Oil and gas. Former Interior Secretary Ken Salazar doubts Initiative 97’s legality.
Former Interior secretary says proposal would harm the industry greatly
Former Interior Secretary Ken Salazar predicted the courts would throw out a ballot initiative to increase the setbacks on new oil and gas wells if it won a majority of votes in November.
“It is fundamentally unconstitutional,” Salazar said of Initiative 97, while addressing the State of Colorado Energy Luncheon hosted by the Colorado Petroleum Council in Denver on Thursday.
Initiative backers are trying to gather enough signatures before an Aug. 6 deadline to make the ballot. The measure would require new oil or gas wells be 2,500 feet or more away from homes, other buildings and bodies of water such as streams and lakes.
Drillers currently must keep a distance of 500 feet from homes and 1,000 feet from schools. Salazar, voicing an opinion he said other mainstream Democrats hold, said the measure would represent a “takings” and greatly harm the industry.
The Colorado Oil and Gas Conservation Commission estimates that the larger setback would eliminate 80 percent of the nonfederal land now available for drilling in Colorado, primarily in Weld County.
Another study from BTU Analytics in Lakewood estimates that of the remaining land that could be drilled in Weld County, only 27 percent would be economic at oil prices of $50 a barrel or lower. Weld County could effectively be tapped out by 2020.
The measure has the potential to cripple an industry that provides more than $31 billion a year in economic benefits in the state, including $434.7 million in property taxes, and supports nearly 233,000 jobs, according a study from the API.
Supporters of the initiative argue that wider setbacks are necessary to protect public health and the environment, especially as drilling activity approaches more heavily populated areas in the state. A home explosion that killed two people last year in Firestone due to gas escaping from a nearby well has raised public concerns.
David Bernhardt, U.S. deputy secretary of the Interior, and Jack Gerard, president and CEO of the American Petroleum Institute, joined Salazar on a panel that discussed several topics, including the administration’s trade policies, energy independence and a proposed restructuring at the Interior Department.
Gerard questioned administration trade policies, arguing that a 25 percent tariff on steel would cause the oil and gas industry great harm, given that German manufacturers provide much of the oil pipe used in the country.
Bernhardt talked about a proposal to reorganize the department’s various bureaus along the nation’s 12 major watersheds and locate more of its 70,000 employees closer to the areas they are responsible for.
Another topic was the opening of 18,000 acres near the Sand Dunes National Park for oil and gas development. Environmental groups argue the land is wilderness that deserves protection and is too close to the Dunes. But panelists said it is far enough removed and doesn’t pose a threat.
Bureau of Land Management officials earlier this month agreed to hold off on the lease auctions until after consulting with the Navajo Nation.
Noting a table full of Republican lawmakers in front of the stage, but no similar turnout of Democrats, Salazar urged the industry to do more to reach across the aisle. He also made a pitch for Jared Polis as governor in a crowd that skewed heavily Republican.
The Denver luncheon was the last public event on behalf of the API for Gerard, who is leaving after a 10-year run to take a senior leadership role with the Church of Jesus Christ of Latter-day Saints.