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Common Sense Policy Roundtable Weighs in on SB 19-181 with Senate Appropriations Committee

FOR IMMEDIATE RELEASE
March 7, 2019
Contact: Cinamon Watson
303-949-7264

Denver, CO – Today, Chris Brown, Common Sense Policy Roundtable (CSPR) Director of Policy and Research provided testimony on SB 19-181 before the Senate Appropriations Committee.

Late last week, Colorado lawmakers introduced sweeping new regulations on the oil and gas industry in the form of Senate Bill 19-181. Opponents of the bill have charged the new regulations will have a chilling effect on the industry. Proponents claim the bill offers protections for communities. Today marks the second hearing on the bill. The first hearing on the bill took place a short 96 hours after introduction in the Senate Transportation and Energy Committee.

“Concerning to us, as a group of organizations that stand for the promotion of free-enterprise and the continued prosperity of the citizens of Colorado, is not just the potential substantial loss in economic value, but the extent to which this current draft exempts the economic feasibility from being required as a consideration for future regulations or permitting,” said Brown.

The new legislation comes just four short months after voters soundly rejected Proposition 112, a measure that would have effectively shut down new oil and gas production in Colorado by increasing the setback requirement for natural gas and oil development to 2,500 feet. In consideration of Proposition 112, CSPR released a comprehensive study on the economic and fiscal impact of that measure.

“While there are differences between SB 19-181 and Proposition 112, our study offers insight into the impact of new regulations,” continued Brown. “Given the magnitude of the impacts, and the continued reliance of our economy on oil and natural gas, I wanted to be here today, to again, publicly share the results of our study.”

Browns full testimony:

Thank you Madam Chair, 

My name is Chris Brown and I am the Director of Policy and Research for the Common Sense Policy Roundtable.

My name is Chris Brown and I am the Director of Policy and Research for the Common Sense Policy Roundtable.

My organization, along with the other REMI Partners, including The Colorado Association of Realtors, Colorado Concern, Denver South Economic Development Partnership and The Colorado Bankers Association, released an in-depth study on the economic and fiscal impacts to the state of Colorado if Proposition 112 were to have passed.

I would urge you to visit our website www.commonsensepolicyroundtable.org, where you can find the full economic analysis of Proposition 112, but here were some of our key findings.  

    • Based on the surface setbacks of 2,500 ft, after accounting from some level of horizontal drilling to access reserves under the surface setback, we estimated that between 62% and 80% of new production would not occur. 
    • By 2030, the Colorado economy would have lost between 115,000 and 147,000 jobs annually, resulting from losing between 44% and 57% loss of the entire industry. 
    • The cumulative loss in state and local tax revenue by 2030 would be between $7 and $9 billion. 

Given the magnitude of the impacts, and the continued reliance of our economy on oil and natural gas, I wanted to be here today, to again, publicly share the results of our study.  

Concerning to us, as a group of organizations that stand for the promotion of free-enterprise and the continued prosperity of the citizens of Colorado, is not just the potential substantial loss in economic value across multiple sectors, but the extent to which this current draft exempts the economic feasibility from being required as a consideration for future regulations or permitting.  

Currently, the law would seemingly tie up new, and possibly existing, well permits as both the state and local governments develop the rules they choose granted by the new authority SB 181.  From my work on Proposition 112, the largest impacts are in the first year or two of a new well given the steep decline rates, and therefore even temporary disruptions can have significant impacts.

The uncertainty of the current text would risk the economic vitality and tax base of many communities throughout Colorado, as lower cost alternatives would not be explored, even as the economic impacts from the cumulative costs of new regulations may leave thousands of Coloradans out of work. 

The state of Colorado is a recognized leader in its use of cost/benefit analysis and the COGCC, and the Department of Public Health and the Environment have a trove of research that has been appropriately used to weigh the multi-faceted needs of each stakeholder at the table, and to my knowledge exempting the economic feasibility would be unprecedented. 

We plan to continue to rely on existing research and develop our own, as this issue progresses. Thank you for your time.

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About Common Sense Policy Roundtable: Common Sense Policy Roundtable is a non-profit, free-enterprise think tank dedicated to the protection and promotion of Colorado’s economy. CSPR actively follows job and economic development legislation and free enterprise public policy initiatives.

About the REMI Partnership: Common Sense Policy Roundtable, Colorado Concern, Colorado Association of REALTORS®, Colorado Bankers Association, and Denver South Economic Development Partnership have partnered to develop independent, fact-based analysis that quantifies the broader economic impacts associated with policy changes. The partnership has provided Colorado lawmakers, policymakers, business leaders, and citizens with greater insight into the economic impact of public policy decisions that face the state and surrounding regions.