Mountain States

New Legislative Committee Highlights Major Benefits of Shale Development to Colorado’s Economy

The benefits of shale development will to be a hot topic when the Colorado state legislative session convenes in January, as legislative leaders have just announced that they’ve have formed a new committee solely focused on “energy and environmental issues facing Colorado.”

As a press release announcing the committee points out, the move comes in anticipation of expected policy changes in due to the results of the election. State-Sen. Ray Scott said:

“Colorado’s already well known for our passionate interest in all issues related to energy and the environment, so this seems like a logical response to the growing demand we see for more study, deeper discussion and innovative policy ideas,” said Scott. “The changes in attitude and approach we’re expecting from the Trump administration will only add to the importance and relevance of the work this select committee will do.”

Another member of the committee, state-Sen. John Cooke, who represents Colorado’s top energy producing county, touted the importance of energy development to the state’s economy as an example of why legislative leaders saw the need for a new committee to examine energy issues in greater detail:

“Energy is one of the two or three top economic engines driving Colorado’s economy, so we must find a way to support those jobs and revenues while also protecting the natural places that make Colorado special,” added Senator Cooke.

The state’s leading Democrats and Republicans have long-recognized the importance of energy development. Colorado’s Democrat governor, John Hickenlooper has been a stalwart supporter of oil and natural gas development, and a leader against ballot initiatives aimed at driving fracking out of the state. And Colorado’s bipartisan support for fracking also extends to the state’s US Senators where Democrat, Michael Bennet and Republican, Cory Gardner have both touted the importance of energy development to the state.

Shale development has delivered millions of dollars in revenue to fund Colorado schools; has boosted important safety and infrastructure improvements; and provided an important funding stream for many other critical economic development projects across the state, even during a time of low commodity prices.

For example, a round of grants disbursed by The Mesa County Federal Mineral Leasing District – totaling nearly $300,000 – were awarded earlier this year to fund street repairs and enhancements, utility improvements, equipment upgrades for a rural fire department, and an initiative to improve school safety in a Mesa County school district. As KJCT 8 reports:

“The Mesa County Federal Mineral Lease District is giving $100,000 to District 51 schools to upgrade the classroom door lock system — making school more secure.”

The report goes on:

“It’s really exciting to be able to get the funding to put better locks on our class room doors, so teachers are able to lock down their classrooms and keep their students safe a lot faster,” said Crystal Stephenson, Principal of Nisley Elementary.

And along with mineral leasing revenues, shale development has been found to significantly benefit surrounding communities in many other ways. Researchers at Duke University found that shale development has been boosting public revenue for local governments across the country. An example of their findings can be seen in a case study on Colorado’s Piceance Basin, released alongside the report that shows dramatic increases in economic activity and public revenue in shale regions. From the case study:

“Tax revenues grew very quickly from 2002 to 2008, the peak of regional natural gas development, rising from $2.6 million to $12.4 million, led by sales taxes. A variety of capital grants, including DOLA grants from severance tax and federal mineral lease revenues, added an additional $11.6 million in 2008 (Rifle Department of Finance 2002-2013). Overall revenues grew from roughly $10 million in 2002 to a peak of $34 million in 2008.” (Emphasis added)

And along with the increased tax base, it is also clear from the case study that town officials see oil and natural gas development as having a lasting impact. Also from the case study:

“Overall, the city manager describes the surge in natural gas development in the mid-2000s as a net benefit for Rifle’s fiscal health, as new businesses and buildings have boosted the city’s tax base far above the levels of the early 2000s.”

Colorado shale development continues to be an important revenue stream for rural communities across Colorado. So while “Keep-It-In-The-Ground” activists fly in from other states attempting  to block federal mineral lease auctions and  stage protests and publicity stunts, it is clear that Colorado’s legislative leaders are seeking to advance policies that benefit all Coloradans.

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