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GUEST COLUMN: Senators can save us from job-crushing energy rule

By: Regina Thomson
March 5, 2017 Updated: March 6, 2017 at 2:31 pm
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Congress just took a vital step toward protecting Colorado's economy from smothering federal regulations.

Last month, the House passed legislation that would repeal new controls on natural gas production installed in the waning days of the Obama administration. It's now up to the Senate to pass a companion bill and help make the repeal official. Sens. Michael Bennet and Cory Gardner ought to lead the way; left unaltered, these controls will crush local energy firms and destroy local jobs.

These new rules, enacted by the Bureau of Land Management, restrict "venting" and "flaring," practices used by energy developers to burn off excess methane, which is the primary component of natural gas. Burning methane produces carbon emissions that can contribute to global warming.

It's possible for regulators to make energy production more environmentally friendly without burdening developers with excessive expenses. These rules fail to strike that balance.

The compliance costs will be so high that many firms will have to shut down operations on federal territories. Analysis from the research firm John Dunham & Associates calculates that the proposed methane controls will destroy $1.26 billion in economic activity, including lost wages, lower tax revenues and decreased annual energy production.

Excessive regulations keep gas production on federal lands artificially low. Firms have to navigate lengthy, hugely expensive approval channels to get the green light. As a result, while gas production on private and state territories jumped 55 percent between 2010 and 2015, production on federal lands dropped 18 percent over that same period. These methane controls would drive it down even further.

And that contraction costs taxpayers. Private developers shell out massive royalties to access federal lands.

A burdensome approval process chokes off this revenue stream. Indeed, if federal gas production had kept pace with the overall trends, the federal government would have collected over $4 billion in additional royalties - that's money that could have been invested back into school, health care and other essential public programs.

A decline in the gas industry would also have dire economic effects in Colorado. This sector now supports over 102,000 local jobs and adds $32 billion to the economy every year, transforming communities all across the state.

Consider Weld County.

Back in 2013, the lingering effects of the financial crisis had driven the area's unemployment rate up to 8.7 percent. Weld has since grown into the top gas producer in the state, serving as the primary entryway into the Mancos Shale Formation, which runs below the Piceance Basin and contains over 66 trillion cubic feet of gas. Today, county unemployment is just 2.6 percent, a 17-year low.

A weaker gas industry means a weaker job market for the hard-working people of Weld.

Imposing some economic pain could be justified if these new controls actually generated serious emissions reductions. But they won't. They are unnecessary - and potentially illegal. The power to regulate air quality rests with state governments and the Environmental Protection Agency, not the Bureau of Land Management. And those entities have established sensible flaring rules.

Gas companies have also invested heavily in new, better technologies to capture excess methane. That's why, even as overall domestic gas production has jumped 47 percent since 1990, methane emissions have fallen by 15 percent.

And smothering natural gas firms will cause huge new environmental harms. The boom in the gas industry has caused power plants all over the country to switch over, greatly reducing the emissions associated with electricity production.

It's up to Congress to fix this last-minute Obama-era mistake. The House just did its part. Now, the Senate must pass a companion bill. Sens. Bennett and Gardner should join in this effort to keep the gas industry humming in the communities they represent.

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Regina Thomson is president of the Colorado Issues Coalition.

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