By Syndi Nettles Anderson, guest writer for the Independence Institute Energy Policy Center
Earlier this week Todd Shepherd of Complete Colorado reported that before thin-filmed cadmium-telluride solar panel manufacturer Abound Solar declared bankruptcy it was the subject of a Colorado Department of Public Health and Environment (CDPHE) investigation after an anonymous tip raised concerns about cadmium contamination.
Shepherd provided documents showing that the now abandoned Weld County plant produced monthly 630 pounds of highly toxic cadmium waste that was shipped to Deer Trail in Arapahoe County for storage.
Because of the recent interest in cadmium, below is a primer on the rare earth element used in so many products besides solar panels.
Cadmium, one of the 17 rare earth elements (REE), is a soft silver-grey metal, commonly found in ores containing zinc. Products that use significant cadmium include rechargeable batteries, solar cells and protective steel coatings. Recently cadmium has been priced about a dollar per pound.
Cadmium is a byproduct when zinc is refined from zinc ore, or recycled from nickel-cadmium rechargeable batteries. The largest producers of cadmium are China, South Korea, Japan and North America. The concentration of cadmium in the earth’s crust is between 0.1 and 0.5 parts per million (ppm). This is about one hundred times more common than gold.
Cadmium is very useful in rechargeable batteries and solar cells. In the U.S., about 27 percent of cadmium-nickel batteries are recycled, which requires batteries to be taken apart.
However, cadmium is also very poisonous. Exposure is most dangerous when breathing in dust or vapors containing cadmium. Other methods of exposure are also dangerous, as cadmium can be absorbed through the skin or by ingestion.
People can absorb cadmium through inhalation, absorption or by eating it. The cadmium is transported through the body by blood cells and plasma. Cadmium goes into the kidneys, resulting in kidney failure. Before toxic levels are reached, kidney function will start to deteriorate. Generally a third to half of the cadmium that is in a body will be found in the kidneys. Cadmium will also move to the liver and muscles. In the liver, the half-life of the cadmium is 5-15 years, in the muscles-30 years and in the kidneys 10-30 years.
During ore smelting processes, cadmium is released into the air. It may also be released into the atmosphere by burning cadmium-containing garbage. Cadmium exposure can cause throat and lung irritation. Lower levels of exposure also cause shortness of breath, and with prolonged exposure resulting in bronchiolitis and emphysema with lung damage, bloody coughing, and accumulation of fluids in the body. One highly concentrated exposure can cause lifetime damage to lungs. 
Metal fume fever can be caused by inhaling cadmium during the welding and metal heating processes of older silver solder. Metal fume fever can cause flu like symptoms with fainting, sore throats, coughs, and headaches. Working with cadmium requires extremely well ventilated areas, respirators, and extreme care. Regular blood and urine checks are required to monitor the amount of cadmium that can get into the body. 
Phosphate fertilizers, sewage sludge and contaminated water can deposit cadmium into food sources. Growing rice and wheat can absorb Cadmium. Large ocean fish can also take up a lot of cadmium. Smokers also intake cadmium into their bodies and have about double the cadmium levels that non-smokers have. Cadmium is associated with breast cancer, lung cancer, prostate cancer, heart disease, and kidney dysfunction. 
As a result of the increased awareness of the danger of cadmium to humans, the EPA released a new report December 3, 2012, expanding the regulations and proposing new regulations regarding cadmium.
This final rule requires manufacturers (including importers) of cadmium or cadmium compounds, including as part of an article, that have been, or are reasonably likely to be, incorporated into consumer products to report certain unpublished health and safety studies to EPA. 
Occupational Safety Health Association (OSHA) also highly regulates workers contact with cadmium stating,
Cadmium and its compounds are highly toxic and exposure to this metal is known to cause cancer and targets the body’s cardiovascular, renal, gastrointestinal, neurological, reproductive, and respiratory systems.
Requirements to protect workers from cadmium exposure are addressed in specific OSHA cadmium standards covering general industry (1910.1027), shipyards (1915.1027), construction (1926.1127) and agriculture (1928.1027).
