Vital for Colorado Chairman: "Don’t Let Anti-Science Extremists Destroy Denver’s Economy"

This week, the competing campaigns of environmental activists and industry advocates have been heating up surrounding issues of natural gas development.

Activists are pushing for a moratorium on fracking in the city of Denver, even though most of the state's development projects are well outside of Denver's city limits. The area around the Denver International Airport is one of the few areas in the city limits with any active wells leased out to oil and gas companies.

"Don't Frack Denver" activists say they want to stop the threat of expanding fracking within the city where it could affect their quality of life. They launched their effort on Tuesday by delivering a letter to Mayor Hancock and holding a news conference outside the City and County Building.

Industry advocates say this environmental effort is misguided and is essentially equivalent to "declaring war on Denver's economy."

Vital for Colorado, a leading pro-industry business advocacy group, has issued a news release statement in response, referring to the activists as "anti-science extremists."

"Groups that peddle fear, instead of facts, are out to hurt Colorado's economy and out to reduce the tax base that supports our schools, parks and libraries," said Peter Moore, the group's board chairman.

The oil and gas industry has been a boon for Denver’s economy in recent years. The industry makes up about 20 percent of downtown Denver’s office space, or about 4.5 million of the 22.3 million square feet of available space, according to the Denver Business Journal.

A Hancock spokeswoman said he understood the activist coalition's concerns, but she said he wouldn't consider backing any local action until a state oil and gas task force looking at regulatory issues publishes its recommendations. Those are due Feb. 27.

“Mayor Hancock hears their concerns loud and clear and will continue to work toward a shared goal of preserving our environment and quality of life here in Denver. The Mayor is keeping a keen eye on this issue, and eagerly anticipates the recommendations from the Governor’s Oil and Gas Task Force before any action would be considered on a municipal level. Understanding the Task Force is working on a responsible balance, the Mayor asks for the community and stakeholders to remain patient and allow a thoughtful process to take place.”

Councilman Chris Herndon, who represents northeast Denver, echoed Hancock's comments.

A moratorium effort may be lacking an actual legal footing given that recent state court rulings have overturned other cities' fracking bans.

Fracking, or hydraulic fracturing, involves injecting water, sand and chemicals under high pressure to break up rocks deep underground, thereby releasing oil and gas. The industry says it has been safe for six decades and is subject to intense federal and state regulations that keep it from harming the environment.

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Overall, the oil and gas industry recently contributed $29 billion to Colorado’s economy and helped support more than 100,000 good-paying jobs.

“The oil and gas industry, like any industry, is not perfect, but it operates under some of the most stringent regulations in the country,” Moore said. “It’s been one of the brightest spots in our economy. The facts — and science – are on the side of industry.”

Vital for Colorado is a broad coalition of business and civic leaders formed to support responsible energy development.  More than 35,000 Coloradans, businesses, civic leaders and trade organizations have signed its pro-energy pledge. For more information, go to www.vitalforcolorado.com

U.S. Net Energy Imports at Lowest Level in 29 Years as Domestic Production Keeps Booming

Net energy imports, as a share of U.S. energy consumption, continue to fall due to increased domestic production in areas such as the Bakken Basin, Marcellus Shale region, Eagle Ford shale, and the Permian Basin.  Last week, the Energy Information Administration (EIA) reported net imports have declined to 10.9% for the first six months of 2014 — the lowest level in almost 30 years. Total domestic energy production is currently outpacing the United States ever increasing energy consumption, helping lessen dependence on energy imports, says EIA analyst Allen McFarland.

He continues by breaking out each source of growth by energy type, "The increase in total energy production was almost entirely concentrated in petroleum and natural gas. Petroleum accounted for 52% of the 2014 year-to-date increase, natural gas for 27%, renewable energy for 9%, and nuclear electric power for 2%. In contrast, total coal production fell 1%. The increased liquids production reflects the use of advanced drilling methods, including hydraulic fracturing and horizontal drilling."

Full report published by the EIA:

Total U.S. net imports of energy as a share of energy consumption fell to their lowest level in 29 years for the first six months of 2014. Total energy consumption in the first six months of 2014 was 3% above consumption during the first six months of 2013, but consumption growth was outpaced by increases in total energy production. These changes led to a 17% reduction in net imports compared with the first six months of 2013.

