New bill creates immense uncertainty and authorizes state and local policy that could have dramatic impact on the energy industry
FOR IMMEDIATE RELEASE
March 12, 2019
Contact: Cinamon Watson
CSPR Director of Policy and Research Chris Brown: “Just like Proposition 112, this bill has the potential to significantly restrict a critical sector of our economy and eliminate up to $13.5 billion in tax revenue in just 10 years between 2020 and 2030.”
Denver, CO – Today, the REMI Partnership released a new study that analyzes the impact of one of the most controversial bills introduced in the Colorado legislature this year, Senate Bill 19-181. The study, The Statewide Cost of Prohibitions, Restrictions and Regulatory Uncertainty in Colorado’s Energy Sector, seeks to answer the question, “What happens to state and local budgets and the broader Colorado economy if SB-181 prohibits new oil and gas development in whole or in part?”
SB 19-181 would allow for any number of new rules at both the state and local level that would either ban or dramatically reduce oil and gas development in Colorado, according to a new study released by the REMI Partnership.
“Just like Proposition 112, this bill has the potential to bring a significant sector of our economy to a grinding halt and eliminate more than $13.5 billion in tax revenue in just 10 years between 2020 and 2030,” said Chris Brown, CSPR Director of Policy and Research.
Provisions of the bill include:
- Allowing for any number of new rules at both the state and local level that significantly reduce the size of the oil and gas industry in Colorado.
- Restrictions up to and including, “an outright prohibition of oil and gas development.”
- Removing the requirement that technical feasibility and cost-effectiveness be used as part of the criteria for future permitting decisions and regulations over oil and natural gas.
- Granting exclusive authority to the COGCC Director to refuse any permit that he or she flags for additional review.
In order to estimate the impacts of different possible outcomes of the bill, including a worst case 100% reduction in new production, the study examined several scenarios to quantify the dynamic fiscal and economic impacts, according to Brown. The summary results for 2 of the 7 scenarios included in the report are:
- If SB-181 shuts down 50% of new oil and gas production the impacts by 2030 include:
- 120,000 fewer jobs across all sectors
- Over $8 billion in lost state and local tax revenue from 2020 through 2030
- Over $158 billion in lost GDP from 2020 through 2030
- If SB-181 shuts down 100% of new oil and gas production the impacts by 2030 include:
- 185,000 fewer jobs across all sectors
- Over $13.5 billion in lost state and local tax revenue from 2020 through 2030
- Over $257 billion in lost GDP from 2020 through 2030
About Common Sense Policy Roundtable: Common Sense Policy Roundtable (CSPR) is a non-profit free-enterprise think tank dedicated to the protection and promotion of Colorado’s economy. CSPR actively follows job and economic development legislation and public policy initiatives. Read more about our latest study here.
About the REMI Partnership: Common Sense Policy Roundtable, Colorado Concern, Colorado Association of REALTORS®, Colorado Bankers Association, and Denver South Economic Development Partnership have partnered to develop independent, fact-based analysis that quantifies the broader economic impacts associated with policy changes. The partnership has provided Colorado lawmakers, policy makers, business leaders, and citizens with greater insight into the economic impact of public policy decisions that face the state and surrounding regions. Read more about our latest study here.