Up to 147,800 jobs lost over the next 12 years. Up to $1.1 billion in forfeited tax revenue for state and local governments in that time. In all, up to $141 billion in lost oil and gas production in Colorado by 2030.
That is the dire economic forecast often touted by opponents of Proposition 112 — the ballot issue that calls for increasing the minimum distance for new oil and gas wells from homes, schools, rivers and lakes to 2,500 feet — should the measure pass on Nov. 6. More than four out of every five non-federal acres in Colorado would be off-limits to new drilling under the stricter setback, the Colorado Oil and Gas Conservation Commission estimates.
The economic numbers come from a report issued earlier this year from a consortium of business groups led by the Common Sense Policy Roundtable, with numbers checked by faculty at the Colorado School of Mines.
Colorado Rising, the group behind Proposition 112, calls the job loss claims a “scare tactic” and the economic impacts of reduced drilling “greatly overstated” on its campaign website. It is pushing the measure because it believes the current setback of 500 feet from homes exposes too many Coloradans to unhealthy, and even deadly, emissions from well sites.
But Gary Arnold, business manager of the Denver Pipefitters Local 208, said the projected economic devastation of Proposition 112 is all too real.
“We’re not going to say our jobs are more important than somebody’s health, but we do think workers should be part of the conversation as we move forward,” he said. “We can’t leave the middle-class and blue-collar workers out.”
Arnold said the impacts of an expanded no-drilling zone go far beyond the front-line oil and gas workers running the well site day to day.
“There’s also the whole level of workers who are doing custom fabrication and manufacturing of equipment — just because they are not on site doesn’t mean they won’t be affected,” he said.
And the multiplier effect of boxing out new rigs will also affect ancillary jobs like truck drivers, hotel owners and 7-Eleven clerks, the industry says.
Anne Lee Foster, a lead organizer with Colorado Rising, said the state has a diverse economy that doesn’t need to rely on fossil fuel extraction as its primary economic driver. Colorado’s economy grew stronger over the last few years, she said, even as oil prices sank and cuts were made to oil patch payrolls.
“It’s a boom-and-bust industry, and they’re trying to boom next to our homes,” she said.
Foster said with more than 50,000 wells already in operation in Colorado — all of which would be grandfathered in if Proposition 112 passes — the claim that a bigger setback would cripple the industry rings false.
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But Dan Haley, president and CEO of the Colorado Oil and Gas Association, said the contention that existing wells are enough to keep the industry healthy in Colorado is a phony premise. The bulk of the manpower is required during the drilling and hydraulic fracturing phase of a well, with just a skeleton crew needed once the well pad has been completed.
“Rigs are jobs,” Haley said. “That’s when the people are working.”
Also, he said, oil and gas plays become less productive as they age — another reason why the need for labor is greater at the front end of well’s life cycle.
Jack Strauss, a professor of economics at the University of Denver, said the Proposition 112 economic impact study uses sound methodology in coming up with its numbers, though he said it may be somewhat “overplaying” the impacts.
“It’s very likely there will be tens of thousands of jobs lost — whether there will be 147,000 jobs lost by 2030, I’m not sure,” he said.
