Misconceptions of Proposition 112 Corrected

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Source:

Energy Accountability Project

Media Publication:

Energy Accountability Project

Originally Published On:

October 15, 2018

Rating:

Full

Claim: The 2,500-foot setback measure applies only to occupied structures.

Fact: The 2,500-foot setback applies not only to occupied structures, but also a litany of other areas, including dry creek beds. This is why the Colorado Oil and Gas Conservation Commission found that 85 percent of the state and 94 percent of the state’s highest producing counties would be off limits for drilling.  

Claim: The oil and natural gas industry has only 23,000 jobs in the state, based on a 2017 Department of Energy report.

Fact: This broad analysis only looked at direct jobs, and in fact, only looked at direct jobs in certain sectors and left out others.  In contrast, a 2015 CU Leeds School of Business study found 38,000 direct employees and more than 100,000 indirect employees (jobs that exist because of oil and gas). Additionally, a PricewaterhouseCoopers study commissioned by API uses a methodology that captures all supply chain sectors such as gas stations and manufacturing that are also related to the oil and natural gas industry. It found oil and gas supports more than 230,000 Colorado jobs - 7 percent of the state's workforce – and adds $31 billion to the state economy each year.

Claim: The 2,500-foot setback is only five times greater than the current setbacks.

Fact: The setback is 25 times larger than Colorado’s current setbacks of 500 feet from homes.  The impacted surface area of a 500-foot setback is about 18 acres. The impacted surface area of a 2,500-foot setback is 450 acres, which is 25 times that of the current setback.  Additionally, Prop 112 permits local communities to set distances beyond the 2,500 feet.

Claim: The oil and natural gas industry and its employees won’t be severely impacted by the setback measure because it only applies to new drilling and 52,000 wells will still be operating.

Fact:  Decline curves for oil and gas production using hydraulic fracturing and horizontal drilling are steep.  While wells can produce for 15-20 years, most of the production occurs in the first few years of a well’s life cycle. Drilling must be consistent in order to maintain production. As production declines, tax money that goes to state and local governments also drops significantly. Additionally, older wells do not require the volume of workers required by new production.

Claim: A 2,500-foot setback will not have a significant impact on Colorado’s economy.

Fact: Independent studies show this is false. The setback would put 85 percent of the state off limits to new oil and gas development, according to the Colorado Oil and Gas Conservation Commission. More than 94 percent of non-federal land in the state’s top five producing oil and natural gas counties (Weld, Garfield, La Plata, Rio Blanco and Las Animas) would be unavailable for new production.

Additionally, a study released on July 27, 2018 by the Common Sense Policy Roundtable showed that Proposition 112 would result in the loss of as many as 147,800 jobs in the next 12 years and:

• A loss of between 33,500 and 43,000 jobs in the first year.

• A total loss to Colorado’s economy from $169 billion to $217 billion over 12 years.

• Reductions to state and local tax revenue of somewhere between $7 billion and $9 billion over 12 years. This revenue is critical for state and local governments, schools and special districts to pay for everything from new parks to police and fire departments to road improvements.

• Only 23 percent of the impacted jobs would be from the oil and gas sector.  The remaining 77 percent would be jobs in retail, health care, construction, hotel and food services, local government and real estate.

Reviewed On:
October 15, 2018
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