In conclusion, Cadmium is critical to the solar cell and rechargeable battery industry but extreme care must be taken to prevent cadmium from getting into the air, water or plant life. Cancer, lung damage and kidney failure are real risks for cadmium exposure.
 Wilburn, D.R., 2007, Flow of cadmium from rechargeable batteries in the United States, 1996-2007: U.S. Geological Survey Scientific Investigations Report 2007–5198, 26 p., available at http://pubs.usgs.gov/sir/2007/5198/.
 Common environmental contaminant, cadmium, linked to rapid breast cancer cell growth. ScienceDaily. Retrieved February 14, 2013, from http://www.sciencedaily.com /releases/2012/04/120423184203.htm
American Association for Cancer Research (AACR) (2012, March 15). Dietary cadmium may be linked with breast cancer risk. ScienceDaily. Retrieved February 14, 2013, from http://www.sciencedaily.com /releases/2012/03/120315094506.htm
Cell Press (2012, September 12). Studies shed light on how to reduce the amount of toxins in plant-derived foods. ScienceDaily. Retrieved February 14, 2013, from http://www.sciencedaily.com /releases/2012/09/120912125517.htm
Update: The personal property tax incentive was not extended to Vestas either for the 2012 budget. In the 2011 budget Vestas received $96,252 in tax incentives. Commissioner Sean Conway said the vote to discontinue the incentives going forward for both Abound and Vestas was 5-0 in December 2011. The same measure was defeated for the 2011 budget on a 3-2 vote.
Bad news for employees and taxpayers, Abound Solar, Colorado’s high profile manufacturer of “next-generation thin-film cadmium telluride solar modules” and recipient of a $400 million Department of Energy loan, just announced it is laying off 70 percent (280 employees) of its Colorado workforce.
Some suspected storm clouds on the horizon for Abound. Despite a late fall PR blitz that included a “news story” in the Denver Business Journal that read more like an Abound press release, the Commissioners of Weld County, where Abound’s manufacturing plant is located, acted on their suspicions that all was not right with the company and suspended nearly $100,000 in property tax incentives for 2012.
In 2011 Weld County extended $98,445 in personal property tax incentives to the solar module manufacturer, but when it came up for renewal in December for the 2012 budget, commissioners decided to save the taxpayers that money instead. Commissioner Sean Conway explained he wasn’t convinced that Abound actually was creating jobs for county residents, which was the intended purpose of tax incentives.
Just days after the Weld County Commissioners reviewed the county’s 2012 budget that excluded Abound incentives, CEO Craig Witsoe defended Abound in the Denver Business Journal calling themselves the “anti-Solyndra.” Witsoe further explained that even though Abound still wasn’t profitable after four years in business and a $400 million taxpayer-guaranteed loan, it was on the brink of boosting production. So far, Abound has drawn down only $70 million of the $400 million.
For more than a year the Independence Institute’s investigative reporter Todd Shepherd and the energy policy center have been detailing Abound Solar’s problems. We take no pleasure reporting about people losing their jobs or taxpayers’ losing their money. Unfortunately, Abound Solar is yet more proof that government should not be in the venture capitalist business because it has a nasty habit of picking losers. At least for the Weld County taxpayers, their commissioners came to that realization in time to save them $100,000.
Commerce City is twisting itself in knots over whether or not to allow hydraulic fracturing within its city limits. The City Council delayed the moratorium vote for another month so it could discuss the issue further according to reports from 9 News.
Commerce City officials would be wise to head north and seek counsel from Greeley. In an interview on the Amy Oliver Show, Greeley Mayor Tom Norton revealed that the city has roughly 200 wells within its boundaries that are hydraulically fractured. It’s been going on for years, and he has no cause for concern. Furthermore, the wells serve as a revenue stream for the city.
With more than 18,000 wells, 90 percent of which are hydraulically fractured, Greeley and Weld County have proven that oil and gas can peacefully and environmentally co-exist with landowners, including those in urban areas.
Commerce City residents have no reason to fear hydraulically fracturing. In fact the only people who should be afraid of fracking are those who make money selling Middle East oil to the United States. In our new energy economy, we have the Saudis running scared.
