THORNTON — A statewide ballot measure that would dramatically increase the distance new oil and gas wells would have to be from homes, schools and waterways will be a job-gutting attack on Colorado’s economy, opponents say. It will deprive cities and towns of millions of dollars in tax revenues and rob thousands of mineral rights owners access to their underground property.
Or Proposition 112, known during the petition process as Initiative 97, will bring long-sought sanity to neighborhoods throughout the state, bolstering the health and safety of thousands living above or on the edge of Colorado’s increasingly industrialized energy landscape.
Those are the competing messages voters will have to sort out on Nov. 6, when they will be asked whether additional controls should be placed on drilling in a state experiencing an ongoing population boom alongside an intensifying hunt for the resources that power modern life. Specifically, the measure would increase setbacks for new wells to 2,500 feet instead of current setbacks of 500 feet from homes and 1,000 feet from schools.
The question has already brought out the big guns in what is quickly becoming a high-stakes battle over the future of a multibillion-dollar industry in Colorado.
“For some sectors of the economy, (Proposition 112) is a Category 5 threat,” said independent political analyst Eric Sondermann. “I do believe the oil and gas industry, which is a huge player in this state, sees this not just as a nuisance or hassle. They see it in existential terms.”
Proposition 112 has already insinuated itself into Colorado’s race for governor as a front-burner issue. Several weeks ago during a speech at an oil and gas conference in Denver, Democrat Jared Polis was heckled by a trio of protesters intent on pressuring the gubernatorial hopeful to take a harder line on the energy extraction industry. Both Polis and Republican opponent Walker Stapleton have come out against the measure.
Dan Haley, president and CEO of the Colorado Oil and Gas Association, told the crowd after Polis left the stage that the industry would fight Proposition 112 with everything it has. Already this year, oil and gas operators have given $21 million to Protect Colorado, the committee opposing the measure. By contrast, the committee backing the measure, Colorado Rising, has received $615,000 in contributions in 2018.
“We take this initiative very seriously and we will do whatever we can to defeat it in November,” Haley told The Denver Post in an interview last week. “I think this setback distance was meant to eliminate oil and gas operations altogether.”
Commonsense solution
But Anne Lee Foster, who heads up Colorado Rising, said she and her allies aren’t trying to run oil and gas operations out of the state. There are more than 50,000 active wells in the state today, she said, that wouldn’t be subject to the 2,500-foot setback. Foster said people just want reasonable limits when it comes to drilling close to neighborhoods. They worry about the health effects, the noise, the dust, the lights, the vibrations, the ruined views.
And they worry about the potential for disaster. Nothing clarified the need to increase distances between oil and gas wells and neighborhoods more, she said, than the home explosion in Firestone nearly 18 months ago that killed two men. The incident was blamed on a leaky flowline from a nearby well that hadn’t been capped properly.
“This is a response to a crisis that has arrived on the doorsteps of mothers, fathers and concerned citizens,” Foster said. “All we’re asking for is a commonsense solution to toxic, industrial activity.”
Foster said 2,500 feet was identified because it’s approximately half a mile — the distance that advocates claim is needed to safely reduce exposure to volatile organic compounds, like cancer-causing benzene. They cite health studies that support the half-mile separation, though some of that research has come under attack from not only the oil and gas industry, but state health officials. Earlier this year, the head of the Colorado Department of Public Health and Environment questioned the conclusions of a University of Colorado study linking oil and gas well proximity to childhood leukemia.
Foster remains undaunted and said despite the industry’s superior financial firepower, bigger setbacks are necessary. She noted that even though energy interests poured far more money than their opponents into an election in energy-rich Erie this past April they were unsuccessful in getting a slate of pro-oil and gas candidates into town hall and into the mayor’s seat.
“We’ve seen many times when the industry has outspent us and the grassroots has won,” she said. “I think the health of our children is the utmost priority.”
With virtually no one in favor of having an oil and gas facility in their backyard — or even near their backyard — Sondermann said there is an “initial instinctive appeal” to the mandate of Proposition 112.
“The yes side has less of a burden to make their case,” he said. “The 112 proponent’s case appeals to the heart — the opponent’s case is more of a head case.”
Impact to economy ‘staggering’
Head or heart, the case for keeping Colorado’s energy industry humming is one that the oil and gas sector has been working more diligently than ever to convey to the public. The industry often points to a report issued in July by the Colorado Oil and Gas Conservation Commission that concluded that 85 percent of all nonfederal land in the state would be off-limits to drilling if setbacks were expanded to 2,500 feet. In Colorado’s five most productive counties for oil and gas, 94 percent of all non-federal land would no longer be available for new wells, the study said.
And according to a fiscal note accompanying the measure on the Colorado Secretary of State’s website, the Colorado Legislative Council calculated that the current 500-foot setback prohibits oil and gas development on about 18 acres surrounding a given point. A 2,500-foot buffer would place 450 acres surrounding that same point on a no-drill list.
The additional restriction, Haley said, would have a “staggering” impact on Colorado’s economy. He points to a recent study conducted by a local business consortium that concluded that a 2,500-foot setback would eliminate up to 80 percent of new oil and gas development annually in the state and jettison between 115,000 and 147,800 jobs in Colorado by 2030. The study also warned that state and local tax revenues from oil and gas activity would decline by up to $258 million in 2019 alone if Proposition 112 passes, hitting schools and other public services hard.
