Fracking Limit Weighed as Colorado Drillers Back Ad Blitz

With three days before the election, an energy trade group has donated about 32 times more than activists in four Colorado communities in a push to persuade residents to vote against limiting oil and gas drilling.

In Broomfield, Sarah Egolf received a flier depicting a man in a business suit standing on one side of a level perched atop a pyramid with a ball on the opposite end.

“It was supposed to demonstrate balance,” said the 33-year-old environmental fundraiser. “There’s nothing balanced about putting an oil and gas well next to a school and there’s nothing unbalanced about taking five years to study the health impacts.”

Broomfield residents are considering a five-year moratorium on hydraulic fracturing, in which a mixture of sand, water and chemicals is injected underground to break apart shale formations so oil and gas can flow to the surface. The practice, known as fracking, is fueling the nation’s energy boom and landed this oil-patch state in the center of a debate over its impact on public health and the environment.

Political issue committees opposing the measures in the four towns made about $606,000 in monetary contributions through mid-October, with about 99 percent from the Denver-based Colorado Oil and Gas Association. That compares with about $18,470 donated by proponents and groups supporting the limits, campaign finance reports show.

Anadarko Petroleum (APC)

Anadarko Petroleum Corp. and other companies drilling in the state’s largest oil and gas field said the donations came on top of efforts by energy firms to talk with residents about how fracking works.

“There is a need for factual science-based information to be in the communities,” said John Christiansen, a spokesman for the company based in The Woodlands, Texas. “There also needs to be an understanding of the regulations that are already in place.”

Governor John Hickenlooper, a Democrat with a master’s degree in geology, who’s up for re-election next year, opposes the initiatives.

“If you ban fracking you are essentially banning exploration and extraction of hydrocarbons,” Hickenlooper said in an interview. “We have a regrettable system called the split estate where people who own the mineral rights don’t own the surface rights. Our state constitution guarantees people who own the mineral rights that there can be extraction from the surface to get those minerals.”

Gaining Control

The attempt by communities at the base of the Rocky Mountains to gain local control over drilling is being monitored by neighboring states where fracking is prevalent.

Wyoming, Montana and New Mexico are watching this closely,” said Tim Wigley, president of the Western Energy Alliance, a Denver-based trade group. “Typically resource measures, if they are successful in one state, they move to other states.”

The election comes as oil and gas companies are waging a public-relations campaign to assure Coloradans they are cleaning up 48,177 gallons of oil and condensate spilled after record flooding in the state in September. Images of overturned tanks leaking black fluid into brown floodwaters, taken by local activists, appeared in publications around the world.

Energy industry representatives said national environmental groups are backing the anti-fracking initiatives as part of a long-term effort to ban the practice altogether. They said the industry committed more than $600,000 to defeat the measures because they have to reverse misunderstandings about such drilling.

‘Safely Conducted’

“Hydraulic fracturing has been safely conducted in Colorado for more than 60 years,” said Doug Flanders, director of policy and external affairs for the Colorado Oil and Gas Association. “On behalf of the 100,000 Colorado families who have an enormous stake in the outcome of these ballot initiatives, we are financially supporting the local groups who oppose the bans.”

In addition to Broomfield, measures to limit fracking are being proposed in Fort Collins and Boulder, the state’s fourth and eleventh largest cities, respectively, and in Lafayette, which is adjacent to Weld County, home to the Wattenberg Field - - one the nation’s largest oil and gas fields.

Five-Year Moratorium

The proposals in Broomfield, Fort Collins and Boulder would place a five-year moratorium on the practice, while Lafayette’s would ban it altogether. About 141 active wells are located in the four areas, a fraction of the 51,398 statewide, statistics show. Dozens of wells are proposed, including 29 permitted in Broomfield.

The measures come a year after residents in Longmont, about 39 miles (63 kilometers) north of Denver, passed a charter amendment banning drilling, with 60 percent of the vote. The Colorado Oil and Gas Association sued and the state joined the lawsuit, which has yet to be set for trial.