Part three in a series responding to a Denver Post guest editorial titled “Is Colorado addicted to oil?” from Gary Wockner of Clean Water Action.
The impetus for Wockner’s column seems to be a comment from Governor John Hickenlooper regarding the recent announcement from Anadarko Petroleum about increased investment in the Wattenberg Field due to the discovery of an additional nearly 1.5 billion BOE (barrels of oil equivalent). Hickenlooper said, “We are thrilled to see the company plan a significant investment in Colorado.”
In true Sierra Club elitist fashion, Wockner asks “Addicted or thrilled? Which is it?” As if to suggest that both are bad.
In the first two posts I answered several of Wockner’s ”Is Colorado addicted to oil?” and the role that the oil and gas industry plays in Colorado’s and Weld County’s economy. Now, I’ll address the pot shots Wockner takes at Greeley and Weld County.
Full disclosure: I live in Greeley, the county seat of Weld County. So this is personal. And something I wouldn’t do originally, I’ll answer the “thrilled” question.
In a poorly constructed column, Wockner relies old data and provides no analysis, just unflattering questions directed at Weld County. (He doesn’t like us.)
Weld County already has more oil and gas wells — about 18,000 — than any other county in the United States. So, if oil and gas is good for the economy, shouldn’t Weld County have one of most thriving economies in America?
Weld County’s unemployment rate, poverty rate, home mortgage “underwater” rate, and bank failure rate are well above the state’s average, and Weld County’s home foreclosure rate has been one of the highest in the nation. In addition, Weld County and Greeley (the county seat) have serious problems with crumbling schools and roads, an issue that is supposed to be addressed by money from property and severance taxes on oil and gas. What’s wrong with this picture?
What’s wrong with this picture? Everything, especially Wockner’s guilt by association fallacy. It’s sophomoric at best from a guy who has a doctorate. He provides no quantitative facts except the number of wells. His schools, roads, and foreclosures argument is a red herring. Apparently, oil and gas reserves should equate to economic paradise with streets paved with gold. Sorry, that’s only the Saudi royal family.
First, let’s update with a few economic facts about Weld County, something that escaped Wockner’s analysis. At the end of September The Denver Economy Blog reported on the recently released Bureau of Labor Statistics County Employment and Wages Summary:
The average weekly wage exceeded the national change of 5.2 percent in Denver, Douglas, Larimer and Weld Counties. weld [sic] County showed the largest year over year growth with average wages increasing 7.6 percent….
Weld County’s increase placed it at 22nd in the nation for wage growth. Douglas County placed 34th in the nation.
Compared to the nation’s employment growth rate of 1.3 percent, Denver, El Paso and Weld Counties placed higher with year over year employment growth rates of 2.0 percent, 1.4 percent and 3.6 percent, respectively.
Weld County’s growth placed it 12th in the nation for employment growth. Denver placed 65th. On the other hand, total employment in Douglas County and Jefferson County grew by 06 percent and 0.5 percent, respectively. All counties surveyed showed growth in total employment.
Year-over-year change in average weekly wage, by county:
- Denver 5.0
- Douglas 7.1
- El Paso 2.9
- Jefferson 3.7
- Larimer 5.3
- Weld 7.6
Year-over-year change in total employment, by county:
- Denver 2.0
- Douglas 0.6
- El Paso 1.4
- Jefferson 0.5
According to Weld County Commissioner Sean Conway, Wockner’s dismal portrayal of Weld County relies upon old headlines to create an image of an economic hellhole. But Conway lives in and represents a much different Weld County. In fact, Conway’s been told that “without Weld’s energy cluster economy the state’s unemployment rate would be a full percentage higher.”
Weld County did suffer the closure of several community banks including New Frontier Bank. That had more to do with poor management and our agriculture industry and real estate. Sadly, it coincided with the new Ritter Rules for oil and gas, which slowed the permitting and drilling process. Investment in Colorado dropped significantly. People were laid off.
Weld County like many throughout the country continues to endure through difficult economic times. And we’ve done it without raising property taxes, no county sales tax, and no debt due in large part to our oil and gas industry.
