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Energy

“It is going to be very messy”: Opposing oil and gas ballot measures respond to Colorado’s contentious drilling climate

One would set back rigs 2,500 feet from homes and natural features, another would allow property owners to be compensated if value was reduced; critics say either one would be disastrous if passed

In this Feb. 13, 2017 file photo, a petroleum industry storage tank borders a ranch, left, near a fossil fuel extraction site, right, with the Front range of the Rocky Mountains rising up in the background, a few miles from the border of Boulder County, in Weld County, near Mead, Colorado. (AP Photo/Brennan Linsley, file)
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Call it “Clash of the Ballot Initiatives.”

Two measures — either of which would be, if passed, disastrous, critics say — seek to set new land-use standards in Colorado.

One would require oil and gas drill rigs be set back 2,500 feet from homes and natural features such as streams. The other would give landowners the right to sue state and local government for compensation if their property’s market value is reduced by any government rule.

“They are polar opposites,” said Sam Mamet, executive director of the Colorado Municipal League, which opposes both measures. “At the end of the day, these two extreme measures are going to be linked together and it is going to be very messy.”

Sitting between the two is a gulf in the state’s ability to find a way to adequately address the burgeoning oil and gas industry, and concerns about changing land-use rules.

The setback measure, Proposition 112 and previously known as Initiative 97, is sponsored by Colorado Rising, a coalition of environmental and community groups. It would add a statute to the state’s laws.

“We are not talking about single-pump jack, but mega-pads, massive industrial sites going in next to houses,” said Boulder resident Anne Lee Foster, a sponsor of the initiative. “We’ve worked for seven years to get some very basic protections in place and haven’t got any results from the legislature, the regulatory agencies or the courts. This was the best way to take the power back.”

Amendment 74, the so-called takings ballot measure previously known as Initiative 108, is sponsored by the Colorado Farm Bureau. It would amend the state constitution to give landowners the right to be compensated if their property’s fair market value is diminished by government law or regulation.

Farmers often refer to their land as their retirement accounts, so efforts that reduce land value, either on the surface or beneath, are always a concern. The measure, however, would extend this legal challenge to all kinds of property owners.

“No matter who you are or where you come from, your property is your property,” said Shawn Martini, the bureau’s vice president of advocacy. “Everyone should be protected.”

The problem with the measure, critics say, is that it is so broad and the language is so general that any municipal or state action from a zoning change to an air-emission permit could be seen as diminishing property values and could lead to endless court battles.

“If enacted, it would indeed make it much more difficult for governments to exercise typical land-use powers,” Jan Laitos, a professor at the University of Denver’s Sturm College of Law and an expert on property rights, said in an email.

The “sky-is-falling scenario” is unwarranted because the courts have already set a high bar for a takings claims, and a plaintiff would have to show the damages were ‘non-speculative,’” Martini said. “There are other precedents. … It has to be a direct impact on the property owner. The courts have also upheld the right of governments to enact rules to protect health and safety.”

Still, it will lead to litigation and could tie the hands of local officials, state regulators and the legislature, said Richard Collins, a professor of constitutional law at the University of Colorado Law School.

“Once it is in the constitution, it gives the Supreme Court enormous power,” Collins said. “No one else has anything to say about it.”

Getting the measure into the constitution, however, will be a challenge since the passage of the “Raise the Bar” amendment in 2017, which requires at least a 55 percent vote for passage.

“Very few initiatives get 55 percent,” Collins said. “TABOR did not get 55 percent.”

The Taxpayer’s Bill of Rights, or TABOR, which was passed in 1992, puts limits on the growth in state revenues.

The oil and gas industry supports the takings initiative and has given some modest aid — $24,000 of in-kind services from Pac/West Communications — through its ballot issue committee Protect Colorado.

“(Amendment 74) is clearly a reaction in part to the setback measure, but also a sincere reaction by the Farm Bureau around their protecting property rights and an overreach on oil and gas by some local governments,” Mamet said. “But you don’t amend the constitution to settle old scores.”

Although Protect Colorado offered some support for the takings ballot measure, the target of the more than $17 million that it has raised since May from oil and gas companies is the setback initiative.

“We are focusing on the setback initiative,” said Karen Crummy, a Protect Colorado spokeswoman. “The stakes are too high.”

