State's oil and gas leaders make the case against increased drilling setbacks

Ballot measure threatens state's shale boom

DENVER -- The state of Colorado's energy industry is bright, but threatened.

That was the message during the annual State of Colorado Energy luncheon Thursday.

Former Interior Secretary Ken Salazar and President and CEO of the American Petroleum Institute (API) Jack Gerard used the forum to argue against an increased setback limit being proposed through a state ballot measure.

"It puts 80 percent of the oil and gas opportunity in this state off limits. Think of what that does," said Gerard.

Initiative 97 would increase the current setback requirements for new wells to 2,500 feet from homes and schools. That's five times the current setback, which requires new wells to be 500 feet from houses, and 1,000 feet from schools.

The annual luncheon came days after Colorado's Democratic party backed the controversial ballot measure to limit fracking. Even though their own candidate for governor, Jared Polis, has not supported it.

"I believe they took, in my view, an irresponsible position," Salazar told the crowd. "If it were to pass it's fundamentally unconstitutional."

"I definitely think it's misguided and shortsighted," said Tracee Bentley, Executive Director of the Colorado Petroleum Council.

The measure has the potential to cripple an industry that provides more than $31 billion a year in economic benefits in the state, including $434.7 million in property taxes, and nearly 233,000 jobs, according to a study from API.

"Huge hit to our economy, and certainly to consumers so we're taking it very seriously," said Bentley.

Supporters of initiative 97 argue the increased setbacks are necessary to protect public health and the environment, especially as new drilling activity continues to move into neighborhoods and close to schools. Backers are trying to gather enough signatures ahead of an Aug. 6 deadline to make the November ballot.

Colorado is now the seventh largest U.S. producer of oil, and fifth largest producer of natural gas. The state is also home to three of the nation's largest oil fields.

A shale boom, the industry said, is now threatened by the ballot measure.

"I don't believe the average Coloradan will support it. In fact, I believe once they learn more about what it really does, they'll be strongly opposed," said Gerard.

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