These resources are not an economic panacea, but without them Weld County and the state of Colorado would be in a financially precarious situation. According to Conway the State Land Board received $100 million in revenue in 2010 from its land leasing operations, 70 percent of which came from Weld County, and that money went directly to the state’s K-12 education fund. So those who want funding for K-12 should be “thrilled” with Weld County’s oil and gas industry.
Furthermore, the $6-7 million in severance taxes that was supposed to come back to the county via the Department of Local Affairs (DOLA), instead remained in state coffers to help balance the state budget. Thank you again to Weld County for sharing its oil and gas profits with the rest of the state.
In 2008, Weld County received roughly $56 million from oil and gas severance taxes that went straight to county coffers. That money was used to help Weld County through the Great Recession. Weld County didn’t go into debt, didn’t raise taxes, and didn’t layoff a slew of county employees. We did balance our budget.
The oil and gas industry is also a good corporate neighbor as the Colorado Oil and Gas Association reports:
Oil and gas companies are investing in rural infrastructure such as roads, sewer, and water lines in Weld County—the county with more oil and gas wells than any other county in the nation according to Weld County Commissioners. And where infrastructure investments are made, jobs and development soon follow.
Halliburton officials confirmed the company’s plans to expand their holdings south of Fort Lupton with the addition of a $20 million facility that could eventually double the number of employees currently on staff. Key to Halliburton’s expansion plans is $2.4 million in water and sewer upgrades along Weld County Road 27, extending service 2.5 miles down to Weld County Road 8.
“It is probably the biggest thing to happen for the city in probably 50 years,” Fort Lupton Mayor Tommy Holton said. “Because it adds 2.5 miles of water and sewer, and close to 2,000 acres of property that could be developed with industry.”
And industry giants like Halliburton aren’t the only companies making a difference in the communities in which they do business.
When Conquest Water Services, founded in 1993 by Bruce White and Dale Butcher, petitioned Weld County to build a new water disposal and recycling facility at County Road 74 and Highway 392, they learned about a Briggsdale School District bus stop at that intersection.
Recognizing a need for a safer bus stop, Conquest built, at its own expense, a new one on a one-acre fenced parcel with a safe gravel turn-around which it maintains and leases to Briggsdale School District for $1.00 a year. “We understand the concerns of neighbors, and we do everything we can to be good neighbors,” said Conquest co-founder Bruce White.
No question that in the past Weld County had problems with foreclosure rates, but the most recent data from DOLA shows how Weld’s foreclosure rate has gone down dramatically from one in every 66 homes in 2006 to one in every 269 homes through the second quarter of 2011. The state average is one in every 365, but according to DOLA the frontrange isn’t the problem:
Adams County reported the highest foreclosure rate of the metropolitan counties, although all of the top ten counties with the highest foreclosure rates were found outside the metropolitan areas including: Park, Grand, Gunnison, Garfield and Archuleta, among others.
As for schools, some Weld Districts have problems, including my own but that has NOTHING to do with the oil and gas industry. Wockner equates money with good schools and nothing could be further from the truth. If money were the only factor, Washington D.C. would be graduating rocket scientists and Utah wouldn’t graduate anyone.
As for roads, Weld County is roughly 4,000 square miles, and drivers enjoy well-maintained county roads especially first responders. According to Weld County Sheriff John Cooke response time has dropped by half since 2003 due to the increase in paved roadways and that is due, in part, to revenue from oil and gas.
It’s obvious that the Fort Collins-based Wockner rarely ventures east of I-25 unless it’s in an airplane. If he did, he might have an appreciation for how Weld County encourages oil and gas development without sacrificing quality of life — surface rights and subsurface/mineral rights peacefully co-exist here. And that seems to drive the anti-fossil fuel crowd nuts.
For our county, money is in the land. Greeley Mayor Tom Norton said it best, “wealth is in the ground, and you’ve got to get it out to create more wealth,” whether that’s water, agriculture, mining, or fossil fuels.
Wealth isn’t just money. It’s our way of life. It’s our people. And that includes the oil and gas industry. I wouldn’t live anywhere else.
