December 3 Colorado Energy Cheat Sheet: US House resolutions push back on Clean Power Plan, rail vs. pipelines in Denver, Gold King Mine owner has strong words for EPA
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, New Energy Economy
The U.S. House passed two resolutions on the Clean Power Plan and carbon emissions this week:
The House sent a resounding message to the nations gathering in Paris for international talks on climate change by approving two Senate resolutions to block President Obama’s restrictions on power plants.
The resolutions now go to Obama. When the resolutions passed the Senate last month, the White House said Obama would veto the resolutions.
The House on Tuesday voted 242-180 to block the Clean Power Plan, a mostly symbolic measure by Congress to stop President Obama’s signature environmental regulation. The chamber also passed a second resolution to block carbon emissions limits on new power plants, 235-188.
The Clean Power Plan, seen as Obama’s signature environmental regulation, is the centerpiece of the administration’s commitments to the 21st Conference of Parties, or COP21, being held in Paris during the next two weeks.
Rep. Ed Whitfield, R-Ky., said the vote is meant to show the 195 other countries gathering in Paris that there are serious objections to the Obama’s plans in the United States.
“We want to send a message to the climate change conference in Paris that in America there’s serious disagreement with the extreme policies of this president,” Whitfield said.
There are at least two ways to ship crude oil and related fuels–by rail or via pipeline–and the recent surge in tank cars on the nation’s rail lines have mashed up against the rapid urbanization of former industrial and commercial areas of Denver, such as the neighborhoods between Union Station and the Platte River:
Peering through four panes of insulating glass, it’s not the noise that bothers Don Cohen as a daily parade of freight trains passes 50 feet outside his condo. He and some Riverfront Park neighbors are troubled by what they’re seeing on the tracks more frequently. Tanker trains carrying crude oil and other flammable liquids — reflecting a shift in energy trends — rumble past the gleaming high-rise condo and apartment buildings several times a week, he says.
Those tankers pass near other Denver neighborhoods, too, old and new, upscale and hardscrabble. Highways and railroads box in some areas, with only one way out if disaster were to strike.
The trains also travel near the city’s major sports venues and Elitch Gardens Theme and Water Park, raising fears among some about what might happen in a fiery derailment or other accident — however small the chances might be.
Appeals by Cohen and others to city officials for increased emergency planning have met with mixed success.
It’s difficult to ignore that the rail lines in the region have
The numbers of rail shipments have increased over the past 7 years:
Nationally, crude oil volume on the rails has skyrocketed from just shy of 10,000 tank cars in 2008 to about 500,000 last year, The Associated Press recently reported. In Denver, according to city officials’ summary of reports by the two major railroads, trains carried well over 15,000 tank cars of flammable liquids in a recent one-year period, including 8,000 filled with crude oil.
The owner of the Gold King Mine shares more insights into the August Environmental Protection Agency-triggered spill in southwest Colorado:
Todd Hennis, owner of the Gold King Mine, was vacationing at a remote lake in upstate New York when a friend sent him images of the Environmental Protection Agency-contracted crew’s triggered blowout on his property, effectively turning the Animas River into an orange spectacle. He was speechless and horrified, but not surprised.
“I’ve been trying to make everybody aware of the dangers posed by the Sunnyside Mine pool for 14 years,” he told The Durango Herald last week. “But when I saw the pictures, I just felt my life was over. I just thought, ‘Oh God, what did they do?’”
The EPA, investigating the Gold King Mine’s partially collapsed tunnel, accidently released an estimated 3 million gallons of acid mine drainage Aug. 5 into Cement Creek, down the Animas River and into the San Juan River in New Mexico.
Hennis, for his part, has long maintained increased flows from the Gold King Mine are a result of groundwater seeping from the vast, adjacent Sunnyside Mine network after it was plugged, first in 1996.
“I went up to the Sunnyside offices that were in Gladstone at that point and said, ‘I’d like to talk about the discharge,’” he said. “They denied everything, and have been denying it ever since.”
