Ban-Fracking Initiatives Could Cost Colorado $11 Billion a Year in Lost GDP and 62,000 jobs
A newly released economic assessment commissioned by the Colorado Common Sense Policy Roundtable (CCSPR) and conducted by the Business Research Division at University of Colorado Leeds School of Business has found that the ballot initiatives currently being pushed by ban-fracking activists in Colorado could cost the state up to $11 billion in lost GDP a year and 62,000 jobs.
The economists modeled the impact of a 2,000 foot mandatory setback that would “curtail drilling locations by 25% to 50%,” and found:
“Given a 25% reduction in new production beginning in 2016, the economic consequence would result in a lower GDP by an average of $3 billion and 18,000 fewer jobs in the first five years, and a lower GDP by an average of $6 billion and 33,000 fewer jobs between 2015 and 2030.”
And the potential for a 50% loss in production would be even worse for the state’s economy. Also from the report:
“Given a 50% reduction in new production beginning in 2016, the economic consequence would result in a lower GDP by an average of $5 billion and 33,000 fewer jobs in the first five years, and a lower GDP by an average of $11 billion and 62,000 fewer jobs between 2015 and 2030. Real disposable personal income decreases by $3 billion on average in the first five years.” (emphasis added)
Therefore it’s not surprising that some of Colorado’s top business leaders have sounded the alarm about these extreme anti-fracking ballot measures. As Earl Wright, Common Sense Policy Roundtable (CSPR) Chairman highlighted in a press release announcing the findings:
“A setback of 2,000 feet would move Colorado’s economy in the wrong direction. It would have significant impact on reducing growth of jobs, and it is absolutely the wrong time to have a negative impact on our ability to fund schools and roads”
What’s more disconcerting is that the 2,000-foot setback the researchers looked at is actually more modest than any of the eight setback initiatives anti-fracking activists have proposed. As Mike Fitzgerald, President and CEO of Denver South Economic Development Partnership highlighted:
“If a 2,000-foot setback costs the state 62,000 jobs, then the effect of a 4,000 foot setback on our state’s economy would be significantly larger.”
The assessment also found that, along with a significant drop in state GDP and employment losses, the economic impact of a 2,000 foot setback would wreak havoc on the state’s budget. Also from the press release announcing the study:
“With the public revenue stream from the oil and gas industry totaling $1.2 billion in 2014, the impact on state revenue from a 2,000-foot setback could have significant impacts on state funding. The majority of that public revenue stream comes in the form of property taxes, personal income taxes, severance taxes, public land leases and royalties.”
Tom Clark, CEO of the Metro Denver Economic Development Corporation added:
“These setbacks could cost Colorado $214 million to $428 million in tax revenues every year.”
The initiatives making their way through the process are the work of activists with ties to several national ban-fracking organizations that formed Coloradans Resisting Extreme Energy Development (CREED). Not long after forming their latest campaign organization, the group announced a series of ballot initiatives, including the eight setback measures, targeting the oil and natural gas industry – and a statewide ban on hydraulic fracturing. CREED’s efforts are so extreme that the Greeley Tribune editorial board has compared the group’s actions of a “toddler” throwing a “temper tantrum.”
This recent report comes right on the heels of millionaire Boulder Congressman Jared Polis, D-Colo. hinting that he may revisit supporting one or more of the initiatives activists are pushing to ban fracking, and only sheds further light on the implications of national activist organizations that are targeting the state with their series of job-killing ballot initiatives. Alarmingly, the political agenda these groups are seeking to impose would not only threaten Colorado’s economy, but would have the effect of sidelining a significant portion of our nation’s energy reserves and employment.