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Colorado Energy Office Squeezed in Political Vise Despite Robust Economy

Even though the state’s economy is leading the nation, the Colorado Energy Office is facing a budget crisis tied to a partisan political fight in the legislature over its future role.

Various federal funding programs, including developing more natural gas transportation fueling stations, should keep the Energy Office operable past this fiscal year (FY) 2017 ending June 30, but options for longer term funding have not been announced by Gov. John Hickenlooper's office, lawmakers, or the Colorado Oil and Gas Association (COGA).

In a Tuesday meeting as part of a interim session, the legislature’s joint budget committee deadlocked 3-3 regarding a supplemental budget request from Hickenlooper for the energy office. Republicans wanted the office to adopt an "all-of-the-above" energy focus while Democrats wanted renewable energy resources to be the primary directive for the office.

Hickenlooper said he had hoped for a different result based on conversations he had earlier with state legislative leaders, as it “plays a vital role in promoting innovative production and efficient consumption practices for all energy resources.”

The office, he said, saves Colorado citizens millions in energy costs through low-income weatherization services, free energy audits and technical assistance to agricultural producers and commercial property owners. "We will continue to explore all options to fund this important work," Hickenlooper said.

COGA supported Hickenlooper's supplemental budget request, but with the stipulation that the office be refocused on an all-the-above approach as outlined in the Republican-backed state Senate bill 17-301.

Following Tuesday’s vote, “it’s uncertain what will happen," a COGA spokesperson told NGI on Wednesday. "We only know right now that conversations will continue.” Conservation activists are warning that the state could lose its "status as a clean energy leader" if the office is not funded.

The concerns have arisen as the state Office of Planning and Budgeting issued a quarterly economic and revenue forecast that showed Colorado's economy is on a "strong pace for growth," and clear signs it has recovered from the oil and gas downturn.

"Colorado reached two significant milestones this year --- the No. 1 economy in the country and the state's lowest unemployment on record," Hickenlooper said. "Our challenge now is maintaining this success."

The state’s general fund revenues were expected to increase at a rate of 6.7% for FY2018 after increasing 3.4% this year, according to the Colorado planning office.

COGA's spokesperson said the energy industry remains "a critical portion of the state's economy," and in May the unemployment rate held steady at 2.3%, the nation's lowest for a third consecutive month.

Statewide statistics in the Resource Rich Colorado guidebook noted there are 44,370 direct fossil fuel workers in the state, which support 118,200 indirect jobs. Together, they amount to an annual economic impact of $10.3 billion. The entire energy sector represents nearly 10% of the state's gross domestic product at $25.6 billion currently, the statistics indicated.

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