The process of hydraulic fracturing, or fracking has revolutionized oil and gas in the U.S. Imports are down; production is booming, and even the economy is showing signs of life again.
But fracking in Colorado has yet to get the credit it rightfully deserves. In a state that thrives with this drilling technology – a technique that typically uses large amounts of pressurized water mixed with sand and/or chemicals to extract gas and oil from deep below the earth’s surface – it has a bum rap.
Environmental groups and citizens of Colorado alike are leading the charge in a growing trend to ban the use of fracking. They claim that the environmental impact is too grave.
Two Colorado towns have already imposed a ban. Now other communities threaten to follow suit.
But what about the upside?
Colorado produced more oil in 2012 than it has in 55 years, and according to Bloomberg, natural gas production has gone up 27 percent from 2007 to 2011. Fracking has helped steer the state’s economy in the right direction and the oil and gas industry employs more than 48,000 workers there.
Still, anger persists over its use. And while bans and restrictions catch fire there are even talks of imposing a statewide ban on fracking though a 2014 referendum measure.
Included in that referendum are 10 measures, one of which has already been passed – a more rigorous set of requirements for companies who might be faced with a spill. Others that were proposed included strict fines, public health standards and greater groundwater testing for wells.
The heat is definitely on the oil and gas industry in Colorado. This one new piece of legislation could be the fuel that stokes the whole fire.
Colorado’s Battleground
With a political shift taking place throughout the state, energy has become a huge issue, and now more than ever it is a time to ramp up preventative measures.
Colorado is the nation’s fifth-leading producer of natural gas and number nine in oil – it’s a big part of the economic upswing taking place throughout the country, but it’s also not as friendly to energy producers as in years gone by.
The industry stands to lose a lot if this matter gets out of hand. And that’s why one group – the Western Energy Alliance, made up of roughly 400 oil and gas companies, has increased its advocacy budget from $200,000 to $1 million to educate voters about fracking.
That seems to be the one major roadblock – education – people don’t fully understand the drilling process, and because of it, they want to see restrictions. It’s happening throughout the country – from sea to sea.
But it’s in Colorado where communities have been more on the offensive. Protect Our Colorado, a coalition of residents, environmental groups and companies like the apparel retailer Patagonia Inc. are pushing for an all-out ban on fracking.
The community of Longmont overwhelmingly approved a ban on fracking in November. Fort Collins had a similar ban lifted only after Prospect Energy LLC, who operates within its city limits, agreed to stricter guidelines than imposed already by the state.
And the city of Boulder seems to be the next in line to duke it out over fracking restrictions. Just last week, two opposing organizations, FrackNation, showing the upside to drilling, and GasLand2, the opposite, each screened a film to residents of the community. There is a moratorium to be held by the city council on June 4.
Great Expectations
And all this is happening while Colorado is experiencing an explosion of natural gas. In its Piceance Basin which is being hailed as “The Gas Factory” for its copious amounts of natural gas, there is one shale reserve that stands out above the rest:
The Niobrara Shale stretches from Colorado out into Kansas, Nebraska and Wyoming.
One well that was just revealed last month produced over one billion cubic feet of natural gas in its first 100 days of operation. That same well is expected to produce in a matter of months what some wells produce in a life span of 30 to 40 years.
Now is not the time to rage a war, and with results like in the Niobrara, the gas and oil industry can ill afford to lose control of Colorado. The expectations are simply too great.
Companies who could reap those rewards while fighting off the aggressors are West Energy Alliance members Anadarko Petroleum Corp. (NYSE: APC) of Texas and Devon Energy Corp. (NYSE: DVN) based out of Oklahoma.
And throughout Colorado, there seems to be a surge in exploration.
Just last week, Lakeside Minerals bought up over 2,000 acres of Bull Mountain for exploration. The area had always turned up dry in the past, but then again, drilling isn’t what it used to be.
And the same goes for other regions and counties like in Larimer, where Context Energy purchased leases there.
These are promising signs amid Colorado’s volatile resistance to fracking, but Colorado has always been an oil and gas state – all the more reason for industry officials to be wary of opposition.
If a ban takes place on Colorado fracking, it’s essentially a ban on Colorado gas and oil development, and a threat to the very way of life that Colorado has come to know.
