Colorado voters could limit oil drilling
BP’s new U.S. onshore oil headquarters in Denver serves as a testament to Colorado’s regal mountains, its expansive forests, its nature-loving culture.
Aspen trees line the BP club room, newly installed beer taps await local craft brews, multiple stone fireplaces invite cozy discussions about ski conditions, and a 52-foot pine tree, sliced in half, serves as a conference table.
Whether Coloradans want the tribute is another matter.
On Nov. 6, voters may spoil BP’s welcome. That’s when Colorado decides whether to limit drilling in an initiative that has drawn almost $39 million in campaign finance contributions. If passed, the proposition would cut the state’s oil output by more than half and, perhaps, act as a potential blueprint for blocking development elsewhere.
BP moved its office from Houston weeks before the proposition hit the ballot. Colorado has been drawing drillers whose interest has been piqued by production that’s climbed tenfold since 2001 to a record 450,000 barrels a day in April. Along with Noble Energy Inc., Anadarko Petroleum Corp. and others, BP is now in the midst of a multimillion-dollar war over the state’s environmental future.
“The long-term impact is quite significant,” said Matt Andre, an energy analyst at S&P Global Platts. “It’s about the precedent being set, and it working its way to other states.”
At issue is Proposition 112, which requires that new drilling sites, processing plants and gathering lines be more than 2,500 feet from homes, schools and other “vulnerable” areas. In effect, it makes 54 percent of surface land inaccessible to producers.
If the measure passes, production could fall 55 percent by 2023, according to an S&P analysis. But Andre sees that as just a bestcase scenario: “It assumes that people who can drill will drill,” he said. “But you have to imagine that some people will move to other plays.”
The stakes are extraordinarily high. By July, Colorado overtook Alaska to become the nation’s sixth-largest oil producer.