So I’ll answer Gary’s question, I’m thrilled with additional investment in Weld County’s oil and gas resources. And I’m in good company.
Gary Wockner’s editorial is long on conjecture and short on facts. It’s little more than 20 questions, which could be answered if Wockner bothered to do a modicum of research. I answered his headline, “Is Colorado addicted to oil?” in my first post. Now I’ll address his next questions about the “role” of the oil and gas industry in Colorado’s economy. Wockner begins:
A few years ago, President George W. Bush stood in front of Congress in a nationally televised speech and said that “America is addicted to oil.” And then he spoke about how we must end that addiction for the good of our economy, our environment, our national security, and our future. Recently, after another huge oil field was discovered in Weld County, Gov. John Hickenlooper was quoted in The Denver Post as saying, ‘Anadarko’s announcement today shows once again that Colorado is a leader in the energy sector of our country’s economy. We are thrilled to see the company plan a significant investment in Colorado.’
Addicted or thrilled? Which is it?
Obviously Wockner isn’t thrilled, which is the whole point of his demogoguing. Yet, it isn’t unreasonable for Coloradans including Governor Hickenlooper to be thrilled about Anadarko’s announcement because we, our economy and way of life, are reliant upon petroleum. As I wrote in my first response, Colorado like any other culture not living in the 13th century needs to have petroleum. Until we find some type of cost effective alternative, petroleum is it. Personally, I am thrilled, but I can’t speak every other Coloradans so I won’t try.
Obviously, these are two very conflicting views of the role oil should play in our economy and our future, and they raise honest questions the public needs to address: What is the actual role that oil and gas plays in our economy? Where do all the billions of dollars go?
Wockner and his Clean Water Action are opposed to fossil fuels so they are the ones in a state of conflict, which makes me wonder if Wockner is opposed to economic activity. In our economy, private companies provide goods and services that consumers want who voluntarily exchange some form of currency for products, which benefits both groups as business profits by meeting consumers’ wants and needs. Producers can earn a profit, and consumers obtain the goods and services they want. So the role of oil and gas is to provides goods and services that consumers want. The oil and gas industry then returns some of that profit to communities in the form of capital investment, charitable contributions, dividends to shareholders or anything else a private company wants. It’s not up to Wockner and his ilk to decide how the oil and gas industry spends its profits.
In Colorado, the oil and gas industry is a major economic player. Besides using fossil fuels to heat our homes (it’s -8 degrees right now), power our cars, produce precious solar panels, and make thousands of items we use every single day, here are a few facts about the economic impact of oil and gas in Colorado according to the Colorado Oil and Gas Association (COGA):
- The OIL & GAS industry in Colorado directly employs 50,000 people and supports over 190,000 jobs in the state and provides $12.4 billion in total labor income and $24 billion in value added economic output annually; this is 9.3% of the total in the state.
- The NATURAL GAS industry in Colorado directly employs 30,000 people and supports over 137,000 jobs in the state and $8.4 billion in total labor income and $18.4 billion in value added economic output annually; this is 7.3% of the total in the state.
- Our industry is responsible for roughly 6% of total employment in Colorado.
- Only the cities of Denver, Colorado Springs, and Boulder have more jobs than the State’s oil and natural gas industry.
- In Colorado, more than 75 percent of residential homes use natural gas as their primary energy source for home heating, one of the highest shares in the nation.3
- Colorado had more than 40,000 oil & gas wells in production.
- Ten of the Nation’s 100 largest natural gas fields and three of its 100 largest oil fields are found in Colorado.
- Colorado produces 1/4 of all coalbed methane in the U.S.
- Severance tax is levied on extraction of metals, coal, oil and gas and is part of TABOR revenue base. Oil and gas pay over 90% of the state’s severance tax.
- The total assessed values for taxable Oil and Gas property in 2010 was $6.25 billion or 5.63% of the state total
Yesterday I spent an hour talking with John Christiansen and Brian Cain of Anadarko Petroleum Corporation on my radio show. Anadarko is one of the world’s largest independent natural gas and oil exploration and production companies in the world. It had total sales revenue of just under $11 billion for 2010 according to its most recent annual financial report.