Hennis minced no words about how he felt since the EPA took over four months ago:
In the aftermath of the Aug. 5 blowout, Hennis said he gave the EPA the keys to his land for an immediate cleanup response. But since, he claims the federal agency has enforced a complete takeover of his property.
“They’ve been so thoroughly arrogant, incompetent, and frankly criminal in their outlook, that it’s kind of like dealing with the mafia,” he said. “It is very much an act of rape. I don’t mean to denigrate women who’ve gone through it, and for that matter, some men, but it’s been such an ugly penetrative act on an unwilling victim.”
An unrelated uranium mine spill near Cañon City has activists comparing it to the EPA Gold King Mine spill, though the volume is nowhere near as large as the August spill, and was located at a 30-year-old Superfund site (a designation many desired for area around the Gold King Mine):
Colorado health officials were reviewing an explanation from Cotter Corp. on Monday after a spill at Cotter’s defunct uranium mill in central Colorado — one of the nation’s slowest Superfund cleanups.
A pipeline leaked about 1,800 gallons last week on Cotter’s 2,538-acre property uphill from Cañon City and the Arkansas River.
Well tests in July found water in the waste pipeline area contained elevated uranium (577 parts per billion, above a 30 ppb health standard) and molybdenum (1840 ppb, above a 100 ppb standard).
This spill was the latest of at least five since 2010. Federal authorities in 1984 declared an environmental disaster and launched a Superfund cleanup.
This spill prompted comparisons to the EPA’s toxic spill near Durango:
“They need to eliminate the contamination at its source,” said attorney Travis Stills, who represents the community group Colorado Citizens Against Toxic Waste.
Buried mill tailings and impoundment ponds “continue to be sources of contamination. It’s some of the most toxic mining residue you could have — all of what you’d expect to find at a Gold King disaster, plus an overlay of uranium and radioactive isotopes, flowing into groundwater with a very direct route to people and the Arkansas River, ” Stills said. “What’s it going to take to get real action?”
Approximately 89 percent of the state’s oil production, or nearly 100 million barrels by year’s end, will come from Weld County in 2015, despite declining energy prices:
Despite a general slowdown in oil drilling across the Denver-Julesburg Basin and elsewhere, production growth in Weld County this year is on track to top 100 million barrels of oil.
Oil production growth in the county continues to cast a long shadow over the rest of the state, with more than 89 percent of the state’s production this year coming from Weld, up from 85 percent in 2014.
Industry analysts say operators are getting more oil from every well by drilling the best parts of the basin, employing improved well fracturing techniques and optimizing operations.
“We are seeing a relentless drive to push down costs across the basin,” said Reed Olmstead, manager of North America supply analytics, upstream strategy and competition at IHS Energy in Englewood. “Improved productivity is an important part of well economics, and in this price environment, only the best wells are getting drilled.”
Here are some of the staggering numbers from Weld County:
For the first half of 2015, Weld oil production averaged 8.7 million barrels per month, up from a monthly average of 6.7 million barrels in 2014.
Statewide oil production for 2015 so far is at 79.46 million barrels. Of that, 70.85 million barrels, or 89 percent, were produced in Weld. Rio Blanco is the second-largest oil county in Colorado with 2015 production of 2.6 million barrels produced to date.
Barring an unexpected drop-off in production, Weld is on pace to produce more than 100 million barrels of oil this year, a remarkable milestone considering the county produced just 26.8 million barrels in 2011.
In 2014, Weld produced 81.4 million barrels, or 85 percent, of the statewide total of 95.2 million barrels. For Weld, that was an increase of 13.8 million barrels, or 19 percent, from 2013 production.
Meanwhile, Sen. Michael Bennet (D) has introduced a bill designed to spur carbon capture technology:
A bipartisan measure being carried by U.S. Sen. Michael Bennet and a Republican senator from Ohio aims to boost capture and storage of carbon dioxide, which would not only keep it out of the atmosphere but make it available for use in boosting oil production.
Bennet, D-Colo., and Sen. Rob Portman introduced the Carbon Capture Improvement Act last month. It would help power plants and industrial facilities finance the purchase and installation of carbon capture and storage equipment. Businesses would be able to make use of private activity bonds, which typically are used by local or state governments, are tax-exempt, and can be paid back over a longer period of time.
