Chase Woodruff

(Colorado Newsline) Democrats in the Colorado Senate on Saturday approved a pair of bills levying a new fee on oil and gas production and tweaking pollution laws, sending the compromise package negotiated by industry and environmental groups to the House with just a few days remaining in the 2024 legislative session.

Senate Bills 24-229 and 24-230 were unveiled by Gov. Jared Polis and legislative leaders last week, as part of a sweeping agreement to withdraw a series of tougher anti-pollution measures under consideration by lawmakers and keep competing sets of high-stakes initiatives off of Colorado’s 2024 ballot.

Both bills were passed on party-line votes in the Senate on Saturday. To become law, they will need to be passed by the House before the General Assembly adjourns for the year Wednesday and signed by the governor.

“Forging consensus on an issue like this is hard, which is what makes this legislation all the more exciting,” Senate President Steve Fenberg, a Boulder Democrat and sponsor of SB-230, said in a statement. “It’s taken a lot of hard work to get to this point, and I am grateful to everyone, especially the members of my caucus who have come to the table willing to work and, more importantly, listen to each other in the pursuit of an agreement we can all get behind.”

The package centers on a new sliding-scale fee on oil and gas production that would raise roughly $140 million annually, 80% of which would be used to fund public transit. The remainder would fund efforts by Colorado Parks and Wildlife to acquire and conserve wildlife habitat to offset the impacts of oil and gas development.

With Fenberg’s support, the Senate on Friday adopted an amendment introduced by Republican state Sen. Perry Will of New Castle, requiring that the public lands projects funded by the bill exclude efforts to reintroduce “grizzly bears and gray wolves that negatively impact livestock.” Colorado already spends over $2 million annually to support its gray wolf reintroduction program, as approved by voters in 2020.

Republicans during Friday’s floor debate decried the bill’s production fees, which are equivalent to a surcharge of about 0.5% on each barrel of oil produced. Several GOP lawmakers accused the bill’s Democratic supporters of hypocrisy after years of what they said were efforts to stifle the oil and gas industry. State Sen. Bob Gardner of Colorado Springs called the fees “blood money.”

“Apparently, just in the last week sometime, we’ve taken away the argument that oil and gas is so bad for us we need to get rid of it,” said Republican state Sen. Barbara Kirkmeyer of Weld County, home to the vast majority of Colorado oil production. “I can’t tell you how many hearings I’ve been in where I was told that their children’s nosebleeds, their children’s asthma and their asthma was caused by oil and gas. Somehow, a fee on oil and gas magically reduces that.”

More power to penalize operators

For decades, a nine-county region in and around the Denver metro area has failed to meet the Environmental Protection Agency’s health standards for ozone, a hazardous air pollutant linked to a wide variety of health problems. Emissions from oil and gas operations are among the top local contributors to the region’s ozone problem, which peaks in the summer months, and is also worsened by gas-powered vehicles, lawn equipment and other industrial sources.

The bills withdrawn by Democrats as part of last week’s compromise included proposals to halt drilling and fracking during the peak summer ozone months, strengthen permitting rules and increase penalties for “repeat violators” of air quality laws. Such measures had drawn intense opposition from oil and gas industry groups.

Instead, SB-229, also introduced as part of the agreement, proposes a series of relatively minor changes to permitting and enforcement rules, giving the state’s Energy and Carbon Management Commission more power to penalize operators and address the problem of orphaned wells. It would also codify a mandate on oil and gas producers to reduce emissions of so-called ozone precursors, which Polis first issued in an executive order last year.

“While Colorado has worked hard to address the ozone problem, we need to do even more to reduce harmful emissions and keep our communities safe,” state Sen. Faith Winter, a Thornton Democrat and SB-229 sponsor, said in a press release. “This legislation is a great first step, and is particularly exciting because of how it came together: through real, honest discussion towards a shared goal. It’ll help get our air quality crisis under control, and create a healthier future for our kids and our grandkids.”