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The deal behind Colorado’s oil and gas deal: No new drilling policies until 2028

Here is a drilling rig south of Durango in 2016. (Jerry McBride/Durango Herald file)

A grand bargain Gov. Jared Polis announced last week isn’t only intended to avert the current showdown over oil and gas development in Colorado.

The political truce is engineered to prevent any additional laws or ballot measures targeting drilling or hydraulic fracturing until 2028 — well into the term of the state’s next governor. That means the agreement, if approved by lawmakers, could freeze Colorado’s approach to fossil fuels for almost four years to allow for the full roll-out of its policies and regulations.

At the center of the deal are two bills: one to raise millions for public transit through a new oil and gas production fee and another to require the fossil fuel industry to cut its contribution to ground-level ozone pollution. Democratic lawmakers are now racing to approve the measures before the legislative session ends Wednesday.

Each proposal passed an initial committee on a party-line vote this past Thursday.

To clear a path for the measures, lawmakers have already scrapped a package of tougher air quality proposals submitted earlier in the legislative session. The oil and gas industry and Colorado’s leading environmental groups also agreed to withdraw plans to put a competing slate of initiatives before voters in November, recalling earlier oil and gas peace agreements struck in 2014 and 2020.

Deal already shaping final rush of policymaking, but duration of armistice is less clear

This past Thursday, Shelby Wieman, a spokesperson for the governor’s office, said the agreement included a moratorium on any new ballot measures or legislation related to oil and gas production through the end of 2027. That timeline, she said, is meant to ensure the state has time to implement the package.

The governor’s office also noted three of Colorado’s largest oil and gas producers — Occidental Petroleum, Civitas Resources and Chevron Energy — were part of the agreement along with a coalition of eight leading environmental groups. Those include Earthjustice, Conservation Colorado, the Southwest Energy Efficiency Project, GreenLatinos, CoPIRG, Earthworks, Western Resource Advocates and Healthy Air and Water Colorado.

Jessica Goad, the vice president of Conservation Colorado, said both sides of the deal signed on to the moratorium. At the same time, she said it was a verbal agreement with no written proof confirming an exact timeline.

Meanwhile, all oil and gas companies reportedly involved in the agreement either declined or did not respond to a request from CPR News to confirm the oil policy pause. Protect Colorado, the political group pushing ballot measures on behalf of the industry, also would not confirm a list of proposed ballot initiatives it plans to kill as a part of the deal and whether the informal agreement is designed to hold until 2028.

Late-session political agreement frustrates both climate advocates, oil and gas companies left out of negotiation process

Lucy Molina, an environmental activist who lives just blocks from Suncor Energy's refinery in Commerce City, was furious the agreement led lawmakers to drop proposals for tougher pollution enforcement. In her view, industrial emissions make walking to public transit stops in her neighborhood dangerous. Any serious effort to help her community, she said, can’t prioritize tailpipes above smokestacks.

By pausing any new oil and gas policies for three years, Molina said the agreement will allow Colorado’s climate goals to slip further out of reach and guarantee ongoing pollution exposure in communities of color.

“These organizations don’t speak for me and my community,” she said.

Other environmental justice advocates said the agreement was the best outcome given the threat facing climate groups. Ean Tafoya, the state director of GreenLatinos, was involved in the discussions with the oil and gas industry, which had threatened to run multiple ballot initiatives climate groups feared could roll back a long list of environmental laws and regulations.

"We were put in an unfortunate situation," Tafoya said. "This agreement has significant gains for disproportionately impacted communities across the state, and it helps people who are the most dependent on transit."

In the committee hearing this past Thursday, Jan Rose, an environmental activist speaking on her own behalf, encouraged lawmakers to oppose the legislation until they understood the full extent of what she called a “backroom deal.”

“They have agreed not to run any oil and gas legislation until 2028,” Rose said. “That affects all of you as legislators, so I’d encourage you to request from the governor a copy of this Faustian bargain.”

The hearing revealed small oil and gas operators were also unaware of the negotiations. Ed Ingve, the owner of Renegade Oil and Gas, appeared before lawmakers in his work gear, which he said was necessary due to the rapid introduction of both bills involved in the deal. He then blasted the agreement as a “tax” on rural businesses fashioned almost entirely in secret.

“When did the environmental groups all of a sudden come running to support Big Oil?” Ingve asked. “This is bizarre. You guys have been collaborating on this for a long time and never allowed stakeholders to jump in and vet this.”

Other representatives of Colorado’s oil and gas industry were far less critical. Dan Haley, the CEO of the Colorado Oil and Gas Association, suggested the overall agreement could provide a “meaningful period of stability and predictability” to allow the state to finalize and implement pending regulations. If the legislation allows for such a pause, he told lawmakers it would count as a win for Colorado.

“We want to know what the rules are so we can comply with them,” Haley said.

To read more stories from Colorado Public Radio, visit www.cpr.org.