We have never been more thankful for Colorado’s oil and gas resources. With a viral pandemic killing service jobs, our economy needs employment in the energy sector like never before.
With stay-at-home orders and mass closures of nonessential businesses throughout Colorado and much of the rest of the country, Americans are getting a crash course in economic reality. The main lesson: Our lives depend on the profit-funded free exchange of goods, services and commodities.
When we reduce free enterprise, people lose jobs and become dependent on charity and government. The arrangement is not sustainable long term because charities and governments are funded with a currency backed only by economic activity that provides for humanity. We cannot eat dollar bills provided by the government. We can exchange them with people who grow food. They, in turn, can exchange them with people who make tractors, who exchange them with people who make cars, who exchange them for gasoline, and so forth. When people don’t work — creating that which we all need — poverty ensues.
Nothing chills economic activity more than regulation. When governments create expensive and burdensome licensing requirements and other restrictions, they slow the speed at which humans can invent, produce, work and sell. We saw it this week when the Food and Drug Administration raised standards for craft distilleries making hand sanitizers to help kill the virus. The regulations, raising the minimum alcohol content for — better or worse — will slow production speeds and reduce the supply of these products. Some distillers, without the right equipment, will discontinue making sanitizing products.
With the sudden addition of 3.28 million jobless claims nationally in just a few weeks, every job seems sacred. That’s why Colorado Gov. Jared Polis announced a daily and intense effort by his administration to reduce regulations as the state and country try to prepare for a massive economic slump. Everyone should applaud him for this.
For the past decade, economists have warned that regulating away Colorado’s oil and gas industry would kill hundreds of thousands of jobs. Oil and gas employees occupy one-quarter of downtown Denver’s private-sector office space.
If we quickly lose oil and gas in Colorado, we would see an economic crisis similar to — if not worse — than the coronavirus shutdown’s looming aftermath.
As Polis tries to rid our state of harmful regulations, we hope he considers the plea of a coalition of small oil and gas operators. The Small Operator Society, composed of 50 mom-and-pop businesses with 7,000 wells, wants the governor to suspend a “sweeping series” of energy regulations under consideration by the Colorado Oil and Gas Conservation Commission.
The regulatory agency has broad new authority to impose environmental and aesthetic regulations on energy production under Senate Bill 181, which Polis signed into law in 2019.
Plummeting world oil prices have the small producers barely hanging on. In their words, they are “fighting for survival” and “on the brink of collapse.” They probably can’t handle another new expense.
If they survive, these producers will continue providing some of Colorado’s highest paying working-class jobs. In oil and gas, a smart, hard-working adult can make six figures without a high school diploma.
Colorado’s oil and gas regulations are the strictest in the country. If we need more regulations, the need is not urgent. It is not more important than the need for households to survive a viral and economic crisis.
The governor should ask the Oil and Gas Conservation Commission to take a hiatus. Let energy production, large and small, continue to keep food in Colorado’s cupboards. At a time like this, we cannot afford more unemployment.
The Gazette Editorial Board