On November 6, the Colorado ballot box will present voters with opposing oil and gas measures, Proposition 112 and Amendment 74. Both measures could have major conflicting implications on the state’s oil and gas development.
Proposition 112 would establish the minimum setback of all oil and gas wells to 2,500 feet from homes, schools, hospitals, and “vulnerable areas.” Current regulations mandate wells are 500 feet from homes and 1,000 feet from schools and hospitals.
Advocates of the oil and gas industry, such as Chip Rimer—a top executive at Noble Energy, warn that these new setback requirements could cut off as much as 80% of the state’s future energy development on nonfederal lands, causing 150,000 job losses statewide, and decreasing tax revenues by $1 billion. However, proponents of Proposition 112 believe the measure is necessary to protect the health and safety of residents in the Front Range Area where the population is booming and the industry continues to grow.
Voters will also consider Amendment 74 this fall. Amendment 74 would amend the Colorado Constitution’s taking clause to read: “[p]rivate property shall not be taken or damaged, or reduced in fair market value by government law or regulation for public or private use, without just compensation.”
Chad Vorthmann, Amendment 74’s sponsor and Vice President of Colorado Farm Bureau, says the measure is about “protecting Colorado’s farmers and ranchers from extremist attempts to enforce random setback requirements for oil and natural gas development . . . and strip away Colorado landowners’ right to use their land the way they wish.”
Opponents of Amendment 74 believe the regulatory takings claim will invite a flood of lawsuits and bankrupt small municipalities. Dan Grossman, a former Colorado state legislator who is the national director of state programs for the Environmental Defense Fund’s oil and gas program, claims that the measure will paralyze local governments. If local governments reject oil and gas developments they could face takings claims from mineral owners. But if the government approves the development, it could be faced with a takings claim from property owners.
Both initiatives passing would be the worst-case scenario, Sam Mamet, executive director of the Colorado Municipal League, says. Proposition 112 would invite legal challenges under Amendment 74. In fact, Eric Sondermann, an independent political analyst, calls Amendment 74 a “bit of an insurance policy” against Proposition 112.
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