Oil in Colorado’s po­lit­i­cal ma­chine

The drilling in­dus­try spends tens of mil­lions of dol­lars to in­flu­ence opin­ions and cam­paigns.

The Denver Post - - FRONT PAGE - By Christo­pher N. Osher

The oil and gas in­dus­try in the past four years has poured more than $80 mil­lion into Colorado to shape pub­lic opin­ion and in­flu­ence cam­paigns and bal­lot ini­tia­tives, cre­at­ing a po­lit­i­cal force that has had broad im­pli­ca­tions through­out the state.

En­vi­ron­men­tal­ists and in­dus­try of­fi­cials alike call the ef­fort one of the best-fi­nanced operations ad­vo­cat­ing for drilling in any state. Just two months ago, that po­lit­i­cal mus­cle came into play when the in­dus­try suc­cess­fully lob­bied Repub­li­can leg­is­la­tors to kill leg­is­la­tion tight­en­ing reg­u­la­tion in the wake of a fa­tal home ex­plo­sion in Fire­stone that in­ves­ti­ga­tors have blamed on a sev­ered gas pipe­line.

En­ergy in­ter­ests also have helped elect lo­cal city coun­cil can­di­dates more fa­vor­able to al­low­ing drilling near hous­ing and blunted ef­forts across the Front Range to re­strict drilling rights. Last year, in­dus­try forces played a role in keep­ing the state Se­nate in Repub­li­can hands. They spent heav­ily last year to con­vince vot­ers across the state to make it harder to amend the state con­sti­tu­tion, deal­ing a blow to an­tifrack­ing ac­tivists’ hopes to cur­tail drilling through a statewide bal­lot ini­tia­tive.

The new ap­proach has been broad, sus­tained and ef­fec­tive in its reach, ac­cord­ing to in­ter­views and a review of in­dus­try doc­u­ments, cam­paign-fi­nance records and pub­lic re­marks by an in­dus­try con­sul­tant who helped de­velop the strat­egy.

De­tails of the ef­forts in Colorado were dis­closed by Mark Truax, a po­lit­i­cal con­sul­tant work­ing for the state’s top drilling com­pa­nies, dur­ing a speech to in­dus­try play­ers in 2015. In two years, Truax said, the in­dus­try had knocked on 1.7 mil­lion doors in Colorado. It had pro­filed more than 3.9 mil­lion vot­ers and flooded the air­waves, in­ter­net and mail­boxes with tar­geted mes­sages to Coloradans rang­ing from Democrats re­cep­tive to Pres­i­dent Barack Obama’s sup­port of nat­u­ral gas to hunters and an­glers in­ter­ested in wildlife restora­tion.

Oil and gas in­ter­ests mo­bi­lized af­ter end­ing up on the los­ing side of lo­cal bal­lot is­sues in 2012 and 2013 seek­ing to re­strict drilling and af­ter re­al­iz­ing that en­vi­ron­men­tal­ists, such as bil­lion­aire Tom Steyer, were tar­get­ing Colorado. Steyer, founder of the po­lit­i­cal ad­vo­cacy group Nextgen Cli­mate, in 2014 paid for tele­vi­sion ads and can­vass­ing operations for then-u.s. Sen. Mark Udall’s los­ing cam­paign against Cory Gard­ner. This year, when Steyer an­nounced he was putting up at least $25 mil­lion to mo­bi­lize vot­ers in bat­tle­ground states, he pledged re­sources would be de­voted to Colorado.

“The old ap­proach wasn’t work­ing any­more,” said Chris Castil­ian, a for­mer di­rec­tor of gov­ern­ment af­fairs for Anadarko Pe­tro­leum who helped put to­gether the in­dus­try blue­print for fight­ing back. “Ev­ery time we saw a bal­lot mea­sure at the state or lo­cal level we would get a group of in­dus­try rep­re­sen­ta­tives to­gether, and we would gather around a cam­paign ta­ble and hire a cam­paign man­ager and put up TV ads.”

The strat­egy was re­ac­tive and un­der­funded, Castil­ian said, and it showed in the re­sults.

Cam­paign-fi­nance re­ports filed by en­ergy com­pa­nies show that in 2012 they spent $455,000 on cor­po­rate po­lit­i­cal con­tri­bu­tions in Colorado, mostly in a dif­fuse man­ner. From 2013 through 2016, they have poured an av­er­age of more than $20 mil­lion an­nu­ally into fi­nanc­ing Colorado po­lit­i­cal cam­paigns for politi­cians and bal­lot is­sues as well as a new, un­prece­dented pub­lic re­la­tions ef­fort aimed at mold­ing pub­lic opin­ion — a to­tal in ex­cess of $80 mil­lion.

