Colorado now ranks as least attractive state for oil and gas investment
June 29th, 2009
Colorado Governor Bill Ritter and the state's Democrat controlled legislature are driving the oil and gas industry out of the state.
Thanks to Governor Bill Ritter and the Colorado State Legislature, the state has plummeted from first to last in a ranking of states’ attractiveness for oil and gas investment. The continually shifting political environment, last minute regulatory changes, punitive measures and rising costs have seen many oil and gas companies close up shop in Colorado and head for neighboring states.
In just two short years, the study from the Fraser Institute says that Colorado now ranks last or second-to-last in six of 16 categories in comparison to the 27 producing states. Our neighboring states of Nebraska, Kansas, Oklahoma, Wyoming and Utah all rated much more favorably.
The oil and gas industry employs more than 70,000 people in the state and provides $23 billion in economic benefit to the state annually. We have already seen the results of the unfriendly environment Colorado has created as many of these companies flee for the friendly environs of our neighboring states.
The Colorado Oil & Gas Conservation Commission (COGCC) says not one permit has been approved in the first 84 days of the governor’s new regulations – a 94% decline over 2008. This is despite the fact the state has more than 9% of the nation’s supply of natural gas, a clean-burning fuel that should be key to weaning our nation off of dependence on foreign oil.
The Colorado Springs Business Journal quoted Colorado Oil & Gas Association president Meg Collins as saying, “This study demonstrates the harsh reality of an inconsistent regulatory regime, and these numbers run contrary to the belief of some policy makers that Colorado’s energy industry will grow no matter the constraints placed upon it. It is clear from this survey that the COGCC’s regulations and other political influences have seriously diminished the industry’s willingness to invest in Colorado at a time when economic development and activity is desperately needed to counter the effects of a slumping global economy. Coloradoans are losing their jobs and our communities are missing out on valuable revenue as a result.”
This comes as no surprise. The anti-business Democrats have shown their disdain for business over the last two years and this simply proves the costs of it. Colorado, under Democratic leadership, is quickly turning into California – and that is not a good thing.
Perhaps the fact that oil has dropped from $150/bb to $60 and natural gas dropped from $12 to $4 has more to do with it than Democrats taking over.
If you haven’t noticed, we’re in a huge recession/depression as well and energy demand is way down. Blaming no new permits on politics is tomfoolery.
Over half the drilling fleet in the gulf of mexico is currently sitting idle and the new administration doesn’t have anything to do with that change either.
Certainly the economic downturn is part of the equation but, if it costs thousands of dollar more just to obtain a drilling permit and you must jump through dozens of regulatory hoops just to get started, the incentive is gone for oil and gas companies. At a time when we should be looking for ways to expand jobs these types of actions put us on a path that prevent job and economic growth.