Before the state raises taxes and fees on an industry, two top legislative Republicans want to know more about the problem with abandoned oil and gas wells in Colorado.
In a Aug. 22 story in the Denver Post by Christopher N. Osher, Gov. John Hickenlooper said he would ask oil and gas companies to help cover the cost of capping 700 to 800 “orphan wells,” whose owners have moved on and refuse to pay. The industry also might be asked to provide in-home methane monitors for nearby homeowners.
The governor laid out a raft of proposals for public safety that day, as the state’s response to a house explosion that killed two people in Firestone in April.
The state’s available budget to cap the hundreds wells would cover about 10 a year, Osher reported.
Sen. Ray Scott of Grand Junction, chairman of a state Senate Select Committee on Energy, and Rep. Bob Rankin, who sits on the Hoint Budget Committee, said they weren’t aware of the size and scope of the problem in a letter to Matt Lepore, the director Colorado Oil and Gas Conservation Commission, Wednesday.
“As members of the General Assembly and the Joint Budget Committee, this characterization is concerning to us,” the letter states. “We are not aware of this matter being raised or discussed in the context of submittals from the Governor’s office or the COGCC in recent budget cycles. Moreover, it is our understanding that existing statutory provisions referenced below are designed to provide the COGCC with the resources necessary to address the problem on a continuous basis.”
Asked about the letter, Scott told Colorado Politics, “It’s imperative that COGCC explain in detail why they ask for more funding when they already have existing funding and laws in place to guide their operations. In these days of tight budgets taxpayers want to know.”
Here is the full text of what Scott and Rankin sent Lepore:
Dear Director Lepore:
We are writing to request your assistance with an informational request regarding the size and scope of the abandoned well situation in Colorado. Recently Governor Hickenlooper suggested the abandoned well problem is so vast in scope that new taxes and fees are necessary to stand up a new organization to address the problem.
As members of the General Assembly and the Joint Budget Committee, this characterization is concerning to us. We are not aware of this matter being raised or discussed in the context of submittals from the Governor’s office or the COGCC in recent budget cycles. Moreover, it is our understanding that existing statutory provisions referenced below are designed to provide the COGCC with the resources necessary to address the problem on a continuous basis.
We would appreciate your prompt response to the following questions:
What is the most accurate, current inventory (number) of abandoned wells or locations that the COGCC is aware of and tracking? In which basin(s) are these wells or facilities located?
What is the most accurate, current forecast (number) of wells the COGCC anticipates are or may soon be in financial distress and have the potential to become abandoned? What is the COGCC’s timeline for this forecast? In which basin(s) are these wells or facilities located?
How many wells or locations has the COGCC remediated in each of the past five calendar years and in what basin(s) are these wells or facilities located? What is the aggregate and per project cost for the plugging and abandonment of these wells or facilities?
How many wells or locations is the COGCC is presently remediating and what are the projected costs for each of these ongoing projects in 2018 fiscal year?
To what extent has the COGCC utilized the required operator bonding as a funding mechanism to offset the costs of plugging and abandonment? Does the COGCC consider this funding mechanism to be inadequate? If so, does this suggest a need to consider adjustments to current bonding requirements?
To what extent is the COGCC using existing statutory funding mechanisms necessary to address the abandoned well situation, e.g. §34-60-122 C.R.S.? It would appear this existing statute gives the COGCC with the necessary funding, provided the fund balance is replenished via its share of severance taxes. Furthermore, other existing law makes clear that plugging abandoned wells is well within the ambit of “preventing or mitigating a condition that might result in significant adverse environmental impact”, §34-60-124 C.R.S.
Finally, has the COGCC examined its internal systems, policies and protocols to determine what, if any, impact staff review times, enforcement activities or other processes may be contributing to operator’s financial distress?
We appreciate your prompt attention to this request and look forward to hearing from you.