To come up with the num­bers, The Den­ver Post re­viewed cam­paign fi­nance con­tri­bu­tion and ex­pen­di­ture re­ports from the Colorado Sec­re­tary of State’s Of­fice from 2012 to 2016, an­nual po­lit­i­cal ac­tiv­ity re­ports pub­lished by the state’s largest drilling com­pa­nies, 990 non­profit tax re­turns for in­dus­try groups and con­tri­bu­tions to is­sue com­mit­tees linked to in­dus­try.

Go­ing back to 2012

In 2012, vot­ers in Long­mont turned out in force to ban frack­ing in their com­mu­nity. The same year, the fifth-rich­est mem­ber of Congress, Jared Po­lis, a Demo­crat from Boul­der, be­gan tak­ing a per­sonal in­ter­est.

“This can hap­pen to any­body. It can hap­pen to you. It can hap­pen to your neigh­bor. It can hap­pen to your con­gress­man,” Po­lis said in an in­ter­view af­ter he filed a law­suit seek­ing to stop a frack­ing op­er­a­tion that had set up across the street from his 50-acre get­away in Weld County. “The laws in Colorado are out­ra­geously out of touch in terms of pro­tect­ing prop­erty.”

With at least four other Front Range mu­nic­i­pal­i­ties push­ing anti-frack­ing bal­lot ini­tia­tives in 2013 and Po­lis ar­gu­ing for a statewide ini­tia­tive for fur­ther restrictions, top en­ergy pro­duc­ers in the state crafted plans to fight back.

Anadarko Pe­tro­leum and No­ble En­ergy, the top en­ergy pro­duc­ers in the state, lead the way. Their cam­paign-fi­nance records and po­lit­i­cal ac­tiv­ity re­ports shows that since 2012, the com­pa­nies are re­spon­si­ble for two-thirds of the money given to an in­dus­try po­lit­i­cal is­sue com­mit­tee known as Pro­tect Colorado, which has spent $30 mil­lion since 2013 on bal­lot ini­tia­tives and is­sues.

A pub­lic re­la­tions front group founded by the two com­pa­nies in 2013 — Coloradans for Re­spon­si­ble En­ergy De­vel­op­ment — also re­ceived more than $30 mil­lion in do­na­tions in its first three years of ex­is­tence, ac­cord­ing to its tax re­turns.

“Scar­ing peo­ple is easy and cheap. Pro­vid­ing fac­tual in­for­ma­tion on a com­plex sub­ject is dif­fi­cult and ex­pen­sive,” CRED and Pro­tect Colorado spokes­woman Karen Crummy said in a pre­pared state­ment. CRED was cre­ated as an “ed­u­ca­tion ef­fort to present the pub­lic with the sci­ence and facts on frack­ing,” she said.

Crummy added that “Pro­tect Colorado was formed when the en­ergy in­dus­try was fac­ing an on­slaught of bal­lot mea­sures and the very deep pock­ets of one Colorado Con­gress­man who had hun­dreds of mil­lions of dol­lars. These mea­sures had the po­ten­tial to put the in­dus­try out of busi­ness so we had to fight back.”

Driv­ing the mes­sage for CRED is Ore­gon-based po­lit­i­cal con­sult­ing firm Pac/west Com­mu­ni­ca­tions, which promised in­dus­try rep­re­sen­ta­tives more than just an ag­gres­sive fight at the bal­lot box. The firm, Castil­ian said, pledged when bid­ding for the job to work tire­lessly to change the “hearts and minds of Coloradans.”

The in­dus­try helped shape the po­lit­i­cal makeup of city coun­cils in Den­ver and Fort Collins and suc­cess­fully de­feated or headed off anti-frack­ing ini­tia­tives in Erie, Wind­sor and Love­land that cropped up af­ter 2014, Truax, now a vice pres­i­dent at Pac/west, said in his speech.

By 2015, the in­dus­try in Colorado could mo­bi­lize as many as 400 can­vassers to de­scend on small towns across the Front Range in as lit­tle as 24 hours’ no­tice, Truax told at­ten­dees at an In­ter­state Oil and Gas Com­pact Com­mis­sion conference in Ok­la­homa City. He and other con­sul­tants had com­piled a coali­tion of 40,000 peo­ple who could lobby against en­vi­ron­men­tal­ists and jam mu­nic­i­pal phone lines at a mo­ment’s no­tice.

Green­peace recorded Truax’s speech and pro­vided a copy of the record­ing to The Den­ver Post. A tran­script pre­vi­ously was pub­lished in Boul­der Weekly.