The captured carbon dioxide could be stored underground or used by energy companies in a process known as enhanced oil recovery.
“This bill would reduce upfront costs, one of the largest impediments to carbon capture technology. It is good for the economy and good for the environment,” Bennet said in a recent news release. “In Colorado it would enhance our diverse energy portfolio. The captured carbon dioxide can be used by oil producers to extract more oil out of current wells — improving our energy security and boosting domestic energy production. It also reduces emissions from power plants and industrial facilities to help keep our air clean — which is something that Coloradans value and makes our state an attractive place to live.
“This bipartisan bill is a market-based, technology-neutral approach to attacking the problem that carbon dioxide creates.”
Finally, State Sen. Jerry Sonnenberg (R-SD1) says no to a carbon tax:
A tax on CO2 would also negatively impact those not directly tied to Colorado’s coal industry. From home heating to electricity to transportation, Coloradans depend heavily on energy to power their lives. The NAM study estimates that, under a carbon tax, prices for natural gas used for heating and electricity would rise more than 40 percent. Meanwhile, gasoline prices at the pump could jump by more than 20 cents a gallon. These price hikes will affect every family and business in the state and, by 2023, as many as 52,000 people could be put out of work.
This would hit rural Colorado especially hard, as the state’s agricultural sector would face higher prices at every level of production. These costs will ripple throughout the economy, affecting everyone from the ranchers and farmers who drive Colorado’s $40 billion agriculture industry, to families buying local produce.
This regressive, job-killing tax is often advertised as a market solution to cutting emissions. In reality, it’s simply another means of artificially raising the prices of affordable, reliable electricity and pressuring investment in expensive, unreliable energy sources like wind or solar. Rather than imposing additional costs on Colorado families, policymakers should adopt a real market solution that relies on technological innovation and consumer choice while retaining economic growth and low energy prices. If Colorado’s leaders are committed to protecting hard-working Coloradans and growing the state’s diverse economy, they should reject a carbon tax.
October 8 Colorado Energy Cheat Sheet: Ozone rule and Colorado; ‘ban fracking’ resurfaces in Denver; ‘Fossil Fuel Free Week’ proves a challenge
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, New Energy Economy, regulations, renewable energy
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Let’s open with a great piece from Lachlan Markay at the Free Beacon on the ways proponents of the Environmental Protection Agency’s raft of new policies, especially the Clean Power Plan, went on the offensive before the regulation was even finalized:
Supporters of a controversial Environmental Protection Agency regulation commissioned Democratic pollsters to plot ways to attack the motives and credibility of the regulation’s critics, documents obtained by the Washington Free Beacon reveal.
Aides to a dozen Democratic governors and the Democratic Party’s gubernatorial advocacy arm circulated talking points and political messaging memos on EPA’s new power plant regulations that laid out ways to “sow doubts about our opponents [sic] motives,” in the words of one of those memos.
The previously unreported documents, obtained by the Energy and Environment Legal Institute through an open records request and shared exclusively with the Free Beacon, provide a window into the Democratic messaging machine’s approach to an issue that its own pollsters acknowledge is a hard sell among its target voter demographics.
In what was certainly intended as a launching point for
local national anti-energy, “ban fracking” advocates, last weekend’s confab in Denver–no doubt brought to us in no small part by fossil fuels–ramped up their efforts, as Energy In Depth’s Randy Hildreth writes:
National “ban fracking” groups descended on Denver this afternoon to protest oil and gas development as part of the “Stop the Frack Attack National Summit.”
For anyone still wondering if this was a Colorado effort, EID was on hand to note that when a speaker asked the crowd, “How many of you are from out of state?” attendees erupted into cheers. And while the group managed to draw roughly 100 participants, judging from the cheers of out of state folks, we’re guessing the showing was pretty sparse from Colorado (which, of course means they all got into planes and cars burning fossil fuels to get here).
Plenty of photos of the protestors at the link.
So what are they amping/ramping up?
