The Colorado Oil and Gas Conservation Commission (COGCC) has adopted a mill levy rate increase in order to balance its budget amid revenue shortfalls caused by the Covid-19 pandemic and subsequent downturn in commodity pricing.
Mill levies, the regulator’s main source of revenue, are property taxes whose rates are expressed in mills, which are equal to $1/$1,000 of assessed value.
The increase to 1.5 from 1.1 mills “will help to provide long-term stability for COGCC in a volatile market environment,” the regulator said Tuesday. “Due to market conditions, the new mill levy increase, coupled with reduced spending, allows COGCC to balance its finances and provide long-term sustainability.
“COGCC will monitor production and pricing to accommodate any changes in the marketplace.”
Director Julie Murphy said diverse stakeholders provided input on the decision, highlighting that the originally proposed increase to 1.7 mills was reduced to 1.5 mills.
“COGCC must be good stewards of its finances — both revenues and spending, as local governments and neighborhoods count on us for environmental and public health protections, and operators depend upon us to review permits,” said Chairman Jeff Robbins.
“The mill levy change and reduced COGCC spending will allow us to continue to provide services that are protective of public health, safety, welfare, wildlife resources and the environment as we continue to implement SB 19-181,” he added, a reference to Senate Bill 181, which strengthened environmental oversight of oil and gas activity in the state.
In related news, the Denver District Court last week dismissed a lawsuit filed by the Weld County Board of County Commissioners challenging oil and gas methane and air pollution rules adopted by the Colorado Air Quality Control Commission last November under the framework of SB 181.
“In the midst of a viral respiratory pandemic, this decision will help keep our air clean and provides a welcome sight of relief,” said the Environmental Defense Fund’s Dan Grossman, senior director of state advocacy.
A similar lawsuit against the rules filed by a coalition of rural counties led by Garfield County is still pending before the same court.
Colorado’s oil production grew nearly six-fold from 2009 to 2019, mainly because of the advent of horizontal drilling and hydraulic fracturing, according to the Energy Information Administration.
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