Truax de­scribed the po­lit­i­cal tools the team had amassed as giv­ing in­dus­try pur­chas­ing power sim­i­lar to a per­son who has the abil­ity to walk into a Sears and tell the floor man­ager, “I want one of ev­ery­thing and put it in the truck out in the park­ing lot.”

Losses pile up

The losses have piled up for en­vi­ron­men­tal­ists. Last fall, vot­ers ap­proved “Raise the Bar,” a mea­sure mak­ing it more dif­fi­cult — some say nearly im­pos­si­ble — to place con­sti­tu­tional amend­ments on the state bal­lot. The oil and gas in­dus­try spent at least $4.3 mil­lion, ac­cord­ing to state cam­paign fi­nance records for a com­mit­tee formed to back the mea­sure.

Hopes to place restrictions on frack­ing through a con­sti­tu­tional amend­ment suf­fered a ma­jor set­back. “We saw it as very un­prece­dented as we watched it un­fold in Colorado,” said Jesse Coleman, a re­searcher for Green­peace.

En­vi­ron­men­tal groups this year failed to get bills op­posed by the in­dus­try out of the state Se­nate, which Anadarko and No­ble helped last year keep in Repub­li­can hands by pour­ing nearly $1 mil­lion into po­lit­i­cal groups that paid heav­ily for mail­ers at­tack­ing Demo­cratic can­di­dates.

Repub­li­cans in the House this year fil­i­bus­tered a bill that would have forced state reg­u­la­tors to map oil and gas pipe­lines through­out the state, a mea­sure Democrats pushed in the wake of the fa­tal home ex­plo­sion in Fire­stone in­ves­ti­ga­tors have blamed on a sev­ered Anadarko pipe­line. Another bill that would have barred oil drilling from within 1,000 feet of schools also died in the state Se­nate this year.

“You can’t miss all the ads and brochures in the doors, but how they ex­ert in­flu­ence so they can con­tinue to make profit is not as well known,” said state Sen. Matt Jones, a Demo­crat from Louisville. “The fact that they op­posed, even this year, af­ter the tragic Fire­stone deaths, any map­ping of pipes is be­yond the pale.”

Repub­li­cans said the map­ping leg­is­la­tion posed an un­nec­es­sary bur­den on the in­dus­try and would usurp the author­ity of state reg­u­la­tors, who they con­tended are bet­ter able than politi­cians to dis­cern the con­cerns of in­dus­try and the pub­lic. They also com­plained that the map­ping bill amounted to lit­tle more than grand­stand­ing by Democrats.

Lob­by­ist dis­clo­sure re­ports (first re­ported by the In­ter­na­tional Busi­ness Times) show that Anadarko lob­by­ists op­posed the map­ping leg­is­la­tion. The bill also drew op­po­si­tion from other en­ergy com­pa­nies and pro­fes­sional as­so­ci­a­tions. Lob­by­ists for No­ble sought to amend the bill, the dis­clo­sure re­ports show.

Cam­paign fi­nance records show Anadarko gave $510,000 to the Colorado Eco­nomic Lead­er­ship Fund, which spent nearly $711,000, mostly on help­ing Repub­li­can se­nate can­di­dates. Records show that fund spent more than $430,000 to help just two GOP can­di­dates win their elec­tions: Sen. Kevin Pri­ola of Hen­der­son and Sen. Jack Tate of Cen­ten­nial.

No­ble En­ergy last year gave $250,000 to Concerned Cit­i­zens for Colorado, which gave $380,000 to a Repub­li­can group that spent heav­ily in leg­isla­tive races. That Repub­li­can group, Colorado Cit­i­zens for Ac­count­able Gov­ern­ment, spent nearly $700,000 op­pos­ing Demo­cratic state se­nate can­di­date Rachel Zen­zinger of Ar­vada. Zen­zinger, buoyed by $150,000 in spend­ing on her be­half from the ad­vo­cacy group Amer­i­can Wind Ac­tion of Colorado, ended up win­ning the elec­tion.

Game plan from log­ging

The Colorado Supreme Court even­tu­ally over­turned the frack­ing ban ap­proved by Long­mont vot­ers. Gov. John Hick­en­looper formed a task force to make rec­om­men­da­tions on oil and gas drilling is­sues, and Po­lis agreed to pull back on his ef­forts for statewide voter ini­tia­tives to reg­u­late the in­dus­try.

Castil­ian said that the push by Anadarko and No­ble to change course wasn’t met with uni­ver­sal ac­claim by other en­ergy com­pa­nies. He said nev­er­the­less the com­pa­nies were con­vinced they needed to take more direct con­trol for a sus­tained statewide mes­sage in­stead of con­tin­u­ing to re­act when lo­cal skir­mishes broke out. Castil­ian said he be­lieves the in­dus­try’s po­lit­i­cal and pub­lic re­la­tions op­er­a­tion in Colorado is among the best fi­nanced in the coun­try for en­ergy forces. Had the in­dus­try not re­sponded as it did, frack­ing likely would have been banned in Colorado, he said.