Although Colorado-based environment groups such as Conservation Colorado didn’t participate; the demonstrations drew support from national groups, such as the Sierra Club, and impassioned “fractivist” residents. A group called Coloradans Resisting Extreme Energy Development has declared the COGCC illegitimate and is developing ballot initiatives including a statewide fracking ban.
“Local control” just means “ban fracking” and all other oil and gas development, using a few local fractivists for cover, a pattern of political posturing since at least the 2013 off-year election cycle, when national anti-fracking groups enlisted or created local branches to push ballot measures at the municipal level.
How big an economic driver is oil and gas development? Energy In Depth took a national look:
While these cities lie in different geological regions, they do have one thing in common: shale development. Oil and gas development in these cities was the biggest economic driver throughout 2014. For instance, take a look at the Greeley, Colorado metropolitan area, which encompasses Weld County, where a large percentage of shale development is taking place. It grew its GDP by 9.9 percent in 2014 and ranks fourth in the nation in terms of percent growth. According to a BizWest.com article:
“Greeley’s 2014 growth was dominated by the mining sector, which includes oil and gas extraction, growing by 24.6 percent from the previous year.”
Some early analysis on the EPA’s recently announced ozone rule, set at 70 ppb. Colorado’s unique geographical and topographical situation mean that even at a higher level (original discussions for the ozone rule included possibly lowering the target to 60 ppb from 75), the state will face plenty of difficulties, including some entirely out of the state’s control:
“We don’t expect that the non-attainment areas will expand geographically,” said Will Allison, the director of the Colorado Department of Public Health and Environment’s air pollution control division.
But state officials do have concerns about the new standard’s impact on the state, and they will be talking to the EPA about issues unique to Colorado and other western states, such as the fact that the Rocky Mountains can act as a trap for air pollution flowing across the Pacific Ocean from Asia, Allison said.
The state’s high altitude and pattern of lightning storms also contribute to ozone levels — but there’s very little Colorado officials can do to interfere with Mother Nature.
Heritage Foundation–4 Reasons Congress Needs to Review the EPA’s Ozone Standard
Institute for Energy Research–EPA Finalizes Costly, Unnecessary Ozone Rule
In 2010, EPA reconsidered the 2008 standard and EPA’s delay means that implementation of the 2008 standard is now behind schedule. But instead of waiting until localities are complying with the 2008 regulation, EPA is imposing a newer, stricter standard that puts more counties out of attainment even though ozone levels are decreasing. Below is a map depicting the areas that are projected to be out of compliance under a 70 ppb standard.
National Association of Manufacturers–New Ozone Rule Will Inflict Pain on Manufacturers, Finalized Regulation Still Feels Like a Punch in the Gut
“Today, the Obama Administration finalized a rule that is overly burdensome, costly and misguided,” said Timmons. “For months, the Administration threatened to impose on manufacturers an even harsher rule, with even more devastating consequences. After an unprecedented level of outreach by manufacturers and other stakeholders, the worst-case scenario was avoided. However, make no mistake: The new ozone standard will inflict pain on companies that build things in America—and destroy job opportunities for American workers. Now it’s time for Congress to step up and take a stand for working families.”
According to the National Journal, the new ozone rule has pretty much ticked off everyone concerned, including those on the side of the current administration:
After a banner second term that has seen the most aggressive action on climate change from any administration, the Obama administration just opened up a new fault line with environmentalists.
The Environmental Protection Agency today released its new air-quality standards for ground-level ozone, lowering the allowable level from 75 parts per billion to 70 ppb. That’s well short of what environmentalists and public-health groups had been pushing and a level they say wouldn’t do enough to protect public health.
Industry groups and Republicans, meanwhile, are not likely to be any happier—they have been long opposed to any standard lower than the status quo because of the potential cost of compliance.
The EPA’s shady procedural efforts appear to have killed natural resource development in Alaska, using hypotheticals and possibly in collusion with environmentalists, according to a new report, writes the Daily Caller’s Michael Bastasch:
The EPA may have rigged the permitting process in the Alaskan copper mining project, possibly hand-in-hand with environmentalists, to defeat the Pebble Mine before it even had a chance, a new report by an independent investigator suggests.