Anadarko, its employees, and the community were celebrating the ribbon cutting on their newly expanded field office in Evans, Colorado. It’s an unassuming but comfortable 46,000 square foot build out paid for by Anadarko. It’s efficient with video conferencing to save the company time and money and a modest kitchen for employees who don’t want to leave for lunch. No taxpayer-guaranteed loan here (think Solyndra) so no 300,000 square feet of “the Taj Mahal”, no spa showers with liquid-crystal water temperature displays, no conference rooms with glass walls that change from clear to smokey with the touch of a button, no robots whistling Disney tunes. When I asked why Anadarko’s new building didn’t have a spa, the response was simple, “it’s not necessary.”
Globally, Anadarko employs roughly 4,400 an increase of 10 percent since 2007 after a decline from 2006.
In Colorado, Andarako employs roughly 260 people out of Evans field office, another 100 in Brighton and couple hundred more in Denver office. The average salary is between $70,000 and $80,000. And unlike Abound Solar, Cain and Christiansen told me that Anadarko is hiring.
Because of the recent discovery of up to 1.5 billion BOE in the Wattenberg Field, Anadarko expects to invest $1 billion in Weld County alone in 2012. County Commissioner Sean Conway says the additional oil and gas activity could mean as much as $50 million in additional revenue to county coffers. This is all direct investment. The ripple effect of this economic activity will be profoundly positive for Colorado and Weld County.
Also, giving back to the community part of the mission of the oil and gas industry, which certainly shows in Weld County. At the ribbon cutting yesterday, Anadarko handed a check for $25,000 to the Boys and Girls Club of Weld County. A combination of several oil and gas companies, including Anadarko, Noble, Encana, Halliburton, and others, have provided $250,000 for the Weld Food Bank. By contrast, Abound, which has its manufacturing plant in Weld County, has received a $400 million taxpayer guaranteed loan from the DOE, and tax credits from Weld County, is not a contributor to the food bank. Vestas Blades, also with manufacturing in Weld County, has given a one time donation of $750.
But where the money goes should be irrelevant because a private company can do what it wants with its money. However, if Anadarko or any other oil and gas company mismanages its profits, can’t remain competitive, or can’t provide goods, services people want then it will go out of business (unless it gets a DOE loan). And it should.
Perhaps Colorado is “addicted” to oil because we are “addicted” to a modern lifestyle and economic activity. We’re also addicted to water and oxygen. Nothing wrong with that.
Next, I’ll address Wockner’s gratuitous attacks on Weld County and Greeley.
For fun, which of these was paid for with a taxpayer-guaranteed loan?
The Denver Post gave Gary Wockner of Clean Water Action prime newspaper real estate in Sunday’s perspective section. Wockner’s guest editorial “Is Colorado Addicted to Oil?” was nothing more than a list of typical anti-fossil fuel questions that he tried to associate to Colorado’s and Weld County’s economic struggles as a result of the Great Recession.
Clean Water has a clear mission of advancing global warming hysteria to scare voters and policy makers away from reliable, affordable, and abundant fossil fuels and towards the economically unsustainable and environmentally unfriendly world of renewable energy.
Wolkner used 20 question marks in his column. For that reason, I cannot answer every question in one post. Over the next few days, I’ll answer most. Some, such as whether or not Governor Hickenlooper and the rest of Colorado are “thrilled” about the discovery of additional BOE (barrels of oil equivalent) in Weld County, are subjective and will be ignored.
