Mountain States

Here We Go Again…Ban-Fracking Activists Claim Their Efforts Are Not A Ban

Remember when proponents of Proposition 112 seized on a School of Mines two-page document as proof that their measure was not a ban on fracking in the state? We do, that was just last week. Upon further review, faculty from the School of Mines provided further information debunking the original report. But before the two page document was fully reviewed, the media was all too willing to run with the story.

Well, here we go again.

This time Proposition 112 supporters have seized on to an analysis just published by an energy research firm based in Calgary, Alberta, Canada. Proponents sent this new analysis to 9News and 9News ran with it.

In the set up for the piece, 9News anchor Kyle Clark leads into the story saying, “The oil and gas industry has painted 112 as a nightmare scenario, a de facto ban on new oil and gas development. The industry knows it is not that dire because they have seen the report that was leaked to our politics guy Marshall Zelinger.”

Now, we know it’s been a long campaign season and Election Day is within sight. Activists are desperate, and journalists are looking for a good gotcha moment. But pumping this single analysis note up as a smoking gun is simply far-fetched.

Let’s take a look at the full story here.

First, a Bit About What the Analysis Says and Doesn’t Say

As we pointed out last night on Twitter, the analysis itself warns: “Such information is provided with the expectation that it will be read as part of a mosaic of analysis and should not be relied upon on a stand-alone basis.”

Dig a little deeper and the analysis even says “no representation or warranty, express or implied is made … as to the accuracy or completeness of the information.”

Those that went online and read Zelinger’s actual written story last night see why. Here is what the authors of the analysis told 9News:

“Some additional things to consider that are relevant that our report did not address were the proposed restrictions for flow/gathering lines, competition for surface rights and the complexity with having thousands of existing wells. When considered, the accessible mineral rights would be lower than the 61 percent/43 percent stated above,” the report authors cautioned.

Ethan Bellamy, an energy analyst for RW Baird, a financial services firm, Tweeted a series of responses.

“Report date: 10/24/18. Entire report hinges on one assumption: ‘Assuming operators can drill out 10,000 fee from allowed surface locations. @PetroValues work would imply that’s not technically feasible. They assess 38,000 wells that would be obviated by Prop 112. See their blog,” Bellamy Tweeted.

“I read the report and we just did a call with PetroValues and clients. Main point: this is a highly technical assessment that requires mountains of data. If you look at the PetroValues website, you can tell they do a bottom up analysis by wellbore,” Bellamy added.

Bellamy cautioned against using the report as the final word on the issue.

“I don’t expect any of this to change anyone’s mind. But if you’re looking at the RSEG report as dispositive, it’s not. It’s just one of many analyses, and it just so happens to show a less onerous view of 112’s impacts,” Bellamy wrote.

This gets to the heart of what we previously saw from the School of Mines debunk last week.

Dr. Will Fleckenstein and Dr. Jennifer Miskimins – senior academics at the School of Mines and two of the state’s top experts in petroleum engineering – released a paper showing that efforts to minimize the impacts of Proposition 112 are “not true” and “misleading.” They further wrote:

“Regardless of how far you can horizontally drill, the subsurface still can’t be accessed in the most important areas, since you still have to have a surface area to drill from. Additionally, there is a technical and efficient limit as to how far horizontal wells can actually be drilled. The surface access is the key . . .

“The drilling engineers can move that surface location some distance from the ‘perfect’ surface location, but the surface access has to be close to where the horizontal well starts. It is that lack of surface access, regardless of the length of the horizontal well, that will cause Colorado’s oil production to quickly drop, along with the associated revenues.”

Industry Knows It’s Not Dire Because They Have Seen the Report?

The RS Energy Group analysis is dated from just last week—October 24th. That’s right, its less than a week old. This one theoretical analysis that the report’s own authors say is not full and complete is not at all being hidden away by the industry. Rather, its looked at just the way that the authors of the report intended – one more bit of information to be considered, but one that is, as the report’s author’s admit, is incomplete.

And consider the response from the Colorado Oil and Gas Association, which points to many other analysis factors that the state’s oil and gas regulators, the Colorado Oil and Gas Conservation Commission, as well as the companies themselves, must consider in approaching drilling under the current setback standards.

“The COGCC is Colorado’s oil and natural gas regulatory body, and they conducted their own analysis of Proposition 112. Other, theoretical analysis based on broad developmental assumptions is risky, because that analysis can speculate about outcomes that may not be true or even possible,” said COGA President Dan Haley.

“I can tell you this, when it comes down to it, the COGCC is the entity issuing permits, so their perspective doesn’t just carry weight, it is the metric from which we must operate. According to the COGCC, in order to determine mineral access, extraction, and production, you have to include geology, drilling methods, reservoir analysis, production engineering, mineral leases, surface use agreements, land use, and economics to provide a true sense of whether or not a location can be drilled. That is a long list of inputs that have to be well understood before knowing if drilling is even possible. It is not a list of theoretical assumptions or hypotheticals,” Haley added.

In its segment, 9News failed to acknowledge the earlier reports, either from COGCC or the conflicting Colorado School of Mines studies. In addition, the report ignored the School of Mines-reviewed study on economic impacts.

And Please Don’t Forget, Proposition 112 Is Supported by Those That Do Want to Ban Oil and Gas

Perhaps the greatest irony is that proponents of Proposition 112 actually do want to ban fracking.

As we have noted, national “Keep It In the Ground” celebrities Josh Fox, Bill McKibben, and Sandra Steingraber have dropped into Colorado to promote Proposition 112.

Now U.S. Sen. Bernie Sanders, who wants a “total ban on fracking,” has endorsed the setback measure.

“Given the crisis we face with climate change, in my view we should move toward a total ban on fracking. At a minimum, it seems obvious that we must protect communities from the environmental damage that fracking causes. In my view Colorado voters should support 112,” he Tweeted over the weekend.

And just yesterday, Al Gore weighed in on Proposition 112, endorsing the setback’s “climate justice” approach.

“I urge Colorado voters to vote #YesOn112 to protect homes, schools, playgrounds and other vulnerable areas from fracking. As oil & gas spends millions to fight this, your citizen-led campaign can protect Coloradans and make climate justice history!” Gore Tweeted.

Even former Democratic Gov. Bill Ritter, who inaugurated the state’s “New Energy Economy” and is a clear advocate for renewables, sees Proposition 112 as a ruse for “‘keep it in the ground’ folks.”

“The 2,500 foot setback was arrived at in a very non-Colorado way, set without dialogue or debate, by a group of advocates who, although perhaps well-intentioned, want to see oil and gas development seriously curtailed, and perhaps even halted, in Colorado,” Ritter wrote in an op-ed opposing the measure earlier this month.

But it’s not just national folks that have called for fracking bans—it’s the supporters and backers of Proposition 112 themselves:

Colorado Rising Board Member Lauren Petrie has said, “Ban fracking everywhere.”

Colorado Rising’s attorney and spokesman, State Rep. Joe Salazar said oil and gas has no place in the state. “The oil and gas industry needs to be looked at as an immoral industry … It has no business here in the state of Colorado. Our state will be fine without them,” Salazar said.

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