“The statements and actions of EPA personnel observed during this review raise serious concerns as to whether EPA orchestrated the process to reach a predetermined outcome; had inappropriately close relationships with anti-mine advocates,” reads a report by former defense secretary William Cohen, who now runs his own consulting firm.
The Pebble Partnership hired Cohen to review the EPA’s decision not to allow the Pebble Mine to seek a permit for mining copper near Alaska’s Bristol Bay. Cohen’s report only looked at the process the EPA used to pre-emptively veto the Pebble Mine. He did not make any conclusions on the EPA’s legal authority to do so or whether or not the mine should even be built.
Cohen found that the EPA’s “unprecedented, preemptive” use of the Clean Water Act to kill the Pebble Mine relied on a hypothetical mining project that “may or may not accurately or fairly represent an actual project.”
“It is by now beyond dispute that the Environmental Protection Agency went rogue when it halted Alaska’s proposed Pebble Mine project. And yet, there’s more.
The more comes via an independent report that criticizes the agency for its pre-emptive 2014 veto of Pebble, a proposal to create the country’s largest copper and gold mine in southwest Alaska. Under the Clean Water Act, the Army Corps of Engineers evaluates permit applications for new projects. The EPA has a secondary role of reviewing and potentially vetoing Corps approval. Here, the EPA issued a veto before [emphasis in original] either Pebble could file for permits or the Corps could take a look.”
Mountain States Legal Foundation’s William Perry Pendley on the latest private property battle vs. federal land managers–”The U.S. Supreme Court on Friday is scheduled to consider whether to take up a case from Utah that could determine whether federal land managers can steal a citizen’s private property.”
Native American energy production faces Democrat opposition:
House Democrats are expected to oppose legislation this week that would remove regulatory burdens for energy production on Native American land that tribes say have cost them tens of millions of dollars.
The Native American Energy Act would vest more regulatory authority over tribal energy production with the tribes themselves, rather federal regulators that have recently sought more stringent regulations on oil and gas production on federal land.
The bill passed out of the House Natural Resources Committee last month with just a single Democratic vote. Among its provisions is language that would exempt tribal land from new Interior Department regulations on hydraulic fracturing, an innovative oil and gas extraction technique commonly known as fracking.
Last but not least, the Western Energy Alliance’s “Fossil Fuel Free Week” concluded last week, and it was a tough challenge (if you’re reading this right now, you’ve failed:
Fossil Fuel Free Week, organized by Western Energy Alliance, has concluded and succeeded in getting people to think about the role of oil and natural gas in their daily lives. The campaign was designed in response to numerous anti-fossil fuel protests in recent months, such as the Keep It In The Ground Coalition, various anti-fracking rallies, demonstrations against Keystone XL and other pipelines and rail transport, the divestiture movement, and kayaktivists against arctic drilling.
The key lesson from the campaign is environmental groups, when directly challenged, fail to provide workable alternatives that replace the full spectrum of products provided by fossil fuels. Instead they respond by being predictably dismissive and offer vague visions for the future, as President Tim Wigley of the Alliance explains:
“As we’ve seen with recent protests, environmental groups incite anger amongst their supporters while dangling fossil fuels in effigy. Yet not accustomed to being poked fun of themselves, environmentalists reacted reflexively to the Challenge, offering weak observations by calling it ridiculous, snarky and a ploy. Well…yes!
September 10 Colorado Energy Cheat Sheet: Colowyo Mine survives WildEarth legal challenge; EPA stumbles in Congressional hearing
Filed under: Archive, Environmental Protection Agency, regulations, renewable energy, wind energy
First up, the first of 4 free panels in September and October designed to highlight the impacts of EPA regulations–Clean Power Plan, ozone rule, and the Waters of the United States:
“The Coming Storm of Federal Energy and Environmental Regulations and their impact on Colorado families, business and economy”
Southwest Weld County Services Center
4209 WCR 24 1/2
Longmont, CO 80504
Wednesday, September 23, 2015 from 11:30 AM to 1:00 PM (MDT)
Are you concerned about all the new regulations coming out of Washington, D.C.? Want to know more about how EPA regs on carbon, ozone, and water will impact you, your family, and your community? Want to know what you can do about them?
