Reports related to this article:
Project(s): View 6 related projects in PECWeb
Plant(s): View 6 related plants in PECWeb
Released February 16, 2024 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Energy wars may once again break out in Colorado this year as the state legislature considers a draft bill to stop new wells in the state after 2030 while a group funded by Oil & Gas companies is collecting signatures for two ballot initiatives that take aim at clean energy policies that threaten hydrocarbon use.
In 2022, Colorado was the nation's fifth-largest producer of crude oil and the eighth-largest producer of natural gas, according to the U.S. Energy Information Administration (EIA). The agency estimated that the Niobrara Shale Formation, which is mainly in Colorado, will produce about 711,000 barrels of oil per day (BBL/d) this month, close to its historic peak of about 800,000 BBL/d, set in 2019. Gas production from that formation will average approximately 5.4 billion cubic feet per day (Bcf/d) this month, not far below that formation's historic peak of about 6 Bcf/d, set in early 2020, the agency said.
Click on the image at right to see historic and current oil and gas production from the Niobrara Formation.
Renewable electric generation in Colorado has quadrupled between 2010 and 2022, the EIA continued. In 2022, about 40% of the state's electricity came from renewable resources, the EIA said, adding that gas accounted for about 25% of the state's electricity fuel mix in that year.
By 2029, more than 2,500 megawatts (MW) of coal-fired generation in Colorado is slated to be retired, the EIA said in its profile of Colorado's energy. Renewables and gas are fighting to replace coal, which generated about 35% of the state's electricity in 2022, it said.
Developers plan to invest billions of dollars in new renewable generation in Colorado. Industrial Info is tracking about 51 proposed renewable electric projects in the Centennial State, with an aggregate value of about $15.75 billion. Solar projects account for approximately 51% of all proposed renewable electric project spending in the state, while wind is slated to account for approximately 23% of planned capital spending in Colorado. Hydroelectric projects, mostly pumped storage projects, account for about 26% of all planned capital spending on renewable electricity in that state.
Click on the image at right to see a pie chart of proposed spending on renewable electric projects in Colorado.
Renewable electricity, plus clean energy mandates at the state and local level, would take market share from oil and gas companies.
Developers have proposed spending about $728 million on gas-fired electric capital projects in Colorado, according to Industrial Info's Global Market Intelligence (GMI) platform.
In recent years, Colorado has seen numerous fights over the role of oil and gas development, often waged via citizen ballot initiatives. In 2019, the Democrat-led Colorado legislature approved a bill that significantly changed the mandate of the agency regulating oil and gas in the state, prioritizing public health and safety over production. For more on that, see April 9, 2019, article - Colorado Oil & Gas Industry Faces a New and Different Regulatory Future.
During the current legislative session, four Democratic lawmakers introduced a bill, SB24-159, that would stop new well development in the state after December 31, 2029. One of the lawmakers, Senator Sonya Jaquez Lewis, said she was sponsoring the bill because of climate change concerns as well as Colorado's longtime challenge meeting federal air quality standards.
Colorado has become a solidly "blue," state, with Democrats holding strong majorities in the state House and Senate, and a Democrat, Jared Polis, sitting in the governor's mansion.
The Denver Post quoted Jaquez Lewis as saying, "I think most Coloradans agree with us that we can't keep drilling forever. It's a finite energy source. Fossil fuel demand is going down in Colorado because we are starting to transition to clean energy."
"There are going to be thousands of wells producing well after 2050," she added. "No one at all is trying to halt oil and gas production."
The state senator said nearly 50,000 wells in Colorado are producing oil and gas. In her draft bill, new permits would be allowed until the end of 2029. For permits issued after July 1, 2024, certain operations on a well would have to start on or before the end of 2032.
The state's oil and gas companies and industry groups are pushing back, both at the legislature and through two ballot initiatives.
The Post article quoted Kait Schwartz, director of API Colorado, the state branch of the American Petroleum Institute, as saying, "I think we'll be putting pressure on the sponsors of this legislation. It's a waste of taxpayer money and we will be trying to bring attention to that."
In a statement emailed to Industrial Info, Dan Haley, president and chief executive of the Colorado Oil and Gas Association (COGA) (Denver, Colorado) said: "If this bill were to pass, it would not only crush the economy, but it would hurt the environment by relying on foreign countries with lesser environmental standards to provide the energy we need."
