COGCC report: Initiative 97 would make 85% of non-federal land in Colorado off limits to oil and gas

Ballot proposal would implement 2,500-foot setback
Posted at 4:49 PM, Jul 10, 2018
and last updated 2018-07-10 18:49:05-04

DENVER – A proposed ballot initiative that could go on November’s ballot if proponents gather enough valid signatures would, if passed, make 85 percent of Colorado’s non-federal land off limits for new oil and gas development, according to a study released last week by the state’s oil and gas regulatory commission.

The Colorado Oil and Gas Conservation Commission (COGCC) released the study July 2. It looks at some of the potential impacts that would be caused by the passage of Initiative 97, for which proponents have until early August to gather nearly 100,000 verified signatures in order to certify the measure for November.

The initiative would modify Colorado Revised Statutes to put a 2,500-foot setback in place for new oil and gas development in regards to “occupied structures” and “vulnerable areas” that include many public spaces and waterways.

It is similar to an initiative that was proposed in 2016 but failed to make the ballot, but Initiative 97 differs in that in exempts federal land from the setback rules and allows local governments to designate specific “vulnerable areas.”

The initiative has drawn wide scrutiny from the oil and gas industry, which say the proposed setbacks go too far. Current rules only require new development to be 500 feet from existing homes. But proponents of Initiative 97 say the 2,500-foot setback is important to protect Coloradans from oil and gas development after a series of spills and explosions in recent years.

The new report from the COGCC, published July 2, analyzes how much land would be made unavailable to industry developers in Colorado should the initiative pass, but it doesn’t directly analyze how production might be affected or what the economic impact of the initiative would be.

The report says that 85 percent of non-federal land would be off limits to developers under the measure. And though its language specifies that the initiative would apply only to non-federal land, the new setback rules would theoretically apply to 54 percent of the state’s total land surface, the report says.

And in the state’s top-five producing counties (Weld, Garfield, La Plata, Rio Blanco and Las Animas), nearly 94 percent of the non-federal surface land would be unavailable for new production, the report says.

Further, the report says, the added “vulnerable areas” portion of the proposed initiative “would have a significantly larger impact than ‘occupied structure’ buffers on making surface lands inaccessible to new oil and gas activity.” It also says that much of the Front Range would be off-limits from new production because of the federal exemption.

“The proposed federal land exemption, which in Colorado would be an estimated 36% of the state’s total surface area, does keep land available for oil and gas development in western Colorado, but has little impact on lands east of the Rockies including in Weld County,” the report says.

Some of the address point data used to compile the report was unavailable for a handful of counties across the state—mostly in rural Colorado.

While the report does not address potential economic impacts, a study done by CU Boulder regarding the 2,500-foot setbacks under the proposed 2016 measure found that such setbacks would reduce the number of drilling locations in the state by 90 percent.

As such, according to the study, the state would suffer a $7.1 billion hit to its GDP over five years and a $14.5 billion hit over 15 years. The study says the state would see 54,000 fewer jobs over five years and 104,000 fewer over 15.

An industry report said that Initiative 97 would cost the state $26 billion in lawsuits, but the organization backing Initiative 97, Colorado Rising, called the report “high speculative” and “based completely on false assumptions.” Colorado Rising claimed at the time that the measure was polling at 69 percent statewide. But it's unclear where that number came from, and the industry is throwing money at defeating Initiative 97 and others.

But Republicans in Colorado have generally panned the proposal, and the four Democratic gubernatorial candidates who had been vying for the party’s nomination said at debates hosted by Denver7 that they wouldn’t support a 2,500-foot setback.

Democratic nominee Jared Polis, who has in the past supported setbacks of up to 2,000 feet, said he would support varying setbacks on a case-by-case basis.

Colorado Rising and other proponents have until Aug. 6 to gather 98,000 signatures in order for the measure to make it onto November’s ballot.