Energy Firms Send Mixed Messages

Investors told of riches, public of rule hardships

Monday, June 2, 2008

 

Energy companies are bullish on Colorado’s future, at least when speaking to investors and business audiences.

But oil and gas firms often sound a worried note when talking to regulators and the public.

Why the mixed message?

It’s a reflection of the energy boom on one hand and the prospect of tougher state-imposed drilling rules on the other.

The message to the corporate and investor world is that Colorado has a bonanza of energy riches that’s ready to be harvested. The message to the state and the public is that the proposed rules are so onerous that companies might have to reduce drilling, cut investment, even possibly take their rigs and go elsewhere.

Industry officials see no contradiction; critics see a good deal of spin.

The issue arises against the backdrop of an unprecedented rush for energy in Colorado, where applications for permits to drill have tripled – to beyond 6,000 a year – since 2003.

That surge in activity has sparked a backlash in some areas, where complaints about drilling’s impacts on roads, wildlife and scenery have led the state to draft tougher environmental rules for the industry.

"I’ve been working on oil and gas policy now for 20 years in Colorado and across the country, and every single time we have tried to get a new regulation or a new law passed, industry’s always had the same response: It will simply cost us too much money and we’ll have to leave the state," said Gwen Lachelt of the watchdog group Oil and Gas Accountability Project in Durango.

The companies, Lachelt notes, are still here and doing better than ever, particularly as prices for oil skyrocket and natural gas increases as more pipelines open access to more U.S. gas markets.

Defending the message

Industry officials, however, defend the mixed messages, arguing they’re an accurate reflection of reality: The companies are upbeat about Colorado, but worried that overly stringent rules will limit the pace of development.

 

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