"In Colorado," he continued, "we produce some of the cleanest oil and natural gas molecules across the country, under the most stringent regulations. But oil and gas production typically peaks in the first 18 months after a well is drilled, and then enters a more moderate level of production over the longer term. Because of this decline curve, it is essential for operators to maintain a steady inventory of permits to be able to ensure they can provide the energy our state needs."
"If we can't, because of a ban, it would potentially be disastrous for consumers. The mere introduction of this bill sends a chilling message to every business across the state that some of our elected leaders are willing to put you out of business, even if you supply a product they use every single day. If (this bill is) approved, it would likely invite a massive lawsuit against the state for denying citizens access to their private property rights."
Not only will the industry fight the bill at the legislature, where significant Democratic majorities suggest it may not succeed, it also is gathering signatures to place two initiatives on November's ballot. The group behind the signature campaign, Protect Colorado, said the measures will protect freedom of energy choice for Coloradans.
The measures are aimed at slowing or undoing the state's march toward clean energy electrification. The Post article said the measures would prohibit "favoring or discriminating against an energy source" through laws, ordinances, regulations or codes by the state and local governments.
Protect Colorado's website said the group supports "good jobs, strong communities, and responsible oil and natural gas development to power Colorado's economic future. Protect Colorado supports state and local ballot initiatives that promote a vibrant Colorado economy and opposes those measures that seek to harm Colorado's economy and way of life. Responsible oil and natural gas development is vital to Colorado's economic future. We promote the numerous benefits that oil and natural gas development provides to Colorado and our communities."
The group said the oil and gas industry supports about 292,000 jobs in the state and contributed an estimated $31 billion to the Colorado economy. Emissions, mostly from power plants, have declined 50% in the state as gas replaces coal-fired generation, the group added.
Protect Colorado must collect 124,238 valid signatures of registered voters by April 18 to get the initiatives on the November ballot. The initiatives take aim at the move to decarbonize electric generation and require new buildings to be powered exclusively by electricity.
Last December, the group told the Colorado Secretary of State that it had received about $3.39 million in funding from various oil and gas companies, including Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas), Chevron Corporation (NYSE:CVX) (San Ramon, California), Phillips 66 (NYSE:PSX) (Houston) and Bayswater Exploration and Production (Denver, Colorado). About $2.25 million had been spent during that period, according to the Post.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In 2022, Colorado was the nation's fifth-largest producer of crude oil and the eighth-largest producer of natural gas, according to the U.S. Energy Information Administration (EIA). The agency estimated that the Niobrara Shale Formation, which is mainly in Colorado, will produce about 711,000 barrels of oil per day (BBL/d) this month, close to its historic peak of about 800,000 BBL/d, set in 2019. Gas production from that formation will average approximately 5.4 billion cubic feet per day (Bcf/d) this month, not far below that formation's historic peak of about 6 Bcf/d, set in early 2020, the agency said.
Renewable electric generation in Colorado has quadrupled between 2010 and 2022, the EIA continued. In 2022, about 40% of the state's electricity came from renewable resources, the EIA said, adding that gas accounted for about 25% of the state's electricity fuel mix in that year.
By 2029, more than 2,500 megawatts (MW) of coal-fired generation in Colorado is slated to be retired, the EIA said in its profile of Colorado's energy. Renewables and gas are fighting to replace coal, which generated about 35% of the state's electricity in 2022, it said.
Developers plan to invest billions of dollars in new renewable generation in Colorado. Industrial Info is tracking about 51 proposed renewable electric projects in the Centennial State, with an aggregate value of about $15.75 billion. Solar projects account for approximately 51% of all proposed renewable electric project spending in the state, while wind is slated to account for approximately 23% of planned capital spending in Colorado. Hydroelectric projects, mostly pumped storage projects, account for about 26% of all planned capital spending on renewable electricity in that state.
Renewable electricity, plus clean energy mandates at the state and local level, would take market share from oil and gas companies.
Developers have proposed spending about $728 million on gas-fired electric capital projects in Colorado, according to Industrial Info's Global Market Intelligence (GMI) platform.