The first question, contained in the headline, is Colorado addicted to oil? The answer is only to the extent that Colorado is addicted to a modern, civilized lifestyle and the economy needed to maintain it. Rankin Energy Corporation, an energy exploration and production company out of Oklahoma, provides a partial list of the products made with petroleum. One 42-gallon barrel of oil produces 19.4 gallons of gasoline. The rest, which is more than half the barrel, is used to make more than 6000 different products including:
|Solvents||Diesel fuel||Motor Oil||Bearing Grease|
|Ink||Floor Wax||Ballpoint Pens||Football Cleats|
|Bicycle Tires||Sports Car Bodies||Nail Polish||Fishing lures|
|Cassettes||Dishwasher parts||Tool Boxes||Shoe Polish|
|Motorcycle Helmet||Caulking||Petroleum Jelly||Transparent Tape|
|CD Player||Faucet Washers||Antiseptics||Clothesline|
|Percolators||Life Jackets||Rubbing Alcohol||Linings|
|Skis||TV Cabinets||Shag Rugs||Electrician’s Tape|
|Tool Racks||Car Battery Cases||Epoxy||Paint|
|Mops||Slacks||Insect Repellent||Oil Filters|
|Roofing||Toilet Seats||Fishing Rods||Lipstick|
|Denture Adhesive||Linoleum||Ice Cube Trays||Synthetic Rubber|
|Speakers||Plastic Wood||Electric Blankets||Glycerin|
|Tennis Rackets||Rubber Cement||Fishing Boots||Dice|
|Nylon Rope||Candles||Trash Bags||House Paint|
|Water Pipes||Hand Lotion||Roller Skates||Surf Boards|
|Shampoo||Wheels||Paint Rollers||Shower Curtains|
|Guitar Strings||Luggage||Aspirin||Safety Glasses|
|Combs||CD’s & DVD’s||Paint Brushes||Detergents|
|Anesthetics||Artificial Turf||Artificial limbs||Bandages|
|Dentures||Model Cars||Folding Doors||Hair Curlers|
|Cold cream||Movie film||Soft Contact lenses||Drinking Cups|
|Fan Belts||Car Enamel||Shaving Cream||Ammonia|
Also, petroleum is needed to make solar panels and wind turbines. A little factoid from Rankin, “Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each! But, as shown here petroleum is not just used for fuel.”
Are we addicted oil? Only if you enjoy and are “addicted” to a modern lifestyle made possible by the discovery of fossil fuels. I’ll revisit this question at the end of this series of blog posts.
Next up, the role of oil and gas in Colorado’s and Weld County’s economy. I’ll address the following questions from Wockner, “What is the actual role that oil and gas plays in our economy? Where do all the billions of dollars go?”
Xcel Energy enjoys great success at the state Capitol. It seems that whatever Xcel wants legislatively, Xcel gets. Relief for ratepayers is met with opposition.
According to the Secretary of State’s online lobbying information, through March 2011, the utility company has taken positions on 28 different bills this year: opposing 14, supporting 3 and “amending” or “monitoring” 11. So far, bills the utility company supports have either passed or are making their way through the General Assembly.
Most interesting are the 14 bills Xcel opposes, including pro-consumer legislation such as transparency on ratepayers’ energy bills and reducing energy costs through utilization of a “least cost principle.”
Under the leadership of Speaker Frank McNulty (R-Highlands Ranch), the House has done its part by killing all seven bills Xcel opposed in that chamber, including HB 1240 which would have repealed Colorado’s carbon tax and restricted Xcel’s rate of return on capital construction. The “phantom carbon tax,” as my colleague William Yeatman and I have labeled it, is:
a central component of his [Governor Bill Ritter] New Energy Economy…a big, hidden energy tax that makes customers pay for the controversial theory of global warming.
In order to make Ritter’s New Energy Economy appear affordable, the Public Utilities Commission (PUC) allows Xcel Energy to incorporate at least a $20-per-ton carbon tax into the economic models the utility uses to make resource acquisition decisions. The tax is used in the models, and the models dictate spending.
Ritter’s carbon tax is the worst kind of virtual reality because it leaps from the computers to your wallet.
Representative Spencer Swalm garnered bi-partisan support for the repeal, but Republicans killed it in the House Agriculture Committee with “NO” votes from Representatives Glenn Vaad (Greeley), Ray Scott (Grand Junction), and Committee Chairman Jerry Sonnenberg (Sterling). Sonnenberg and Scott were even listed as sponsors of the legislation.
The all-Republican Weld County Board of Commissioners also joined the Ag Committee Republicans, going on record as supporters of Colorado’s phantom carbon tax. Commissioner and Chairwoman Barbara Kirkmeyer, testified that her “entire board” opposed HB 1240 and thus opposed the repeal of the phantom carbon that is so costly to ratepayers.