If Proposition 112 passes, about 85 percent of the state-owned and private land in Colorado would be off limits to drill rigs, according to an analysis by the Colorado Oil and Gas Conservation Commission. Most of the land is set back not from homes but from “vulnerable areas” such as lakes, streams, parks, irrigation ditches and drinking-water sources.

The measure would put about 34,000 oil and gas industry jobs at risk, according to a study by the Common Sense Policy Roundtable, a free-enterprise think tank backed by groups such as state associations for bankers and Realtors, as well as the Denver South Economic Development Partnership.

The industry annually contributes $31.4 billion a year to the state’s economy and provides more than $1.2 billion in public revenue, according to the Colorado Petroleum Council, a trade group.

“This is something that is being done nationwide,” said Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners. “It is a strategy to shut down the oil and gas industry.”

At the August conference of the state’s main trade group, the Colorado Oil & Gas Association, there was talk of national environmental and anti-fracking groups targeting Colorado. Hydrofracturing, or fracking, is a key step in producing oil and gas.

Washington, D.C-based Food & Water Watch, an environmental group with a campaign to ban fracking, contributed $160,000 to Colorado Rising’s issues committee, while Greenpeace, another environmental group that opposes drilling, added $2,000, according to filings with the Colorado secretary of state.

Nevertheless, at a legislators roundtable at the COGA conference, state Rep. Matt Gray,  D-Broomfield, said the people looking to vote for the setback rule weren’t taking their cue from national groups.

Gray, who does not support the setback initiative, said his constituents — residents of Broomfield and Erie, two of the communities facing the most drilling activity — were not “wild environmentalists” but, rather, “concerned homeowners, some of them Republicans.”

“They know (Proposition 112) is a blunt instrument, but they are willing to try it,” Gray said. “This is happening because we aren’t having the discussions we should at the legislature and at the local level.”

Frustration is high in some of the towns and cities north of Denver where oil and gas production, powered by fracking and horizontal drilling, is revving up.

“Adams County is facing 650 new wells, and there is no great system for documenting mineral ownership, documenting leases,” said Sara Loflin, executive director of the League of Oil and Gas Impacted Coloradans, a nonprofit umbrella organization for community groups. LOGIC is part of the Colorado Rising coalition.

“It is less about a ban than the fact there hasn’t been any leadership,” Loflin said. “It is definitely a polarizing moment.”

The Colorado Republican Party Executive Committee opposes the setback measure, while the Democratic Party’s State Executive and Central Committee endorses it.

Joining Gray in opposing the initiative are Democratic Gov. John Hickenlooper and Democratic gubernatorial candidate Jared Polis. In 2014, Polis had backed an initiative for a 2,000-foot setback, which was withdrawn as part of a compromise brokered by Hickenlooper. In a twist, Gray’s Republican opponent, Eric Rutherford, supports Proposition 112.

Many in the oil and gas industry are frustrated, too.

“Colorado has instituted 14 new rule-makings in the last nine years resulting in some of the toughest regulations in the country,” Crummy said.

Still, there is pushback, even when complying with the rules.

Since the initiative seeks to add a statute and not amend the constitution, it needs a simple majority vote to pass. This would allow the legislature to make revisions, although that has been rare.

Until “Raise the Bar,” the statutory initiative was not often used in Colorado since it was so easy to go for a constitutional amendment, Collins said.

“The number of signatures you need to be on the ballot in Colorado is the lowest in the U.S., by far,” he said. “That is why we have all this stuff in a constitution on bear hunting and marijuana.”

The low threshold has also enabled special interests to get initiatives on the ballot, he said.

The state legislature, Collins said, has revised a statutory initiative only twice: in 1931, over reapportionment; and in 1998, over campaign finance.

The novelist F. Scott Fitzgerald once wrote that the “test of a first-rate intelligence is to hold two opposed ideas in mind at the same time and still retain the ability to function.”

Proposition 112 and Amendment 74 pose a similar challenge for Colorado. If both were to pass, the state would mandate drilling setbacks under one measure and potentially be liable for property losses under the other.

“If there were a taking,” Laitos said, “and if the law causing the taking is a state law, the state of Colorado would be responsible for paying just compensation.”

This story was updated at 10:40 a.m. on Sept. 10, 2018 to correct an editing error: Amendment 74, the so-called takings measure, was incorrectly identified in an earlier version of the story.