Then join us for a free panel event featuring:
Dan Byers, Institute for 21st Century Energy U.S. Chamber of Commerce
Amy Cooke, Independence Institute, Executive Vice President and Director of the Energy Policy Center
Tony Gagliardi, Nations Federation of Independent Business, Colorado State Director
Senator Kevin Lundberg, Colorado State Senate Republicans
Moderator: Michael Sandoval
We provide the lunch and experts. You provide the questions.
Questions: Cherish@i2i.org or 303-279-6536 x 118
Independence Institute, Americans for Prosperity, NFIB–The National Federation of Independent Business, and Colorado State Senate Republicans
For folks in northwest Colorado, some much-needed resolution in the Colowyo mine legal challenge initiated by the WildEarth Guardians earlier this year:
A Colorado coal mine slated for closure due to a technicality has gotten a reprieve from the federal government in a move that could save hundreds of jobs.
The Colowyo coal mine, which has provided hundreds of jobs and millions of dollars to the economy of the city of Craig and the northwestern region of the state since 1977 was in danger of being closed because a renewal permit drafted eight years ago did not take into account the mine’s impact on climate change. An environmental group sued in a bid to invalidate the permit. A court-ordered review by the Department of the Interior and an environmental assessment by the Office of Surface Mining Reclamation and Enforcement (OSM) found there was no significant environmental impact and validated the permit.
“We are grateful to the staff at the Office of Surface Mining and the other cooperating agencies for their diligence and hard work to complete the environmental review within the short timeframe ordered by the judge,” Mike McInnes, chief executive officer of Tri-State Generation and Transmission Association, which owns Colowyo Mine, said in a released statement provided to FoxNews.com.
But if you think the WildEarth Guardians are content to settle with this outcome, you’d be wrong:
WildEarth Guardians was satisfied with the new assessment, said Jeremy Nichols, the group’s climate and energy program director. They are not planning any further legal challenges to Colowyo.
“That said, we do see some room for improvement,” he said.
Nichols noted the new assessment estimates the mine could emit nearly 10 million tons of greenhouse gases every year. He said that doesn’t square with the federal government’s plan to fight climate change.
“If the Interior Department continues to give short shrift to carbon emissions and climate consequences of coal mining,” Nichols said, “There will be mines shut down. We’re not going to be so generous moving forward.”
The ultimate goal of Nichols’ group is to kill coal. They were simply unsuccessful here, trying to move forward on a technicality or improper paperwork. Make no mistake, this wasn’t about the agencies or the mine doing things by the book–this was an attempt to throw the book at the mine and hoping it would stick. It did not for Colowyo, but it might for Trapper, another mine in WildEarth Guardians’s path.
Moffat County Commissioner John Kinkaid posted this short statement to Facebook following the decision:
I just got a personal phone call from Sen. Michael Bennet. He wanted to let me know that largely due to my efforts, Colowyo miners will be able to keep working and get on with their lives. He told me that I did a great job in advocating for northwest Colorado and getting the Secretary of Interior’s interest and help.
What a great complement.
However, you and I both know that many people worked very hard and effectively to achieve a positive outcome. Too many people to mention. And there was so much Divine intervention, as well. You know as well as I, that I’m not that smart and not that talented.
I’m so grateful for all of the assistance that we received. And yes, it was nice to get a complement from Michael Bennet. It just needs to be kept in perspective.
And of course the war on coal continues.
Video from yesterday’s House Committee on Science, Space, and Technology hearing on the Environmental Protection Agency and the Gold King mine spill:
EPA Administrator Gina McCarthy did not appear at hearing.
Cleanup projected to cost at least a buck per gallon spilled, or $3 million.
During the hearing, the EPA commitment to transparency was called into question almost immediately, due to what appeared to be selective editing of a video of the initial moments of the spill, when a worker at the mine exclaims, “What do we do now?”:
The Environmental Protection Agency replaced a doctored video from the Gold King mine spill with the original Wednesday after being called on the discrepancy during a House committee hearing.
