By Sabrina Wong
Last Wednesday, the Colorado state legislature approved and passed major oil and gas procurement reforms. The calls for reform stemmed from heightened public concern for increasing levels of drilling and fracking activity posing as a major threat to health, safety, and the environment.
This issue is a highly politicized and hotly debated topic between Democratic constituents, a demographic that tends to live in more suburban and urban areas, and Republican constituents, a group that largely lives in rural areas. Democrats were concerned that oil drilling and fracking were moving too close for comfort to residential areas and schools, referencing health hazards and noise complaints. Republicans fired back citing that oil and gas wells were becoming a major source of income, keeping farms that were struggling financially afloat.
The new bill will give municipalities the authority to regulate and restrict where new wells can be built, in contrast with the current law, which allows only state regulators to exercise that power. In addition, Proposition 112, another part of the regulation package, states that new drilling sites and production facilities must be more than 2,500 feet away from “vulnerable” areas like homes, schools, and hospitals, closing off 54% of Colorado land to oil companies who hope to profit off the land.
Furthermore, the Colorado Oil and Gas Conservation Commission’s mission statement has changed, with a new focus on public health, safety, and environmental consciousness rather than output maximization. These reforms are a complete deviation from other major US oil states like New Mexico and Texas, where local governments are barred from imposing restrictions on oil and gas companies. Thus, as the fifth-largest oil producer in the United States, Colorado is a pioneer in this health- and environment-focused reform.
The Colorado oil and gas industry accounts for $32 billion of the state's GDP and contributes to 89,000 jobs. The effects of the reform are not entirely obvious; however, industry experts agree that the new laws will raise the cost of oil and gas extraction in the state, which may squeeze energy companies. It may even cause these companies to leave Colorado altogether for other states with more lenient laws. Analysts predict that Proposition 112 could cause production could drop 55% by 2023. Oil and energy production reform in Colorado is giving life to a larger national debate over the extent to which health, safety, and the environment should be compromised for economic gains. It is unclear whether reform in Colorado will set an example for other states or on the greater national level moving forward.