Several Colorado ballot initiative groups turned in their collected signatures on petitions today by the 3:00 p.m. deadline.
For the oil and gas industry, the Colorado Secretary of State has reported that initiative No. 75, which would cede control over oil and gas operations to local governments, essentially sidelining the authority of the state, and initiative No. 78, which would require a mandatory 2,500-foot setback for all new drilling and related operations, have had petitions turned in to the Secretary of State.
Both initiatives seek to stop or limit oil and gas development in the state by amending the Colorado constitution. The present laws in place put regulation over oil and gas, including permitting and rules enforcement, in the hands of the Colorado Oil and Gas Conservation Commission. The current setback is generally 500 feet from occupied structures.
Petitions for Initiative 96 which, would make more stringent the requirements for initiated constitutional amendments, were submitted on Friday, Aug. 5. If this initiative passes, the ease of collecting signatures to amend the constitution in only one or two municipalities would be replaced by requiring signatures of voters in all senate districts statewide.
Oil and gas related proposed amendments have been in the news for the past few months, with various groups pointing to the dire economic consequences that would result from shutting out the tax revenues and general economic prosperity derived from the oil and gas industry developing Colorado’s shale resources.
The Colorado Oil and Gas Conservation Commission produced a study that showed that if Amendment 78 gets on the ballot in November and is voted to become an amendment to the Colorado constitution, 90% of the surface area of the state would be prohibited from new drilling and activity. The University of Colorado said the economic result to the state would be just short of a recession.
The Secretary of State has until Sept. 7 to certify the signatures on the petitions, or indicate a lack of certified signatures. In a research note following the announcement, Wells Fargo said that it “could be a month before we get a final decision on whether they’ll be placed on the November ballot.”
The Gloves are Coming Off
Immediately after the news of the petitions went out, a group called Coloradans for Responsible Reform Planning issued a press release: “Coloradans for Responsible Reform Planning “Hardnosed Effort” to Defeat Initiatives 75 and 78.”
“Directly or indirectly, almost everyone in Colorado will feel the effects economically from a major shutdown of oil and gas. It merits a hardnosed effort to reject these extreme measures and Coloradans for Responsible Reform is ready,” said CFRR spokesman Dan Hopkins.
“Initiative 78 is a devious attempt to run oil and gas out of Colorado. It would virtually eliminate all energy development by radically increasing the setback distance to 2,500 feet – 450 acres. It would be the equivalent of a complete ban, which is really their overarching goal in Colorado and the nation.”
“The twin sister to 78 — initiative 75 — likewise seeks to ban energy development through equally deceptive means by taking the decision to shut down oil and gas out of the hands of 3,000,000 voters and putting it in the hands of just two or three people on a county commission or town council,” Hopkins said.
CFRR describes itself as a non-partisan coalition that has been involved in eight issue campaigns, including the passage of Referendum C in 2005, which allowed crucial investment in infrastructure and education and the defeat of the “ugly three” initiatives in 2010, which would have crippled government at every level. CFRR co-chairs include Ken Salazar, former U.S. Senator and Secretary of the Interior; Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce; Tom Norton, Mayor of Greeley, former president of the Colorado Senate and former executive director of CDOT; Diane Schwenke, president and CEO of the Grand Junction Chamber of Commerce; and Wellington Webb, former Mayor of Denver.
Analyst Commentary
From Wells Fargo Equity Research
E&P: Colorado Regulatory Update:
#78 and #75 Submit Signatures
Keypoints
• Summary. Signatures submitted for proposed ballot initiatives #75 (local control) and #78 (setback) to Colorado Secretary of State’s office. We counted about 125 boxes in total between #75 and #78, with a roughly even split, and anecdotally heard from a Greenpeace associated individual that each initiative had gathered north of 100,000 signatures, versus a requirement of 98,492. Our initial read is that there is enough to move forward with the signature verification process. To be clear, submitting signatures doesn’t mean they’re on the November ballot. What it does mean is that the process moves forward. Could be as soon as a week or two, or could be a month before we get a final decision on whether they’ll be placed on the November ballot. We see this as a negative for DJ-exposed names including PDCE, BBG, SYRG, WLL, and to a lesser extent APC and CRZO.
• Next Steps. It could be as soon as 1-2 weeks or as long as 30 days before the Colorado Secretary of State’s office announces whether #75 and/or #78 received enough signatures to be placed on the November ballot. Within this note we go through the process in greater detail.
