Colorado Residents and Oil, Gas Industry Continue Open Dialogue Efforts

Colorado Residents and Oil, Gas Industry Continue Open Dialogue Efforts

Colorado sits on top of vast fossil fuel resources with estimates running as high as 2 billion barrels of oil, according to the U.S. Energy Information Administration.

Crude oil production in the state rose 64 percent from 2007 to 2011, and marketed natural gas production increased by 27 percent. Last year, the oil and gas industry pumped $29.6 billion into the state's economy, supporting more than 110,000 high-paying jobs, according to the study “Assessment of Oil and Gas Industry 2012: Industry Economic and Fiscal Contributions in Colorado”. Employment increased 17 percent from 2010 to 2012, adding more than 7,600 jobs.

"Direct employment totaled more than 51,200 jobs, with average wages of $74,800, which are 49 percent higher than the state average for all industries," the report stated.

Colorado Residents and Oil, Gas Industry Continue Open Dialogue Efforts

Fourteen counties in Colorado experienced heavy rains and catastrophic flooding with Boulder County being the worst hit. Flood waters spread across a range of almost 200 miles from the north to the south and Governor John Hickenlooper declaring the areas a disaster emergency on Sept. 13, 2013.

This major flooding caused numerous oil spills in northern Colorado, bringing the total amount of oil released in and near the South Platte River to about 43,000 gallons, state regulators reported.

Around 18,060 gallons of wastewater containing residual amounts of oil and gas was spilled in the flooding, officials at the Colorado Oil and Gas Conservation Commission added. About 1,900 wells were shut down at the height of the flooding. 

Noble Energy Inc. suffered between $7 million and $17 million in losses because of flood damage and lost production, the company told the Denver Post.

"Collectively, this industry contributed nearly $3.8 billion in employee income to Colorado households in 2012, or 2.8 percent of total Colorado salary and wages."

Furthermore, the oil and gas industry paid more than $600 million in property taxes last year, accounting for nearly 9 percent of all property taxes paid in the state. In total, the industry contributed nearly $1.6 billion in revenues to state and local governments, schools districts, and special districts, according to the report.

The study also pointed out that oil and gas extraction technology, specifically hydraulic fracturing, is more efficient, achieving greater output with fewer permits – the state approved 37 percent fewer permits between 2010 and 2012 but witnessed an increase in oil and gas production during this time frame.

In 2010, the industry produced more than 32 million barrels compared to over 48 million in 2012, according to data from the Department of Regulatory Affairs. Natural gas in the state produced over 1,626,000,000 thousand cubic feet in 2010 compared to almost 1,651,100,000 thousand cubic feet in 2012.

"Due largely to technological advancements, the oil and gas industry is producing more with a smaller footprint in Colorado," Doug Flanders, director of policy and external affairs at Colorado Oil and Gas Association, told Rigzone. "The state is reaping the economic benefits of increased production while lessening the environmental impact of development. Plus, with the increased use of natural gas, the U.S. is witnessing the lowest carbon emissions in 20 years – all of which is great news."

While the state partakes in the nation's energy renaissance, it is causing a controversy over booming energy production and the widespread use of hydraulic fracturing. Since March 2007, Coloradoans have submitted around 1,000 complaints to state regulators asking for enforcement against energy companies.

The increased use of fracking has sparked public concerns that the chemicals in the process could pollute drinking water resources. Such concerns have prompted some county and city leaders to enact rules and regulations for drilling operations that are stronger than state regulations.

Opponents of hydraulic fracturing have turned in petitions seeking to ban the practice or impose drilling moratoriums in several counties in Colorado including Longmont, Broomsfield, Fort Collins, Lafayette and the city of and county of Boulder.

Some residents of Fort Collins have formed a group, Citizens for a Healthy Fort Collins, and have collected enough signatures, 8,000 specifically, asking to ban fracking for five years. The group's first move is to try and restrict fracking within city limits.

But by having an open dialogue, COGA believes that perceptions can change.

"When all parties can have a respectful conversation about the industry's practices, great things can happen," he stated.

Of the 26 jurisdictions that had bans or moratoriums or were rewriting their rules, 23 have resolved those efforts through memorandums of understanding with the state, or with the operator. Some have even dropped the efforts to rewrite the rules.

"This resolution took a lot of work and man hours, but it was worth it because the industry now has a great working relationship with the community and the government," he said.

This grass roots community outreach has grown and now includes a new public education effort aimed at informing the general public about the energy, economic and environmental benefits of safe and responsible oil and natural gas development.

Coloradans for Responsible Energy Development (CRED) has launched an initiative to get the message out about the safe practices of hydraulic fracturing.

“Even though we’ve been fracking since 1947, and more than 90 percent of today’s oil and natural gas wells are fracked at some point during their lifespan, most residents admit to not knowing or understanding what it involves. Yet, a startling number of Coloradans have seen, read or heard something – overwhelmingly false and negative – about fracking,” said Jon Haubert, the organization's communications director. “Our core mission is to get Coloradans the facts, and let them make an educated decision.”

This organization is funded by Anadarko Petroleum Corp. and Noble Energy Inc., two of the largest leaseholders in the state and combined, including third party contractors, are planning an investment of upward of $10 billion to continue to develop resources in the state.

"We continue to work with the state, counties, municipalities and citizens to provide information about our activities, the adverse affects a ban on hydraulic fracturing would have on Colorado and local communities, and the vast economic, jobs, energy-security and consumer-price benefits associated with a vibrant oil and natural gas industry," John Christiansen, director of external communications at Anadarko, told Rigzone.

"Just one example of the role oil and natural gas plays in the state and local economies can be seen in Weld County, the only county in Colorado with a budget surplus, where our company paid $75 million in taxes in 2012 - $30 million of which went to public schools (K-12).”

Earlier this year, Noble Energy, the state's largest leaseholder, announced plans to build Colorado's first dedicated liquefied natural gas plant. The $45 million plant in northern Weld County will be adjacent to a new $45 million natural gas plant the company is building in Keota, about 50 miles northeast of Greeley. The two plants, at a cost of $90 million, will produce up to 100,000 gallons per day and will have the capacity to process 30 million cubic feet of natural gas per day, respectfully.

"We continually look for ways to enhance our environmental performance, and this facility is expected to help improve air quality by enabling us to utilize natural gas we produce right here in Northern Colorado to power many of our local operations," said Ted Brown, Noble's senior vice president for its northern region, in a statement.

The company said it plans to use the LNG from its new plant in Weld County to run the company's drilling rigs and other heavy equipment in the Denver-Julesburg (DJ) basin. Noble also plans to sell the LNG to other energy companies working in the area.

Noble currently has several drilling rigs working in the basin and is investing about $1.7 billion in its Colorado operations this year.

"Our plan over the next five years is to invest some $8 billion dollars in wells and facilities in the area, and as a result there will not only be growth in Noble Energy employees, but we have some 120 contractors that support us in the field," Noble Energy Chairman and CEO Chuck Davidson said in a statement. "So there are many, many more jobs that are being created," he added. 



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Most Popular Articles