Rep. Bill Johnson, Ohio Republican, showed both versions during the hearing before the House Science, Space, and Technology Committee, pointing out that the version posted on the EPA website covers up the voice of a worker as contaminated water spills from the mine saying, “What do we do now?”
EPA spokeswoman Laura Allen said the redacted video was “posted by mistake.”
“The unredacted version was meant to be shared on the EPA website,” Ms. Allen said in an email. “We’ve since removed the redacted version and replaced it with the unredacted version, as was originally intended.”
The quick change is admirable but the question remains–has other information released, including the videos and other documentation, been similarly redacted, edited, or manipulated? Even if it has not, the EPA’s misstep in “bleeping” the comment in the video surely doesn’t endear it to folks already suspicious of the agency’s own review of its conduct and handling of the August spill.
The Gold King mine’s owner was also not impressed by the EPA’s testimony, alleging the agency was, at the very least, misleading:
An Environmental Protection Agency official lied during a congressional hearing Wednesday when he said the agency responded to a Gold King Mine “cave-in” when in fact EPA contractors created the disaster by barricading the mine last summer, the owner of the mine has charged.
“This was a result of cave-ins and water buildup. That’s why we were there at the time,” said Mathy Stanislaus, assistant administrator of the EPA’s Office of Solid Waste and Emergency Response. His boss, Administrator Gina McCarthy, did not attend the first congressional hearing into the Animas River Spill, held by the House Committee on Science, Space and Technology.
Although Stanislaus was grilled on other issues such as transparency and double standards pertaining to non-government spills, none of the representatives drilled into Stanislaus’ claim that the Colorado spill was a result of natural forces.
But his comments weren’t lost on Todd Hennis, Gold King’s owner.
“It’s absolute baloney of the worst sort,” Hennis said immediately after the hearing. “They blocked off the flow of water out of the drain pipes and they created the huge wall of water in the Gold King by their actions last year.”
Two more hearings in different Congressional committees are scheduled for next week.
Speaking of the EPA in the limelight, Hollywood’s toxic avenger Erin Brockovich visited Navajo Nation in the wake of the Animas River spill:
Environmental activist Erin Brockovich, made famous from the Oscar-winning movie bearing her name, on Tuesday accused the U.S. Environmental Protection Agency of lying about how much toxic wastewater spilled from a Colorado mine and fouled rivers in three Western states.
Her allegation came during a visit to the nation’s largest American Indian reservation, where she saw the damage and met with Navajo Nation leaders and farmers affected by last month’s spill, which was triggered by an EPA crew during excavation work.
Brockovich said she was shocked by the agency’s actions leading up to the release of waste tainted with heavy metals and its response afterward.
“They did not tell the truth about the amount. There were millions and millions of gallons,” she said while speaking to a crowd of high school students in Shiprock, New Mexico.
Lack of communication by the EPA and its employees in the aftermath of the spill is a consistent theme, and this Durango Herald piece is no different:
In the wake of the Gold King Mine spill, many questions have been asked and fingers have been pointed at the EPA, the agency tasked with remediating the Silverton Caldera, when it underestimated the pressure behind the abandoned mine, triggering the spill.
One issue the event did expose is the EPA’s lack of protocols for notifying downstream communities in the event of a massive blowout – a point the agency has admitted it was not prepared for.
In a prepared statement, the federal agency said a crew of EPA personnel and hired contractors accidently caused the spill at 10:51 a.m., who were then trapped without cellphone coverage or satellite radios.
It wasn’t until 12:40 p.m., after a mad rush to find the correct personnel and reach an area with phone reception that the EPA contacted by two-way radio a state worker who was inspecting a mine in another area.
The EPA’s protocols mandate it must first notify state agencies in the event of an emergency situation. The EPA’s same statement said the Colorado Department of Public Health and Environment contacted local agencies by 1:39 p.m.
Weld County, the state’s top oil and gas producer, continues to thrive. This includes the county’s more rural parts, bucking a nationwide trend away from rural areas:
Grover and New Raymer are both surviving because of the energy industry, which is a justifiable reason for the residents to live farther out because there are different types of jobs available in the areas. Atop of oil and gas and wind, both towns have people living in their communities who work as ranchers and farmers.
