change. The groups claim that that the United Nations mandate issued in Paris last December required more aggressive global reductions in carbon emissions to combat global warming.

"We're not trying to box anyone in," Hickenlooper said. "We think we can be more ambitious. But cost matters."

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