The Colorado initiatives are part of a growing movement nationwide to curtail hydraulic fracturing, which pushed oil production in Colorado in 2012 to its highest level in 55 years. Communities and organizations from California to New York passed 383 measures against fracking, according to Washington-based Food & Water Watch.

Residents say measures limiting fracking are necessary because the state agency charged with regulating the industry, the Colorado Oil and Gas Conservation Commission, isn’t doing its job effectively.

‘Political Arm’

“Major elements of our state government are what we see as a political arm of the oil and gas industry,” said Cliff Willmeng, who helped get the Lafayette measure on the ballot.

“There is very little community input into this issue,” added the 43-year-old trauma nurse, “which is why these communities are taking it on themselves to protect their own public safety.”

Hickenlooper disputed that the regulatory commission is too close to the energy industry.

“If you look at the representation on the COGCC, it’s pretty diverse,” he said. “It’s certainly by no means a rubber stamp for anybody. If you talk to people in the oil and gas industry, they think it’s stacked against them.”

The proposed fracking limits are dividing communities where oil and gas industry employees live across the street from anti-fracking activists.

Walking Precincts

Mary Anderson spent hours walking precincts in northern Fort Collins gathering signatures for the proposed moratorium, coordinating volunteers for the campaign and hanging tags on doors reminding people to vote on Nov. 5. Most Colorado voters received their ballots in mid-October for the largely mail-in election.

“In my own neighborhood I could tell people were somehow associated with the oil and gas industry -- either they or their family members work there,” said the 64-year-old retired grant manager. “There is a lot of fracking being done close by.”

Anderson lives less than half a mile from undeveloped land where several drilling sites are proposed. She’s concerned horizontal fracturing, in which a well is sunk and then angled horizontally through a formation, could allow activity to take place under her home.

The Fort Collins City Council last month approved a resolution, 4-3, opposing the moratorium, said Bob Overbeck, a councilman who represents neighborhoods around the undeveloped parcel and is in favor of fracking limits.

Scientific Consensus

“In the absence of scientific consensus that fracking is safe, I don’t think at this time it would be wise to make a decision as to whether or how to allow fracking in densely populated urban areas,” he said. “It’s reported that living near an active well increases ones risk of asthma, endocrine disorders, cancers and other health-related issues.”

The moratoriums are necessary to give time to scientists at the University of Colorado at Boulder to complete a series of studies analyzing fracking’s impacts on public health and the environment, the measures’ backers say.

Drilling agreements between lawmakers and energy companies in Fort Collins and Broomfield already contain requirements that go beyond state and federal fracking rules, making a moratorium unnecessary, said B.J. Nikkel, a retired state legislator advising opponents of the initiatives.

Environmental Groups

The groups pushing the measures are being supported largely by national environmental organizations that are trying to minimize and conceal their contributions, while the energy industry has been transparent about its donations, she said.

“The story that’s been out there is that this has been David versus Goliath and that’s not true,” Nikkel said. “I would venture to guess, having been involved in a lot of campaigns myself over the years, that they’ve spent at least as much as the Colorado Oil and Gas Association.”

Nikkel pointed to a calendar on the website of Frack Free Colorado, a state organization that partners with national groups, showing 34,000 copies of campaign materials were distributed in Boulder on Oct. 7.

The effort, conducted by Plan-Boulder County, a citizens organization, was “100-percent-volunteer done,” said Russell Mendell, a spokesman for Frack Free Colorado. Rumors that national groups are backing the local initiatives with unreported contributions aren’t true, he said.

“We’re being hugely outspent here,” Mendell said. “We’ve been running a very low-budget campaign. They’re putting out TV commercials and we’re producing grassroots videos.”

To contact the reporter on this story: Jennifer Oldham in Denver at joldham1@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman in New York at smerelman@bloomberg.net

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