Op Ed: Years Long Energy Savings at Risk Come Tuesday
Colorado has experienced mile-high savings in energy costs, but could be in danger of losing the discounts
Record energy production and state-of-the-art technologies have significantly reduced the price of natural gas. This has helped Colorado households and businesses save nearly $12.4 billion between 2006 and 2016, Consumer Energy Alliance recently found after crunching data from federal and state agencies.
Colorado residential users saved more than $4.3 billion; commercial and industrial users saved more than $8 billion – all thanks to a local energy boom that has helped families and businesses increase disposable income, job growth and economic investment during a time when the state's cost of living and growth have exploded.
The state's oil and gas industries now support 232,900 workers, contribute more than $31.4 billion to the state's economy and account for nearly 10 percent of gross state product, supporting jobs in 50 of the state's 64 counties.
Moreover, producers contributed nearly $1.2 billion to state budgets via property, income and severance taxes in addition to public land leases and royalties, helping fund municipal services including school, road maintenance and safety. The State Land Board, for instance, has distributed $1.4 billion in revenue from energy development to build and support pubic schools over the last 10 years. Other communities, like Aurora, have been revitalized. In 2018, their city manager proposed a budget that included $1 million in oil and gas property taxes to be set aside for affordable housing projects.
But instead of strengthening these positive impacts, efforts are being made to flip this basket of economic benefits over – and the end of the banquet is fast approaching.
Anti-development activists, some from out-of-state, are threatening to eliminate the production and transportation of these resources despite Colorado having the strongest air and water regulatory framework for oil and gas production in the country.
They're doing this by urging voters to vote yes to Proposition 112 on Tuesday. If approved, the law would move the minimum setback for oil and gas wells from 500 feet for homes and 1,000 feet for schools to 2,500 feet for both with benefits that are unclear if non-existent.
It would also set Colorado back.
All told, 54 percent of the state's entire land surface would be off-limits to oil and gas production, reducing property and severance tax revenue and income from land leases and royalties. Local tax revenues would drop in the first year, from $459 million to $258 million – a 56 percent cut – and then plunge by $1 billion by 2030.
School funding would also be drastically cut – by 60 percent – with $230.3 million eliminated over a three-year period, according to a State Land Board estimation. Farmers who lease land to energy companies, meanwhile, would lose a significant portion of their income, hurting the state's agricultural sector.
More concerning is that these efforts would increase household energy expenses. Each Colorado resident spent, on average, $2,681 in energy-related needs in 2016 – a small amount for some, but a backbreaking tally for many others, especially the more than 564,000 residents in poverty statewide. For them, such costs eat up at least 22 percent of their take-home pay.
In all, about 147,000 jobs – almost equal to the population of Fort Collins, Lakewood or Centennial – could be lost. Can you imagine a whole city's worth of jobs just disappearing?
Not all those jobs will come in oil and gas.
Lost paychecks will also come in fields impacted or aided by the industry, like restaurants, hotels and grocery stores across the Front Range – many of whose customers work in energy – and schools, police and fire stations, which lean on revenue and taxes paid by local energy.
Colorado has a rich business diversity because of the state's ability to allow businesses to operate at reasonable costs, a tradition in taking rational approaches to business development, policies and regulations that are balanced and thoughtful, not impulsive and reckless.
Case in point: The U.S. power sector, thanks to innovation and environmentally safe machinery, has reduced carbon emissions by nearly 30 percent despite increasing in production here and nationwide.
Attempting to shut down the oil and gas industry won't lessen fossil fuel usage; it'll just create capacity constraints and higher costs for electricity, food, goods and fuel. New York made similar policy decisions, and its residents now pay a staggering 44 percent above the national average for energy.
That's not an example Colorado should follow – at least not with any viable any solutions to fall back on.
Emily Haggstrom is the senior director of Consumer Energy Alliance in Denver.