Cc: Henry Sobanet, Office of State Planning and Budgeting
Remember Colorado state Sen. Ray Scott’s face-off on Facebook a few weeks ago with some critics who complained that he had blocked them and hidden their comments? They wound up filing an ethics complaint with the legislature against the veteran Grand Junction lawmaker, citing in part a recent federal court ruling in Virginia that a public official in that state had violated a local constituent’s right to free speech by taking down negative comments posted to the official’s Facebook page.
The court found in that case that the official had acted “under color of law” in maintaining the page largely as a forum for public office, as well as in removing unwanted comments. Yet, only days after that ruling, the same plaintiff also lost a very similar case he had brought against another local government. Same U.S District Court but a different judge.
As we pointed out before, Scott isn’t alone in taking heat from detractors who assert a First Amendment right over his presence on social media platforms. Activists nationally appear to have embraced the tactic in taking on politicians with whom they differ. They’ve hauled several governors and even the president to court with similar claims.
Will the court uphold the right of elected officials like Scott to manage their own Facebook and Twitter accounts as they fit? Or, will public service mean that what was once an officeholder’s personal space is now a public forum?
State Sen. Ray Scott is embroiled in a legal battle that pits allegations the lawmaker was run out of the fireplace sales business against claims he consistently was late in making payments, accepted money from customers but delayed placing their orders and threatened to use his elected position against the fireplace manufacturer.
In a lawsuit filed in U.S. District Court in Denver last year, the Grand Junction Republican alleges Montigo Del Ray Corp., the fireplace company for which his Grand Junction-based business, Gas Products Corp., was the sole manufacturer’s representative, unfairly ended its relationship with him and gave its exclusive distributorship to the second company named in the lawsuit, California-based BTU Marketing LLC.
Scott filed his lawsuit after Montigo made several attempts to collect payments it claims Scott’s company owed. Not long after those collection attempts, Scott sent an email threatening to use his position in the Legislature against the manufacturer.
“I would think that someone who could protect your interest in this market and who serves on the energy commission would be a huge benefit, or I guess could be a huge problem under the right circumstances,” Scott wrote to Montigo executive Scott Baron in September 2012, a month after his distributor contract was terminated. “Wow. Now politics enters the picture, didn’t expect that one.”
Last week Colorado Politics was the first to tell you about Sen. Ray Scott’s talk on social media about taxing bicycles.
In an interview with us, the Republican pragmatist from Grand Junction said cyclists use the roads just like other forms of transportation, but unlike owners of those other forms of transportation, cyclists pay no taxes to help support the roads or services. Other vehicles, including motorcycles and ATVs, pay gas taxes and vehicle taxes and fees. As expected, the idea is getting pushback from cyclists.
Scott has a double purpose: to raise some much-needed money for transportation while exposing what he sees as a double-standard. And, thirdly, Scott loves to stir the pot of conversation and debate. He has a wicked sense of humor.
Can a bicycle outrun the tax man forever?
Here’s what Scott said Monday night on Facebook:
I’m a little shocked by the raw nerve I struck with my comments about leveling the playing field between cyclists, ATVs, snowmobiles and watercraft, when it comes to how we treat, and tax, these machines. But maybe I shouldn’t be, given how defensive bicyclists get when anyone raises the apparently politically-incorrect question of whether they benefit from a double standard and ought to pay a fairer share of the cost for the roadways they use with increased frequency. My attempt to start a conversation has been met with hysteria by some and reasonable ideas by others, reflecting a diversity of opinions on the subject that didn’t cut neatly along party or ideological lines.
The Denver Post, for instance, voiced support for bike taxes, while the Grand Junction Sentinel, came out hard against any discussion of the topic. The need to take swipes at me was the only thing both papers apparently agreed on. I’ve heard from normally-tax-averse Republicans supporting some type of tax, fee or assessment on bicyclists, and from Democrats who show zero support, even though their peers in liberal-leaning Oregon already have embraced the idea.
My tracking is showing a 50-50 split on both sides.
The 2018 legislation is still many months away, giving me plenty of time to weigh the wide variety of responses I’ve received and consider next steps. But I’m more convinced than ever, based on the live wire nerve I inadvertently struck when I raised the issue, that this is a debate worth continuing in the down time between legislative sessions, so that any concrete proposals that result can be refined and improved before the General Assembly meets again.
