The Washington PostDemocracy Dies in Darkness

Intense fight over Colorado oil and gas setbacks could end with national precedent

An oil derrick sits inside a housing subdivision in Dacono, Colo., one of the many places where energy development is coming up against burgeoning communities. (Helen H. Richardson/Denver Post)

DENVER — A years-long fight over how close oil and gas drilling can safely be to places where people live and work is coming to a head with an unprecedented November ballot measure that would ban such operations within at least half a mile of homes, schools, businesses and waterways.

Proposition 112 is pitting homeowners against Fortune 500 companies and even neighbor against neighbor. The stakes involved are immense in a state that is the nation’s seventh-largest oil producer and fifth-biggest supplier of natural gas.

Opponents say increased setbacks would put tens of thousands of people out of work, plunge Colorado into a recession and jeopardize U.S. energy independence. An industry-backed political action committee, Protect Colorado, collected about $33 million through Sept. 26 to defeat the initiative. That sum, which dwarfed the amount the other side raised, has made Proposition 112 one of the most expensive referendums in state history.

Proponents counter that industrial operations pollute the air and threaten health and safety. Colorado Rising, the committee leading the effort, has highlighted more than a dozen fires, leaks and explosions since 2017. Several have been deadly, and the loss of life is one likely reason Proposition 112 supporters succeeded this time in getting enough signatures to put Initiative 97, which will appear as Proposition 112, on the ballot.

As the Nov. 6 midterm elections near, both sides are going door to door and holding rallies, especially in the most populous counties near Denver. Most Coloradoans vote by mail, and they’ll start receiving their ballots this week.

According to Tracee Bentley, executive director of the Colorado Petroleum Council, the state is considered “a bellwether.” If Proposition 112 were to pass, she said, “we are certain we would see it pop up in a couple years in other oil-and-gas-producing states.”

The showdown comes as applications to drill in the shadow of the Rockies tripled in the past year and oil production hit record highs. The nation’s fourth-largest oil field based on proved reserves lies beneath the Front Range here, ensuring that more rigs will go up in metropolitan areas dealing with historic growth.

Current law requires wells to be set back 500 feet from homes and 1,000 feet from schools. The referendum would push that to 2,500 feet and allow local governments to move it even farther away.

In neighborhoods decked out for Halloween, parents armed with cellphone pictures of playground slides framed by oil and gas equipment have passed out fliers and yard signs urging residents to approve greater setbacks.

“This isn’t something that happened overnight,” said Heidi Henkel, a mother who lives in Broomfield, about half an hour north of Denver, and spends 40 hours a week campaigning around the state. “People have been fighting this for at least seven years — this is about science versus greed.”

Fifteen miles to the southeast, oil and gas workers in the Denver suburb of Commerce City downed tacos, quesadillas and margaritas at a recent rally sponsored by business groups encouraging employees to help defeat the initiative.

“I’m a single dad with three kids, and the support I’ve been able to give them comes from working in oil and gas,” said Anthony Pullol, an equipment operator with Liberty Oilfield Services. “There’s a lack of knowledge about what precautions we take for the environment versus other states.”

Outgoing Gov. John Hickenlooper (D) frequently touts what he calls the toughest restrictions in the nation on methane emissions, disclosure of chemicals used in hydraulic fracturing, or fracking, and groundwater monitoring. The Colorado Oil & Gas Conservation Commission enacted numerous rules regulating energy production in the past decade.

Each side in the Proposition 112 debate says it has the backing of science. Residents point to peer-reviewed research showing health risks such as cancer, respiratory problems and congenital birth defects from toxic oil and gas emissions. Energy groups cite a Colorado Department of Public Health & Environment study of 10,000 air samples in oil and gas areas that found “all measured air concentrations were below short- and-long-term safe levels of exposure for non-cancer health effects.”

The state’s gubernatorial candidates, U.S. Rep. Jared Polis (D) and state Treasurer Walker Stapleton (R), oppose the ballot measure because they say it would effectively ban drilling. Regulators concluded that it would put 85 percent of state- and privately owned land off limits to energy exploration. Given the huge role oil and gas play here — a report by the American Petroleum Institute found that the industries contribute $31.4 billion a year to Colorado’s economy and $1.2 billion in public revenue — many officials fear the budgetary repercussions.

Municipalities and school districts stand to lose millions of dollars. Weld County, just north of Denver, produces 91 percent of the state’s oil and received $73 million in tax distributions between 2008 and 2016, state records show.

If Proposition 112 passes, taxpayers would be forced to pay more for capital improvement bonds funding new fire stations and equipment, said Don Warden, the county’s finance director. Energy companies pay most of these costs now.

Yet supporters of the measure note that the state is “currently giving more money to the industry than it is receiving in severance tax money” because of lower oil and gas prices and a 2016 Colorado Supreme Court ruling that required the state to issue about $120 million in refunds to energy companies.

The national implications of the initiative became clear in August when proponents turned in the petition signatures to place it on the ballot. Energy stocks plunged, wiping out almost $3 billion in market value for five companies plumbing Colorado’s fossil fuels.

The state has about 55,000 active wells today, almost double the number in 2007. That’s really when the acrimonious debate began, as fracking unlocked energy reserves located miles below the surface and wells moved closer to cities hugging the eastern foothills. Residents responded by voting for legislation that placed moratoriums or bans on such development.

In 2016, the Colorado Supreme Court threw out measures in the cities of Fort Collins and Longmont because state regulations preempted them. Undeterred, residents quickly sought to place an initiative on the ballot that mirrored Proposition 112. They were unable to collect enough signatures.

The court heard oral arguments Tuesday on another energy-related lawsuit. The Martinez case, as it is known, will determine whether state regulators must put public health and the environment first when permitting oil and gas operations.

The dangers weigh heavily on the minds of residents in Broomfield, where Extraction Oil & Gas is readying to frack at least 70 wells on the edge of recently built suburbs. Abandoned wells lurk beneath communities here, including one where Laurie Anderson lives with her husband.

“Soon there will be 19 wells that I will be able to see from my home,” she said, gesturing to a vacant lot covered with yellowing prairie grass located just 500 feet from her neighborhood. “The worry about health and safety is leading to stress and anxiety and lots of sleepless nights.”

Others weigh different considerations. Energy groups emphasize that more than three-quarters of the up to 43,000 Coloradans who they say could lose their jobs in the first year of Proposition 112 include teachers, hotel and restaurant employees, and truck drivers.

“I never thought I would be on TV,” said Gary Arnold, a business manager for Pipefitters Local Union 208, who appeared in a recent Protect Colorado ad during a Denver Broncos football game. “I don’t want people to forget the faces of industry and how many blue-collar workers this would affect.”

Many Coloradoans also own mineral rights that are separate from surface land ownership. Mineral owners say Proposition 112 puts at risk royalties they rely on to pay medical expenses and other necessities. They say that if the initiative passes, taxpayers should be required to reimburse them.

“There are plenty of attorneys who are waiting to see how this all turns out,” said Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners. “If the state does enact this, and the state legislature doesn’t do something to repeal or amend it, get ready for big lawsuits.”