That would likely mean the end of life in Colorado for Scott Yenzer, a 51-year-old single father of three who works as a senior vice president for Berthoud-based Black Eagle Energy Services. His company, which employs around 400, hooks up pipelines to wells and installs gathering lines.
“It would mean I would have to leave Colorado,” said Yenzer, who has worked in the industry here for the past decade. “We work for the oil companies and if the oil companies cease to exist, so do the jobs.”
Another big loser should Proposition 112 prevail at the ballot box would be the thousands of mineral rights owners who won’t be able to access their property once the setback is in place. Because of Colorado’s “split estates” system of separating ownership of underground minerals from the surface property above, prohibiting drilling on extensive swaths of land effectively keeps large deposits of gas and oil inaccessible, even with the recent improvements made in fracking technology — like lateral drilling.
The cost in royalties in northeast Colorado could amount to $26 billion, Ray told The Denver Post earlier this year.
And that’s patently unfair to those who planned to rely on their royalty payments for their retirement or to grow a business, said Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners. He sees a strong likelihood that the measure will spur millions of dollars of litigation, as mineral rights owners claim an illegal takings of their property.
Haley, of COGA, said his industry has done a poor job of getting across the human story — like the ones Yenzer and Ray tell — behind the drill rigs and oil tanks. And in the absence of that information, fear-mongers have effectively filled the void and taken control of the narrative, Haley said.
“So you had an opportunity for outside people to come in and tell people that their faucets would catch on fire and their kids would get bloody noses,” he said. “There are certain people opposed to our industry that we’re never going to sway, but we want to reach the vast majority of Coloradans who may have questions about our industry.”
In the shadow of wells
Coloradans like Cassandra and Rob Andersen, who moved into a brand-new house near East 152nd Parkway and York Street in north Thornton a year ago. The couple was dismayed to learn shortly after moving in that a massive 26-well operation, known as the Ivey pad, is slated for development just over 1,000 feet beyond their backyard fence.
Rob Andersen worries about how vibrations from hydraulic fracturing, the technique where a mix of sand, water and chemicals is pumped into the ground to loosen mineral deposits from shale, might affect structural integrity of his house. He’s also concerned about leaking emissions from the wellhead drifting on to his and his neighbors’ properties. Visually, the couple dreads having to look out on a series of large tanks from their backyard patio, where last week hawks could be seen floating from tree branch to lamp post.
“We don’t know what it’s going to do to our property value,” he said. “When we go to sell later on, are we going to have trouble selling?”
Cassandra Andersen said she and her husband recognize that they rely on fossil fuels to heat their home and propel their vehicles, but that doesn’t mean anywhere and everywhere is appropriate for the heavy industrial activity involved in extracting those resources.
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“When you’re talking 26 wells, is that enough distance anymore?” she said. “Why are they drilling in urban areas? It’s the size — no one’s looking out for the citizens.”
Because the Ivey pad has already gained its permits from the state, the Andersens acknowledge that Proposition 112 probably wouldn’t prevent the project from going forward. But they still support the measure.
“It may be too late for us but this may be able to help another family,” Cassandra Andersen said.
Erie is filled with families that could benefit from Proposition 112, said Beth Ewaskowitz, who moved into the new Compass neighborhood last year. The fast-growing town 25 miles north of Denver is on the southwest edge of the gas-rich Denver-Julesburg basin and has seen intense drilling in recent years.
Ewaskowitz counted more than 70 active wells within a mile radius of her home and got her 7-year-old son tested for volatile organic compounds in his system. He was at the 85th percentile for benzene and other related compounds, she said. While she can’t definitively pin her son’s readings on oil and gas activity in Erie, she said she can’t ignore the possible link, either.
“It comes down to our health and safety,” she said, citing the primary reason she will vote for Proposition 112.
Not the first attempt
Proposition 112’s prospects for victory on Nov. 6 are uncertain, if history is any guide. In 2014, a campaign supported by Polis would have imposed a 2,000-foot setback on new wells. But the measure was withdrawn as part of a compromise deal that instead saw the Colorado Oil and Gas Conservation Commission tighten up rules on fracking. Another attempt two years ago to increase setbacks failed for a lack of valid signatures gathered during the petition process.
Proponents of the measure point out that the statewide nature of the proposed setbacks ballot issue gives it a far more powerful reach than the multitude of local regulations and drilling moratoria that individual cities and towns — like Fort Collins, Broomfield, Thornton, and Longmont — have tried to place on the oil and gas industry over the last few years.
Almost without exception, courts have ruled that local limits that interfere with state law cannot stand. No matter what happens, Jennifer Gamble, who is with the group Adams County Communities for Drilling Accountability Now, said Colorado’s decades-old mineral extraction laws, which worked well when the state’s population was just a couple of million people, will inevitably continue running into resistance as mineral-rich land that was once vacant fills in with homes and businesses.
“It’s created a situation where there will be no winners,” Gamble said. “It’s a big, hot mess.”