I sincerely appreciate the feedback and responses I’ve received, from all sides, and will be continuing to discuss the issue with colleagues and various stakeholder groups in the time between now and the next session. So keep those cards and letters, those tweets and emails and nasty-grams, coming, folks. This clearly is an issue the Coloradans feel passionately about, and something lawmakers might want to take up when we next meet.
Scott is planting seeds to yield food for thought, but he’ll have a hard time on this one. Cyclists have good friends in the legislature, including passionate riders in both chambers. But he also will have a hard time nailing down all 18 members of the Republican caucus in the Senate. The GOP has only a one-seat majority, but then again Democrats do like a tax for bike lanes and the great outdoors, so don’t count Scott out yet.
“We will be proposing something similar,” Scott posted. “They use the roads also.”
In an interview with Colorado Politics, Scott said he’s soliciting feedback to see if it’s viable, but he’s serious in his consideration.
“One way to get feedback is to put it out there and see where it goes,” he said.
Every other vehicle has a tax or sticker, but bicycles, which are ubiquitous on Colorado roads, get a free pass, even though they often have dedicated lanes, law enforcement and other taxpayer-funded public services.
“Maybe we should start from the other direction,” Scott said. “If we’re not going to tax bicycles, then let’s not tax boats, ATVs and every other vehicle out there that already pay all these taxes … how many rights do we give to cyclists that we don’t give to everybody else on the road? I’m asking.”
In Oregon, Democrats included a $15 excise tax on the sale of bicycles that cost more than $200 with a wheel diameter of at least 26 inches, so kids bikes are exempt. The tax was promoted by Democratic Gov. Kate Brown.
According to Fox News, Oregon Republican Party Chairman Billy Currier called out Brown for “anti-healthy, environmentally-unfriendly policies” who “continues to view the people of her state as nothing more than a piggy bank to fund her efforts to impose job-killing policies.”
Sen. Andy Kerr, a Democrat from Lakewood and a cycling enthusiast, didn’t think much of Scott’s idea.
“So the Republican Party now wants to put a special tax on my 13-year-old, who rides an adult bike?” he said. “Do they want to tax all students who ride their bikes to school, or anyone who likes to use their bike to get to work?
“Utterly ridiculous. People riding their bikes helps get people out of their cars, which in turn reduces traffic and wear-and-tear on our roads. We should be working to expand transportation options, and not decrease them with an anti-business, anti-freedom policy this Republican ‘bike tax’ would be.”
Sen. Mike Merrifield from Colorado Springs, another cycling Democrat, said the proposal is misguided.
“We should be encouraging people to go biking, not making it more difficult and expensive,” he said.
In the last session, House Bill 1242, co-sponsored by Republican Senate President Kevin Grantham of Canon City, would have imposed 0.50 sales tax for transportation projects statewide, which lawmakers for most of the session called their top priority.
Scott’s post Wednesday morning drew more replies than likes.
“I own 3 houses in CO, have 4 cars registered here too,” replied Susan Shepherd, the former Denver City Council member. “Hubby is the senior-most biz partner of a firm that has $3-4 M in annual earnings. We pay tons in taxes annually, several times the annual salary of a state legislator. Why should I have to pay an extra tax when my kid and I are bicycling on roads and streets? CDOT and municipalities need to get their priorities straight!!!”
Grand Junction orchard owner Josie Bolton posted in reply to Scott that bicycles shouldn’t be taxed because they don’t damage the roads.
Scott replied to the post, “Snowmobiles don’t hurt the snow, ATV’s don’t hurt the dirt, boats don’t hurt the water and they pay a tax, maybe we should eliminate those taxes.”
Editor’s note: This blog was updated to include comments from Colorado Politics’ interview with Scott after his Facebook post, and again to add reaction from Kerr and Merrifield. Also I corrected that it was the Senate Finance Committee, not the Senate Transportation Committee that spiked the bill.
A lot has changed in the wake of the oil and gas industry-linked explosion at the end of April in Firestone that killed two.
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