Total energy consumption increased every month in 2014 compared with the same month in 2013. However, 81% of the total increase in consumption came in January and February, reflecting the effect of colder weather during the polar vortex. Natural gas accounted for 55% of the 2014 year-to-date increase, coal for 24%, renewable energy for 12%, petroleum for 8%, and nuclear electric power for 3%. Of the total natural gas consumption increase, the residential and commercial sectors accounted for 69% of the gain, again reflecting the cold winter, while 30% of the increase came from the industrial sector, continuing a long-term trend toward higher industrial use of natural gas.

The increase in total energy production was almost entirely concentrated in petroleum and natural gas. Petroleum accounted for 52% of the 2014 year-to-date increase, natural gas for 27%, renewable energy for 9%, and nuclear electric power for 2%. In contrast, total coal production fell 1%. The increased liquids production reflects the use of advanced drilling methods, including hydraulic fracturing and horizontal drilling. These techniques have led to higher production in areas such as the Bakken Region, Marcellus Region, Eagle Ford play, and Permian Basin, and have greatly increased U.S. oil and natural gas production.

Total energy imports in the first six months of 2014 fell 6% compared with the first six months of 2013, almost entirely because of decreasing petroleum and natural gas imports, which fell 6% and 5%, respectively. Total energy exports increased 8% compared with the first six months of 2013. The increase was almost entirely the result of a 21% increase in petroleum product exports.

Resource Development and Economic Opportunity Go Hand-in-Hand

As the United States slowly emerges from the economic downturn of the Great Recession, pockets of the country have enjoyed a much faster recovery thanks to development of shale oil and natural gas resources. For example, cities west of the Mississippi River have boomed in population and economic growth due to increased energy production in oil- and gas-rich areas of the Great Plains and Mountain West, according an Associated Press report based on new U.S. Census data.

The same data confirm that energy production is one of the fastest-growing industries and an engine for economic growth in the United States. Generally, in locations where energy development occurs, economic opportunity arises and towns and states thrive.

However, economic opportunity has not been limited to just those production areas. The shale boom has also helped American families across the nation through indirect job and economic growth, lower energy costs and higher incomes. In fact, IHS Global Insight estimates that the domestic oil and gas boom created the equivalent of $1,200 of real disposable household income to American families in 2013.

Resources Fuel Our Economy

As the shale energy revolution continues to impact the nation, we are reminded of how energy development is closely correlated to economic activity. In fact, the former House Resources Committee Chairman Richard Pombo (R-CA) said during a hearing in 2006, “The fact is, resources fuel our economy...they are the building blocks of our society. Without them, we produce nothing.”

As Charles Mann noted in his recent The Atlantic article, economic growth and energy use go hand in hand: “According to the National Bureau of Economic Research, the United States has experienced 11 recessions since the end of the Second World War. All but one were associated with spikes in energy costs—specifically, abrupt jumps in the price of oil.”

This strong connection between energy development and economic growth is even more evident when examining economic figures stemming from the U.S. shale boom. According to the consulting and forecasting firm IHS Global Insight, shale development has supported more than two million American jobs and generated $75 billion in federal and state tax revenues. By 2020, IHS estimates, total jobs linked to shale will grow to 3.3 million, and the total impact on U.S. gross domestic product will be nearly half a trillion dollars.

According to energy expert and Vice Chairman of IHS Global Insight, “Shale gas has created hundreds and hundreds and hundreds of thousands of jobs in the last five years in the United States. It's brought $1 billion of revenue into the state government of Pennsylvania…"It does have a transformative impact."

But the economic development doesn’t end there. The boom in domestic natural gas production has pushed down utility prices for customers and bolstered energy-intensive manufacturing, particularly steel, chemical and plastics producers.

Where specifically are we seeing the firsthand positive impacts of the shale boom? Let’s take a look at a few examples from across the U.S.

The Bakken Shale formation covers Eastern Montana, Western North Dakota, and parts of Saskatchewan and Manitoba in the Williston Basin.

North Dakota

North Dakota’s shale energy boom has produced a parallel ripple effect in income, employment and population. The U.S. Bureau of Economic Analysis reported this week that North Dakota’s personal income level grew 7.6 percent in 2013 – the highest among all states for the sixth time in the last seven years.

The report noted the state’s growth is connected in great part to its energy development, the epicenter of which is the Bakken shale formation. Its riches have transformed North Dakota into the second largest oil-producing state in the U.S. after Texas in volume of oil produced, according to the EIA.

