Colorado Drive to Push Back Oil, Gas Operations Gets Cash Infusion
An initiative to broaden the setback on oil and gas operations in Colorado likely won’t appear on the November ballot, but the proposal – which analysts say would be a blow to oil and gas – is raking in new cash.
Called the “Mandatory Setback for Oil and Gas Development,” Initiative No. 78 would move the distance for a hydraulic fracturing operation from 500 feet or more to a minimum of 2,500 feet or more from an “area of special concern,” such as occupied housing, drinking water sources, sports fields and parks. The current law stipulates a 500-foot setback and expands to 1000 feet from schools and hospitals.
Analysts at Wells Fargo found that supporters of the measure – “Yes for Health and Safety over Fracking (Yes on 78) – took in $147,500 in cash contributions since June, bringing the total to $238,700. However, they said in an Aug. 2 note to investors, it’s unlikely that supporters will obtain the necessary 98,492 signatures required by Aug. 8 to force the proposal to the November general election ballot.
Wells Fargo said based on local feedback, analysts suspect between 50,000 and 60,000 signatures have been collected.
Initiative No. 78 would “severely impact (exploration and production) operations and development in Colorado,” Wells Fargo said in an Aug. 2 note to investors.
Operators in the Niobrara/DJ Basin would likely see pressure on their stock prices if the initiative were to make it to a vote, Wells Fargo said. However, Initiative No. 78 would be hard-pressed to actually pass and become law. Despite their belief the proposal won’t get on the ballot, there is potential for share price reaction from investors in the event it does.
According to the June 1 Denver Post editorial, the initiative is designed to eliminate hydraulic fracturing in Colorado.
“When we noted last year that initiatives filed with the state by foes of hydraulic fracturing had the potential to ‘cripple’ oil and gas drilling, even we didn’t appreciate the magnitude of the potential impact,” the newspaper’s editorial board wrote. “Rather than use the word ‘cripple,’ we should have said ‘eliminate.’”
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