2,500-Foot Setback Initiative Probably Won’t Make the Colorado Ballot: Wells Fargo

“But if the measure were to be placed on the general election ballot, then it’s a toss up”

Several groups and individuals want to halt, ban or eliminate hydraulic fracturing in Colorado by running signature gathering campaigns to amend the state’s constitution (Initiatives 63, 75 and 78). The state requires 98,492 valid Colorado voter signatures to get an initiative onto the November ballot. These valid signatures must be in the Colorado Secretary of State’s office by 3 p.m. on Mon. Aug. 8, 2016.

Source: Colorado Secretary of State

After the petitions are turned in to the Secretary of State, his office has until Sept. 7 to validate signatures and release the results.

Wells Fargo believes the “timing is uncertain, as we could get word this week that not enough signatures have been collected, or it could be in 2-3 weeks once the Secretary of State certifies signatures, or it could even be later than that if Colorado businesses choose to challenge signatures/the certification process,” the bank said in a research note today.

Wells Fargo said it doesn’t believe the anti-frac initiatives will make it to the ballot. Some industry players agree.

Wells Fargo, Energy Industry Representatives Say Issue Won’t Gather Enough Signatures

“We continue to believe that Initiative #78 (Setback proposal) will not garner enough signatures to make the November ballot. A recent influx of campaign contributions (updated last night [8/1]) causes us to pause, but our stance is that it’s not enough and it’s a little too late.

“Our best guess is that as of early last week, between 50,000 and 60,000 signatures have been collected, though there is a significant lack of transparency on this figure. This would mean that given historical signature verification rates, at least another 70,000 signatures would need to be collected in 2 weeks. The recent influx in campaign funding, however, injects a little more uncertainty into the process.”

Donations Supporting the 2,500-Foot Setback have been Pouring In

Numerous contributions in support of the anti-fracing initiatives are hitting the state’s campaign donation website. Donations were reported as $147,000 for the most recent period—June 23-July 27, 2016.

The money to stop fracing comes in all shapes and sizes, both cash and in-kind. Colorado’s campaign donation website, updated yesterday, reports numerous $5, $10, $25 and $50 donations for the most recent 5-week reporting period, but there are also some bigger donations from enviro groups outside the state including Greenpeace and 350.org.

Source: Colorado Secretary of State

Expenses Adding Up

Expenses reported for the Yes on 78 campaign during the recent period were $118,239 in petitioning fees alone.

Source: Colorado Secretary of State

Looking at the uptick in donations, Wells Fargo said that as of June 22nd, total contributions to the Yes For Health And Safety Over Fracking (Yes on 78) campaign, as per the state filing, were $91,225. “Thus given the needs for at least another 70,000 signatures, assuming signature collection at $3-4 per signature under normal circumstances, the group would need another $245,000 (70,000 x $3.50 per). And that number could be light based on $ per signature collection levels which typically rise as we get closer to November.

“So as of yesterday morning, it looked like a long shot. However, late yesterday afternoon, the state filings (for the period ended 7/27) were updated and an additional $147,500 in contributions have been added since the last June update.

“In total, $238,700 has now been contributed to the Yes on 78 campaign. And the recent surge in funding confirms some of the rumors that national organizations like Greenpeace have stepped in to assist,” the bank said.

Pro-Industry Groups Operating at Full Speed

Seeing the anti-oil and gas initiatives gaining donations and signatures, local pro-business groups have dug in their heels.

“We welcome anyone willing to publicly oppose these extreme measures that would eliminate responsible oil and natural gas development and let the government take private property without compensating the owners,” Protect Colorado spokesperson Karen Crummy said.

Other groups joining the battle to defeat the initiative include Coloradans for Responsible Reform, a pro-business political action group dating back to the 1990s.

The Anti-Frac Movement is National

From a Greenpeace press release:

“Have you heard about the anti-fracking movement happening in Colorado?

“Currently, Greenpeace and several local groups are working to effectively end most of the fracking that is happening in the state. This is such a big and important movement!

“There are two initiatives that we are working to get on the ballot in November, initiatives 75 and 78. Initiative 75 enables local governments to regulate or ban entirely any oil and gas development in their community. Initiative 78 establishes a buffer zone between oil and gas development and houses, hospitals, playground and many other community areas. Both of these initiatives give the control to the local community to decide and regulate how they want to address fracking.

“The initiatives need 120,000 signatures to qualify for the November ballot and if we can complete this goal, it would be a HUGE victory for people against the industry. Greenpeace and volunteers are working non-stop to win this fight, a fight that’s worth fighting for,” the release said.

Raise the Bar

On the pro-industry side, a campaign called Raise the Bar Protect Our Constitution has made headway against the anti-oil and gas constitutional amendment approach. According to the organization’s website, “this initiative is simple and has two basic parts. First, an increased signature requirement, and second, a higher bar for changing our Constitution.

“Colorado law requires gathering nearly 100,000 signatures to place a Constitutional amendment on the ballot. This initiative would require that those signatures be collected from each state senate district across the state. Specifically, proponents of a Constitutional amendment would need to collect signatures from 2% of registered voters in each of the state’s 35 senate districts to place the initiative on the ballot.

“Once on the ballot, the bar would be set higher to pass a Constitutional amendment compared to a law change. In order to amend the state Constitution, ballot issues would need 55% of the voters to pass instead of a simple majority.”

Colorado Gov. John Hickenlooper endorses the Raise the Bar initiative.

Industry Representatives Believe the Anti-Oil and Gas Initiatives Won’t Get Enough Signatures

Oil & Gas 360® Spoke with representatives of oil and gas companies with major operations in Colorado.

“We continue to hear they are short of their goal,” one executive, who requested not to be directly quoted, told Oil & Gas 360®.

“There have been several other initiatives that have impeded their ability to get the number of signatures they need. Raise the Bar has had a significant operation running at the same time. What we have been hearing is that as recently as two or three weeks ago, the [anti-oil and gas petition] circulators are still trying to gather 42,000 valid signatures. That means they still need to collect 60,000 in the macro-group to account for invalid signatures.”

The deadline to turn in signatures is 3:00 p.m. August 8th.

Denver based PDC Energy (ticker: PDCE) describes the industry’s handling of the forced setback initiative in its recent investor presentation as an “ongoing, sophisticated, robust, well‐organized and well‐funded industry campaign.”

Source: PDC Energy Presentation