The Marcellus Shale formation stretches across western New York, Western Pennsylvania and all of West Virginia, and is the largest shale formation in the world in terms of oil and gas input.

Pennsylvania

Stretching across nearly two-thirds of Pennsylvania, the Marcellus Shale formation has provided significant economic benefits such as lower utility bills, new jobs, economic growth and new opportunity for the state. According to economic reports published by Consumer Energy Alliance over the past two years, a number of Pennsylvania counties have directly seen economic development stemming from production in the Western and Northeast parts of the state.

Bradford County:

Marcellus Shale natural gas drilling has been ongoing in Bradford County since 2008, increasing by 20 percent and attracting national and international investment in the area. The state Dept. of Labor & Industry reported in 2010 that Bradford County experienced the highest increase in employment in any county in the entire state. Shale gas development has reduced unemployment and revitalized businesses and real estate in Bradford County.

Butler County:

The rolling countryside of western Pennsylvania just north of Pittsburgh envelops the abundant Marcellus shale formation whose natural gas development is revitalizing the county’s economy. In late 2012, shale gas revenue channeled $4.3 million to Butler and neighboring counties. In first quarter 2013, Butler County ranked in the top 50 counties in the nation for wage growth, according to the U.S. Bureau for Labor Statistics. Shell Chemical’s plan to build a multi-billion dollar ethane cracker plant in nearby Beaver County is expected to endow the region with additional business growth.

Washington County:

As one of the most active Marcellus natural gas production areas, Washington County has attracted national and international investment in the area. An increase in population and demand has brought a business boom for the service, transportation and tourism fields. Shale gas development in Washington County has helped to lower unemployment, boost average earnings and increase business growth outside the energy market.

The Green River Formation in Colorado, Wyoming, and Utah holds the world’s largest oil shale deposit. The Niobrara Formation’s most productive zones are in the Denver-Julesberg basin of northeast Colorado and southeastern Wyoming.

Colorado

Colorado promises to be an emerging locale for prosperous shale development, as companies are increasing their footprints and adding more jobs to the region. The U.S. Department of Energy estimates that 80 percent of recoverable oil shale in the Green River Formation is located in Piceance Basin in northwestern Colorado. The largest energy-producing county in Colorado is Wattenberg Field, located in the Niobrara Shale Formation in the Denver Basin.

The natural gas and oil riches of the Niobrara and Green River formations are sparking many job opportunities. Colorado’s energy industry employs 110,000 people and contributes $29.5 billion in economic activity. The Colorado School of Mines saw increased enrollment in its Petroleum Engineering Program from 30 to 200 in 10 years. Some two-thirds of the school’s graduates, no matter their major, work for oil and gas companies upon graduation with an average starting salary of about $90,000 a year.

A Bright U.S. Energy Future is on the Horizon

With the Energy Information Agency (EIA) forecasting that U.S. crude oil production will approach a record by 2016 and natural gas production will increase 56% between 2012 and 2040, it’s clear that tremendous opportunity for the nation lies ahead.

Through the availability of abundant energy resources across the nation and new energy production technologies, energy will continue to fuel the U.S. economy for years to come. But that opportunity will only remain on the horizon if the U.S. continues to promote access to these resources. Whether it is oil and gas, coal, wind, solar, and other renewables, there must be both access to the resources and reasonable regulation, as well as a focus on producing energy in a way that is responsible and acceptable to the public. By following this path, the United States will remain a leader in energy and economic prosperity for years to come.

Kristin Schrader Marcell is former House Resources Committee staff member and political appointee for the U.S. Department of Transportation. She is a public affairs consultant that focuses on the energy and transportation industries.

Creating Compromise Over Alarm in Arapahoe County [VIDEO]

Over the past year, Colorado has become entrenched in a debate about hydraulic fracturing. Extreme environmentalists have been injecting fear into local communities while resolute oil and gas development enthusiasts refuse to acknowledge any concerns. The real debate and where the most positive outcome can emerge is from Colorado's pragmatic middle. Of course we all love this state, it's why we live here. We love to ski, fish, bike and play in parks; but we forget how and why we're afforded such pleasures. We forget that we have to drive up to our favorite resort, fill our boat that will take us to that honey-hole on the lake, and buy that perfectly made bike to fit our frame to race around the park. So we have to be reasonable. We have to consider our roles and responsibilities as it pertains to our states energy development.