“I think one of the things that’s unique about Weld County is there are multiple industries,” said Julie Cozad, Weld County commissioner and Milliken resident. “Agriculture, oil and gas, and a lot of other companies. The availability of the railway and land helps have any industry here.”
Even for communities like Grover, which is a lengthy distance away and has no gas station in town, the town’s people are not deterred from living there because to them the drive to Greeley or Cheyenne is a reasonable distance and worth the drive.
“There’s enough of a benefit here,” Beerman said. “They see many pros, then cons. People here realize they’re going to have to drive for amenities. We don’t have a gas station in town, but people understand that when you live out here.”
And as for the state’s second largest oil and gas area, Garfield County:
RIFLE — Garfield County has hit another milestone in oil and gas production, with its tally of active wells now topping 11,000, more than one-fifth of the statewide total.
At current drilling rates, though, it could take several years before that number exceeds 12,000. Drilling activity in the county hasn’t been this low in 15 years, and the total number of rigs punching new wells in the region is down to just five — three in Garfield County and two in Mesa County.
Garfield County still remains the second-busiest county in the state for oil and gas activity. Weld County leads the state in well starts this year, at 798. Mesa County is third among counties, with 52 well starts, and Rio Blanco County fifth, with 16.
Coloradans think a greater sage-grouse listing as “endangered” is unnecessary, with local efforts sufficient to maintain the species without precipitating more lawsuits:
The federal government will decide whether to list the greater sage grouse as endangered under the Endangered Species Act later this month.
Another species of the bird, the Gunnison sage grouse, was listed as threatened last November. That experience may offer some lessons about what type of public response the feds can expect.
The Gunnison grouse listing isn’t the strictest classification under the Endangered Species Act. Instead, the listing represented an attempt by the U.S. Fish and Wildlife Service to recognize efforts in Gunnison to protect the bird. But in the end the decision seemed to please no one.
The state of Colorado and Gunnison County sued the federal government because they thought the listing went too far. Some environmental groups sued because they said it didn’t go far enough. Similar lawsuits are expected after the greater sage grouse decision.
What makes Denver’s eco-bike B-cycle successful? Apparently, fossil fuels (compressed natural gas):
The flood of red bikes begins shortly after 7 a.m. As the sun climbs, the tide of work-ready riders rolls into downtown, a pedaling wave threatening to overwhelm a handful of Denver B-cycle stations. But somehow, there are always empty docks. Even as the deluge peaks before 9 a.m., riders find spots for their bikes and everyone is in the office on time.
No one seems to notice the white trucks shuttling bikes away from the stations at the top of 16th Street at Broadway. The drivers swiftly load their trailers and pickup beds with as many as 24 bikes and move them up the hill to B-cycle stations around Capitol Hill.
This perpetual bike-shuffling is an essential balancing act that races against riders to keep Denver’s nonprofit first-mile, last-mile transit system flowing.
Without the efficient, technology-assisted redistribution of the fleet of 709 B-cycles across 87 stations, bikes will clog the wrong places at the wrong time, the system will falter, customers will drop off and sponsors will bail.
Rearranging B-cycles is a mix of art, science, craft and intuition. One bike is shuffled for every seven B-cycle rides.
This week’s “you can’t make this stuff up” entry:
Waste from animals and visitors “has to go somewhere,” Lopez said. “It’s very ingenious to be able to convert it into energy. This is safe. And it is not going to stink up anything.”
But the Sierra Club and neighbors are ramping up opposition, wary of increased noise, pollution, odor and other disruption of park serenity.
“The Sierra Club strongly opposes combustion of municipal solid waste. It has proven impossible for industry to develop a combustion process, even with a large biomass proportion, that does not produce unacceptable toxic and hazardous air emissions,” said Joan Seeman, toxic issues chairperson for the club. “The zoo should recycle their paper, cardboard and plastics, as well as compost, instead of destroying these valuable resources.”
Alternate headline: ‘Sierra Club opposes alternative energy’.
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.