Measures’ big defeat a triumph for oil, gas industry

Energy companies won big Tuesday night, beating back a pair of ballot measures that would have severely restricted drilling in Colorado and imposed a carbon fee on refineries, power plants and other industrial faculties in Washington state.

The oil and gas industry poured millions of dollars into campaigns aimed at defeating the measures, which had the potential to cost energy companies billions of dollars. In addition, had the measures been approved, they well may have spurred environmentalists in other states to launch similar initiatives, analysts said.

“If either one of these had passed, it would have set a precedent and it would have encouraged similar efforts in different states,” said Pavel Molchanov, an energy analyst at Raymond James. “Because both of these referendums failed, it’s safe to say that the same approach of going to voters has received setbacks and probably will not be attempted in the immediate future.”

The initiatives were soundly defeated, with more that 56 percent voters in each state casting “no” ballots.

In Colorado, the stakes were potentially high for the oil and gas industry, which warned that tens of thousands of jobs and billions

of dollars of investments would be threatened if Proposition 112 passed.

The initiative would have prohibited drilling within about a half-mile of homes and businesses to protect residents and the environment from potentially harmful releases from oil and gas operations and production. It also would have blocked just about all drilling in the state.

John Cavitt, chief executive of Covenant Testing Technologies of Houston, said he and his team were confident going into the election but stayed up Tuesday night to watch the results from their office in Greeley, Colo., a hub of the state’s oil and gas industry.

Cavitt estimated he would have had to cut about half of his 400 workers in Colorado within six months had the voters approved the measure.

“We were certainly fearful of some worst-case scenarios, which is why we worked so hard to get information out to inform the voters,” said Cavitt, whose company does well testing and monitoring.

The campaign against Proposition 112, called Protect Colorado, spent nearly $38 million to defeat the measure. Anadarko Petroleum of The Woodlands and Noble Energy of Houston, which operate the most wells in the state, contributed at least $20 million, according to campaign finance records.

That spending compared to only $1 million spent by Colorado Rising for Health and Safety, the group that supported the proposition.

Anne Lee Foster of Colorado Rising said Wednesday that she was still getting her head around the loss.

“We don’t know exactly what the next steps are, but we will absolutely keep fighting,” she said. “We really don’t have the option to stop.”

In Washington state, the proposed carbon fee would have started at $15 per ton of carbon and raised billions of dollars that would have allowed for investments in renewable energy projects and helped communities deal with the effects of climate change. Carbon taxes or fees aim to provide an incentive for companies to reduce emissions of carbon dioxide, a greenhouse gas that is a leading contributor to climate change.

The campaign battle over Initiative 1631 cost nearly $45 million, with opponents outspending supporters 2-to-1. The oil and gas industry, including BP America and Phillips 66, both of Houston, and San Antonio refiners Valero Energy Corp. and Andeavor, which recently merged with Marathon Petroleum Corp., collectively spent more than $27 million battling the carbon fee measure.

Initiative 1631’s supporters spent nearly $15 million, with the backing of environmental advocacy groups such as The Nature Conservancy and the League of Conservation Voters.

With more votes to be counted, Nick Abraham, spokesman for the Yes on 1631 campaign, said his group hadn’t conceded the race as of Wednesday afternoon, despite a virtually insurmountable lead for opponents. But he added the fight for carbon pricing would go on regardless.

“Climate change is going nowhere, and neither are we,” he said.

Despite the defeat in Washington, some form of carbon pricing aimed at curbing greenhouse gases seems inevitable, said Aimee Curtright, a senior scientist at the think tank Rand Corp.

“That is honestly not an ‘if,’ but a ‘when,’ ” said Curtright, a senior scientist at Rand. “At some point, direct or indirect, there will be a market signal for greenhouse gases.”