The oil and gas industry is doing what it does best — maximizing its profits at everyone else’s expense while complaining loudly that it is being treated unfairly. Such gall. Industry profits are at an all-time high, lead by Exxon-Mobil which posted an annual profit of $40 billion. But if a Colorado legislator suggests raising Colorado’s exceedingly low severance tax (1.9 percent after deductions; Wyoming’s rate is 11.2 percent and New Mexico’s is 7.6 percent), industry lawyers, lobbyists and leaders complain bitterly that this increase, when added to rule changes, will cause industry to leave Colorado.

At Colorado Oil and Gas Conservation Commission (COGCC) rule-making discussions, roughly half the 40 participants are oil and gas attorneys and lobbyists who take turns denying the need for new regulations and complaining that rule changes, such as making reclamation bonds reflect the true costs of clean-up, will put oil and gas companies out of business. This is the same industry that regularly underpays royalties to mineral lease owners and taxes to the government. Some local examples include jury verdicts against Anadarko Petroleum for cheating the government out of $7.5 million and Williams Production for acting in bad faith, breach of contract, violating state law and owing one property owner in Garfield County $4 million.

This pattern of underpayment is accompanied by excessive and underreported pollution. Recently Black Mountain Disposal revealed that it had released 7 times more volatile organic compounds (VOCs) than previously reported and EnCana used a misleading, inaccurate methodology to underreport its emissions.

Fortunately some of the state’s most dedicated and conscientious leaders are spearheading current oil and gas industry reforms. Coloradans need to thank and encourage state Rep. Kathleen Curry, Chair of the Agricultural and Natural Resources Committee; Harris Sherman, Department of Natural Resources director; David Neslin, COGCC director and Jim Martin Colorado Health Department director for their efforts to develop new oil and gas regulations that will require the oil and gas industry to use best management practices statewide. Given the industry’s well-financed attack on COGCC rule-making, theirs is an unenviable, promethean task.

CHARLES KERR
Grand Junction

This entry was posted on Monday, February 18th, 2008 at 9:58 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.