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GUEST COLUMN: Methane rule hurts Colorado residents

By: Hugo Chavez-Rey
June 30, 2017 Updated: July 31, 2017 at 8:54 am
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Last month, Congress delivered a huge blow to Colorado's energy sector. 

In a surprise vote, the Senate failed to scrap an Obama-era rule that limits methane emissions from gas and oil production on federal lands.

The rule would kill thousands of jobs and cost millions of dollars, while having virtually no impact on emissions. U.S. senators made a severe miscalculation in keeping it.

The House did its part to strike down the methane rule this year. And a business-friendly Senate was expected to follow suit by employing a 1996 law called the Congressional Review Act. The act gives lawmakers 60 working days to repeal rules enacted by previous administrations.

But in a shocking twist, the motion to nix the rule lost in the Senate by a single vote.

That'll cost Colorado. The methane rule's price tag is a hefty $279 million a year.

Small, independent energy producers will bear most of the financial burden. To bring emissions down far enough to meet the rule's draconian limits, nearly 2,000 small businesses would need to dish out between $42,300 and $63,600 each. Many single-well operators simply don't have that kind of money and will be forced to shut down.

That's a shame for Colorado's vibrant energy sector, which ranks in the top 10 for oil and gas production nationwide. The industry accounts for $25.8 billion of the state's economy - nearly one-tenth of its GDP.

Strangling Colorado's energy sector with government regulation is a surefire way to kill jobs. The oil and gas industry provides a middle-class livelihood to state residents, especially those without a college education. According to the latest Labor Department statistics, while the average Colorado wage is about $53,000, the average Colorado energy sector wage is about $85,000. And those who work in energy extraction and production average over $118,000 a year.

Colorado needs more jobs like these, not fewer.

The rule will even affect jobs outside the oil and gas industry. The energy sector supports over 200,000 direct and indirect jobs across Colorado, many of which will be lost as the methane regulation forces the industry to contract.

The worst part is, this heap of financial pain will yield virtually zero gain. When all is said and done, the methane rule would cut emission by less than 1 percent.

And the oil and natural gas industry is reducing emissions on its own. According to an Environmental Protection Agency report, "since 1990, methane emissions from production field operations have decreased by 29 percent." A key reason? "A large decrease in associated gas venting" - or burning of methane - from oil wells.

Methane emissions are declining thanks to efforts by the oil and gas industry. For years, fossil fuel companies have invested and innovated to improve energy extraction, and not just out of the kindness of their hearts. The industry has a vested interest in efficiency, including capturing and selling natural gas instead of venting it and burning it off.

What's more, this regulation is redundant in Colorado. Sen. Cory Gardner, who voted to repeal the methane rule, noted that his state "has one of the strictest regulations on methane emissions in the country."

Fortunately, the Trump administration realizes how harmful and duplicative this regulation is. So, the Department of the Interior is considering strategies to kill or modify the rule.

Ultimately, this is Business 101. Colorado residents need energy and jobs. But oil and gas companies can't open new wells or keep old wells operating if the costs become too high. Congress has failed to fix the problem; let's sincerely hope the Interior Department succeeds.

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Hugo Chavez-Rey is the chairman of the Colorado Hispanic Republicans.

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