Furthermore, in 2008, Vaad, Sonnenberg and McNulty opposed the initial legislation that enabled the carbon tax that they now support.
The State Senate, under the leadership of Senate President Brandon Shaffer, also has done its part to appease Xcel. So far, it has killed five Xcel-opposed bills, including the “least cost principle,” and two more are languishing in committee.
Monday the House continued its anti-ratepayer policy with passage of HB 1291, which would approve Colorado’s State Implementation Plan (SIP) for regional haze costing ratepayers an additional $1 billion according to Xcel’s 2010 annual report. The plan is both expensive and likely illegal. The $1 billion price tag is of little concern to Xcel because it recovers the entire cost from ratepayers. Xcel customers can thank Representatives David Balmer, Don Beezley, Kathleen Conti, Don Coram, Robert Ramirez and Spencer Swalm for their courageous “NO” vote.
Mr. Yeatman, our energy policy analyst, has written extensively on the SIP. In particular, he has detailed the plan’s unnecessary inclusion “of two small coal fired power plants near Steamboat Springs, Hayden 1 and Hayden 2, because it mandates controls that are at least $100 million more expensive than what is required by the Environmental Projection Agency.”
- Costs of the plan exceed benefits by a 40:1 ratio.
- Even the EPA concedes that the chosen technology, Selective Catalytic Reduction (SCR), is not cost effective for smaller plants such as Hayden 1 and Hayden 2.
- Utah determined that SCR is not cost effective.
- Evidence suggests that the Colorado Department of Public Health and Environment grossly overestimated visibility benefits.
- The threat of a federal takeover if the plan was not submitted by January 2011 was greatly exaggerated, rushing the deliberative process.
- Under Colorado law (§25-7-105.1(1) C.R.S.), a SIP cannot impose emissions controls that are more stringent than what the EPA requires.
HB 1291 must be important because the Colorado Oil and Gas Association (COGA) is saturating television and radio with ads encouraging Republicans to approve it. Leaving nothing to chance, sponsorship includes two heavy hitters – Speaker McNulty and Senate Majority Leader John Morse – essentially guaranteeing passage at the expense of ratepayers.
The prevailing paradigm on Colorado’s energy policy is that industry, the utility, politicians, environmentalists and bureaucrats have come together to forge a united “clean energy” path for Coloradans. However, there’s one group that has been noticeably absent – ratepayers, those fools who actually pay the bill.
Yeatman conservatively estimates that the four most prominent aspects of the New Energy Economy will cost Colorado ratepayers an additional $212.3 million in 2011 alone. Add millions more for the SIP that the Colorado General Assembly does not have the courage to challenge along with tiered seasonal rates, and Colorado ratepayers are in for an expensive 2011.
There is good news. Two State Senators Kevin Lundberg (R-Berthoud) and Lois Tochtrop (D-Adams County) are challenging leadership and providing a voice for consumers. Senator Lundberg introduced SB 237 to require state to consider the cost-effectiveness of the SIP and be more energy-neutral.
Energy experts say that either Lundberg’s or Tochtrop’s bills likely would save ratepayers between $100-200 million dollars, which means they probably don’t have a chance in this state legislature.
While it’s not surprising that an investor-owned, state-sanctioned monopoly would seek favor with the legislature, it is surprising that elected officials expected to represent the interests of their constituents would simply rubber-stamp Xcel’s political and financial agenda.
But with this General Assembly, Xcel gets its way.
Having spent time on a hydraulic fracturing job site in Weld County, I can say that it is a completely underwhelming experience — just the way I want it.
Hydraulic fracturing allows natural gas producers to recover natural gas from deep deposits. Frac’ing is both safe and cost effective. The fluid used is 99 percent water and sand. Still, Congresswoman Diana DeGette and Congressman Jared Polis both want more federal regulation but aren’t likely to get it. According to the Durango Herald, this current Congress won’t have time to consider their bill and the next Congress isn’t likely to do so either.