No­ble and Anadarko rep­re­sen­ta­tives in­ter­viewed about a dozen firms to han­dle in­dus­try mes­sag­ing be­fore set­tling on Pac/west, Castil­ian said. The com­pany had fought anti-log­ging ini­tia­tives that had em­broiled the north­west. In that fight, Pac/west, with the back­ing of money from tim­ber in­ter­ests, launched a statewide cam­paign in Ore­gon that used mail­ers and phone calls to ar­gue en­vi­ron­men­tal­ists and their lawyers were putting the lives of fire­fight­ers at risk, ac­cord­ing to news re­ports.

Other in­dus­tries have spent heav­ily on po­lit­i­cal is­sues in Colorado. For in­stance, Al­tria, which owns tobacco gi­ant Philip Mor­ris, put up $18 mil­lion last year to con­vince vot­ers not to raise tobacco taxes. A 2013 re­port by Colorado Ethics Watch on oil in­dus­try spend­ing on pol­i­tics noted that the health care in­dus­try spent more on lob­by­ing at the state legislature than all other in­dus­tries com­bined be­tween 2007 and 2012.

For oil and gas, the first no­tice that its new strat­egy was suc­ceed­ing in help­ing the in­dus­try re­claim its po­lit­i­cal mo­men­tum came in 2014 when it suc­ceeded in de­feat­ing a frack­ing mora­to­rium in Love­land by 400 votes. The spend­ing, and the wins, have kept rolling in.

The Amer­i­can Pe­tro­leum In­sti­tute also con­trib­uted $15 mil­lion last year to fight ef­forts by en­vi­ron­men­tal­ists to place on the statewide bal­lot mea­sures that would give com­mu­ni­ties the abil­ity to reg­u­late oil and gas de­vel­op­ment and re­quire 2,500-foot buf­fers be­tween oil and gas in­fra­struc­ture and homes, schools and hospi­tals. En­vi­ron­men­tal­ists, which faced a bar­rage of “de­cline to sign” ad­ver­tis­ing fi­nanced by the in­dus­try, failed to get enough sig­na­tures to get those two ini­tia­tives on the bal­lot.

The fight may only just be begin­ning, how­ever. Po­lis, the politi­cian in the state who has pushed for the most se­vere restrictions on the oil and gas in­dus­try, is run­ning for gov­er­nor in the 2018 elec­tion. His chances to win the Demo­cratic pri­mary im­proved last week as U.S. Rep. Ed Perl­mut­ter, D-ar­vada, dropped out of the race.

Chris Wright, chief ex­ec­u­tive of two Den­ver-based en­ergy com­pa­nies, called Po­lis’ en­try “a huge risk” to the oil and gas in­dus­try. And the deadly Fire­stone ex­plo­sion in April has reignited con­cerns over drilling’s prox­im­ity to com­mu­ni­ties, Wright added. “I think it’s a set­back, ab­so­lutely. It’s an ab­so­lute hu­man tragedy, peo­ple are dead,” he said.

The in­dus­try is aim­ing to con­vince the mid­dle swath of the elec­torate to sup­port the en­ergy in­dus­try, said Wright, who leads Lib­erty Oil­field Ser­vices and Lib­erty Re­sources. Wright thinks it’s pos­si­ble, as long as the in­dus­try doesn’t de­fault back to the stance from sev­eral years ago of keep­ing quiet and out of the pub­lic de­bate.

Al­ready, oth­ers are plan­ning to tug vot­ers in the other di­rec­tion.

“They knew what was at stake,” said Rick Rid­der, a po­lit­i­cal con­sul­tant with close ties to Po­lis. “They’ve got to stop a move­ment. You can throw mil­lions of dol­lars at in is­sue but when peo­ple die be­cause of your poli­cies and prac­tices, it doesn’t make a lot of dif­fer­ence. Peo­ple are still go­ing to be ac­tive against you.”

He­len H. Richard­son, The Den­ver Post

Longs Peak pro­vides the back­drop for a large Cre­stone Peak Re­sources drilling op­er­a­tion near Fred­er­ick. The fa­cil­ity is sur­rounded by large, noise-damp­en­ing walls. The oil and gas in­dus­try in the past four years has poured more than $80 mil­lion into Colorado to shape pub­lic opin­ion and in­flu­ence cam­paigns and bal­lot ini­tia­tives.

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