In just a few short weeks primary elections will start and the issue of local control will show it's face on the ballot. While communities should be concerned over any type of industrial development in their communities, performing due diligence and understanding that development is important. Those most concerned over the issue have little to no development in their counties but have helped create and spread illogical fear across the state.

In an attempt at cooperation, Arapahoe County unknowingly set a precedent by working together with environmental organizations, academicians close to the energy process, operators, local officials and community members, to create a reasonable outcome that benefited the community through a set of rules and guidelines for energy development within its limits. It didn't happen overnight - but nothing truly good can - it took them two years. There was however, no ballot measure, no ban, no moratorium. Proof that things can get done when people truly engage for the good of everyone.

So the questions is, if the alarmist concerns of one community out-weighs the reasonable compromise of another, are we prepared for what unintended consequences will arise here in Colorado?

Oil and Gas Development: Transparency and Community Engagement

The oil and gas industry’s rich and colorful history continues to serve as a reminder of the luxuries we now have access to because of energy. It is a show of our accomplishments and the progress that has been made because of production. Without it, the current backdrop of the American lifestyle and those of many other large cities and cultures in countries across the world would not be possible. [youtube width="560" height="315" video_id="aQEhvU1bEmY"]

Energy is a necessity. It affords everyday citizens access to thousands of products, delivers vital electricity and is pertinent to producing heavy metals that support manufacturing and resource production around the world. The latest advancements in energy have focused on increasing production, creating energy efficiency, new technological developments like hydraulic fracturing, conservation and environmental stewardship.

These advancements, specifically hydraulic fracturing, have led to the oil and gas industry being able to quickly develop the vast reserves that are available, providing Americans access to cheap fuel. Simultaneously this development has given America a glimpse into what true energy independence and security could really look like. With these advancements also comes concern. Currently there is a low hum amongst stakeholders sharing concerns and uncertainty about domestic oil and gas development. “Trust in the government and with companies has eroded, and is at our feet while we’re trying to develop these resources,” said Doug Bannerman, Head of Social Responsibility for Statoil.

As exploration, production and development have ramped up across the industry, communities large and small are now feeling very effected by oil and gas companies coming into their cities and towns. For decades, most people didn’t care where their energy or products came from, but within the last 10 years citizens are becoming increasingly involved, petitioning for moratoriums, bans, new regulations and policies that directly effect the industries ability to maximize energy development.

“The oil and gas industry is frequently defined by the lowest common denominator,” said Tanuj “TJ” Deora, Director, IHS Energy and Environmental Initiatives. Most of the arguments against development are polarized, laden with emotion and are amongst the fringe. These fringe groups are expanding everyday and are using one-sided arguments rooted in fear to spread their message. This side, no matter what proof is given has closed the door to arguments that don’t fit their narrative. Their conversations are entrenched in absolutes. The narrative doesn’t have any room for educational or constructive dialogue because their space that won’t expand to hear the other side.

This type of opposition has become an increasing focus for concern, not just to oil and gas companies across the nation, but to leaders, communities, and individuals who see the benefits that oil and gas development has brought to counties like Bradford in Pennsylvania or Weld in Colorado but also to states like Ohio and North Dakota. Unfortunately those driving the fear-based conversation are not concerned with economic stats and figures, their perceived costs of doing business are air and water.

It’s been said that “whiskey is for drinking and water is for fighting over” and an increasing amount of this opposition see only this window of the conversation. But the conversation shouldn’t have to be between environmental quality and job creation. Citizens shouldn’t have to choose, but they should choose to be educated about each facet of development that could effect them.

“Our future energy supplies rely upon hard decisions,” said John Hofmeister, Former President of Shell Oil Company, and many leaders agree. In most conversations I’ve been a part of, leaders within the energy industry and in organizations like the Nature Conservancy believe that education and cooperation are the key to our energy future. “The public often doesn’t realize that we are all interdependent on oil and gas resources,” said Tisha Conoly Schuller, President and CEO of the Colorado Oil and Gas Association, “so everything from heating our homes to our personal transportation; all of commerce, all of the food how it gets to our communities and how water gets to our homes is all part of oil and gas development.”

