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Proposed Colorado Anti-Oil/NatGas Measures Fail to Qualify for Ballot

In a major victory for the oil/natural gas industry and general business sector in Colorado Monday, two proposals (Initiatives 75 and 78) viewed as onerous for natural resources development were rejected for the November ballot for lack of enough valid voter support.

The Colorado Secretary of State's office declared that the measures’ backers failed to submit enough valid voter signatures. That set off a large sigh of relief from the Colorado Oil and Gas Association (COGA), other pro-industry organizations, and business leaders statewide who had actively worked against the proposed measures.

No. 75 would have added a constitutional amendment to 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 have changed setback rules and require new oil and gas development facilities to be at least 2,500 feet from the nearest occupied structure or other specified or locally designated area. The current requirement is 1,000 feet.

Nos. 75 and 78 garnered 107,232 and 106,626 signatures, respectively, but after the verification process from a random sample, the Secretary of State's office determined that neither measure was going to reach the required threshold of 98,492 certified signatures, said David Tameron, a senior analyst at Wells Fargo Securities LLC.

Earlier this month, an oil/natural gas industry-backed measure to make it more difficult to amend Colorado's state constitution qualified for the November ballot with support from Gov. John Hickenlooper (see Daily GPI, Aug. 18).

"Raise the Bar" (Initiative No. 96) is a proposal from the business sector to make it harder for activists to amend the state constitution through ballot measures, requiring that petitions for citizen-initiated constitutional amendments be signed by at least 2% of registered electors in each of the 35 state Senate districts.

Last week, Hickenlooper criticized efforts by environmental groups to derail oil and natural gas development in the state and predicted the two potential amendments to the constitution wouldn’t make the November ballot (see Shale Daily, Aug. 26). Industry and business groups were predicting that even if the measures made the ballot that voters would reject them, and said the lack of valid voter signatures validated that prediction.

Hickenlooper said his state has one of the strongest regulatory approaches in the nation, tied mostly to "strong local decision-making and regulatory processes." He said that while the initiatives didn't get on the ballot, thousands of citizens signed them, so "it's important that we work with the oil/gas industry and build lines of communications with all sides."

"Colorado voters recognized that these extreme measures would destroy the state's economy and take away private property rights," said Karen Crummy, a leader in Protecting Colorado's Economy, a strong opponent of the proposed ballot measures. "The voters read the petitions and declined to sign."

"The legislature, the courts, and now the people of Colorado have all weighed in to say enough is enough," said Bob Golden, president of the south metro chapter of the Denver Chamber of Commerce, and a board member of the pro-business activist group Vital for Colorado.

Jason Wangler, at Wunderlich Securities Inc. in Houston, said that while equity researchers and others did not expect the measures to qualify for the ballot, Monday's news "is a positive in that it removes a potential overhang in operations throughout the state." Both initiatives fell "well short" of qualifying for the ballot, Wangler said.

COGA CEO Dan Haley declared that the "cycle of constant campaigning and political uncertainty is over," that the state's citizens have "sent a clear message that they don't want to resolve these complex issues at the ballot box."

Along the same line, the Colorado Petroleum Council also hailed the announcement, with its Executive Director Tracee Bentley calling the proposals short-sighted efforts that would have hurt the state's economy and the U.S. position as a global leader in oil/gas production. "Oil and gas companies have a long history of working collaboratively with local government and communities, and we will continue to do to," Bentley said.

From the start, Colorado's business community and oil/gas sector took seriously the possibility of the measures going to the voters, predicting that some proposals could eliminate 90% of land that is eligible for future energy production (see Shale Daily, June 7; Dec. 24, 2015).

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