In recent years, Colorado has seen numerous fights over the role of oil and gas development, often waged via citizen ballot initiatives. In 2019, the Democrat-led Colorado legislature approved a bill that significantly changed the mandate of the agency regulating oil and gas in the state, prioritizing public health and safety over production. For more on that, see April 9, 2019, article - Colorado Oil & Gas Industry Faces a New and Different Regulatory Future.
During the current legislative session, four Democratic lawmakers introduced a bill, SB24-159, that would stop new well development in the state after December 31, 2029. One of the lawmakers, Senator Sonya Jaquez Lewis, said she was sponsoring the bill because of climate change concerns as well as Colorado's longtime challenge meeting federal air quality standards.
Colorado has become a solidly "blue," state, with Democrats holding strong majorities in the state House and Senate, and a Democrat, Jared Polis, sitting in the governor's mansion.
The Denver Post quoted Jaquez Lewis as saying, "I think most Coloradans agree with us that we can't keep drilling forever. It's a finite energy source. Fossil fuel demand is going down in Colorado because we are starting to transition to clean energy."
"There are going to be thousands of wells producing well after 2050," she added. "No one at all is trying to halt oil and gas production."
The state senator said nearly 50,000 wells in Colorado are producing oil and gas. In her draft bill, new permits would be allowed until the end of 2029. For permits issued after July 1, 2024, certain operations on a well would have to start on or before the end of 2032.
The state's oil and gas companies and industry groups are pushing back, both at the legislature and through two ballot initiatives.
The Post article quoted Kait Schwartz, director of API Colorado, the state branch of the American Petroleum Institute, as saying, "I think we'll be putting pressure on the sponsors of this legislation. It's a waste of taxpayer money and we will be trying to bring attention to that."
In a statement emailed to Industrial Info, Dan Haley, president and chief executive of the Colorado Oil and Gas Association (COGA) (Denver, Colorado) said: "If this bill were to pass, it would not only crush the economy, but it would hurt the environment by relying on foreign countries with lesser environmental standards to provide the energy we need."
"In Colorado," he continued, "we produce some of the cleanest oil and natural gas molecules across the country, under the most stringent regulations. But oil and gas production typically peaks in the first 18 months after a well is drilled, and then enters a more moderate level of production over the longer term. Because of this decline curve, it is essential for operators to maintain a steady inventory of permits to be able to ensure they can provide the energy our state needs."
"If we can't, because of a ban, it would potentially be disastrous for consumers. The mere introduction of this bill sends a chilling message to every business across the state that some of our elected leaders are willing to put you out of business, even if you supply a product they use every single day. If (this bill is) approved, it would likely invite a massive lawsuit against the state for denying citizens access to their private property rights."
Not only will the industry fight the bill at the legislature, where significant Democratic majorities suggest it may not succeed, it also is gathering signatures to place two initiatives on November's ballot. The group behind the signature campaign, Protect Colorado, said the measures will protect freedom of energy choice for Coloradans.
The measures are aimed at slowing or undoing the state's march toward clean energy electrification. The Post article said the measures would prohibit "favoring or discriminating against an energy source" through laws, ordinances, regulations or codes by the state and local governments.
Protect Colorado's website said the group supports "good jobs, strong communities, and responsible oil and natural gas development to power Colorado's economic future. Protect Colorado supports state and local ballot initiatives that promote a vibrant Colorado economy and opposes those measures that seek to harm Colorado's economy and way of life. Responsible oil and natural gas development is vital to Colorado's economic future. We promote the numerous benefits that oil and natural gas development provides to Colorado and our communities."
The group said the oil and gas industry supports about 292,000 jobs in the state and contributed an estimated $31 billion to the Colorado economy. Emissions, mostly from power plants, have declined 50% in the state as gas replaces coal-fired generation, the group added.
Protect Colorado must collect 124,238 valid signatures of registered voters by April 18 to get the initiatives on the November ballot. The initiatives take aim at the move to decarbonize electric generation and require new buildings to be powered exclusively by electricity.
Last December, the group told the Colorado Secretary of State that it had received about $3.39 million in funding from various oil and gas companies, including Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas), Chevron Corporation (NYSE:CVX) (San Ramon, California), Phillips 66 (NYSE:PSX) (Houston) and Bayswater Exploration and Production (Denver, Colorado). About $2.25 million had been spent during that period, according to the Post.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