Most of the concern has centered on hydraulic fracturing. However, hydraulic fracturing isn’t new, in fact the completion technique has been used since 1947. It has only been since new technological advancements made in the late 90s that hydraulic fracturing has really amplified the amount of recoverable hydrocarbons that can be extracted from a single well. While the industry sees this as a necessary and critical advancement, just the moniker “fracking” lends to a negative connotation to those who are not in the industry.

With close to 115 million households all relying on power, food and fuel for their daily lives, it is important that citizens and producers are all transparent and working to become educated and more informed. If people within the oil and gas industry aren’t going to put the facts out there, someone will. The opposition will feed on the perceived lack of transparency, accountability and respect and then who will keep these people honest? It seems now that the accountability of the opposition is with the oil and gas industry, leaving its fate in its own hands. So the question becomes, what will the industry do to move forward and engage not just communities but the country as a whole?

Rena Schild / Shutterstock.com

Facts, Science Should Drive Fracking Debate

For the past few years we've seen environmental activists take a greater role within Colorado communities and impose ideologically extreme agendas onto local residents. Fear mongering and distorting the facts are their specialty, and many locals don't see what's happening until it is too late.

Alarmist claims by activist groups have led to oil and gas drilling moratoriums that are passed out of panic and based on opinion, not science. These extremists don't care if they put people out of work and send Colorado into an economic recession. Fractivists, as they have come to be known, would have the public believe that the jury is still out on whether the process of hydraulic fracturing is safe. If you're someone who doesn't believe in science and still thinks the earth is flat, than this may seem like a reasonable perspective. For the rest of us, however, it is simply impossible to ignore the facts.

Fact: over one million wells have been safely fracked in the U.S. since 1947. Fracking takes place a mile below the surface and thousands of feet below Colorado's drinking water table. Several layers of cement and steel are used to protect groundwater sources, and fracking fluid is 99.5 percent water and sand. Oil and gas companies work with engineers, wildlife biologists, geologists and environmental experts before a well is ever fracked. This is to ensure that the health and safety of the environment and local residents is protected. EPA administrator Gina McCarthy even told the Boston Globe "there is nothing inherently dangerous about fracking."

The leaders of the anti-fracking movement sweeping through Colorado don't care about any of that. A simple Google search will show that their true intentions are actually hidden from every day Coloradans.

Former Erie Mayor Joe Wilson told The Daily Camera in 2012 that he believed the town's board of trustees was given false information on air quality before voting on a 180-day moratorium on new oil and gas development. Erie town officials ended up commissioning their own air quality studies, which proved there was no danger.

As environmentalists work to ban fracking in our state, I urge voters to get all the facts before making a decision. Coloradans have the right to hold oil and gas companies accountable and make sure they're following all the rules. This is part of the deal - you drill in our backyard, and we hold your feet to fire. What we don't need are roaming bands of fractivists muddying up this issue with insincere hysterics and outright lies.

Colorado is host to some of the most well-educated residents in the nation. Thirty-second sound bites have rendered some of the brightest among us to believe half-truths and distortions. Please do not make this important issue one of those times where you are swayed by those that would like to see this industry shut down.

Do your research and realize that while this industry no more deserves a free pass than any other, they also deserve the ability to provide energy here in America, reduce our foreign dependence, and create good, stable, well-paying jobs for Coloradans.

Initiative 75 in Colorado Loses Steam, Dies with Lack of Signatures

Another oil and gas directed initiative was pulled today by the Colorado Community Rights Network. The group said it needed more time to organize. "We didn't have much time to get set up, but we're going to come back next time (for the 2016 election) a lot stronger, with a larger organization, more signature gatherers and more money," said Lotus, chairman of the organization in a quote to the Denver Business Journal.

Initiative 75 was a community rights led initiative that would have given local control to communities as a right to self-governance. The initiative was couched in the hydraulic fracturing debate but ultimately had unintended consequences to grow communities and provide job availability.

While Initiative 75 is now at a stand still until the group can "reorganize and collect more money in 2016", Initiatives 88 and 89 are still in motion. Like all matters pertaining to amending the Colorado Constitution, it is important as citizens to understand just what the rules mean. Below are links to learn more about these initiatives and to read more about Colorado Community Rights Network decision to halt Initiative 75.

Read more about Initiative 88 here.

Read more about Initiative 89 here.

For more on the halt of Initiative 75 in the Denver Business Journal, click here.