How far does a national park extend past its boundary line? In the case of the Great Sand Dunes National Park, we’re told the boundary stretches past the gate, over a mountain range, and across a valley on the other side. That’s according to anti-fossil fuel activists working to stop oil and natural gas leasing east of the park and on the other side of the mountains on lands managed by the Bureau of Land Management for multiple uses.
SANTA FE — A former New Mexico state senator goes on trial this week on corruption charges in a high-stakes showdown with state prosecutors. The case comes to a head as scandal-weary voters consider creating an independent state ethics commission to shore up oversight of elected officials.
A group of environmental groups Thursday filed a lawsuit in U.S. District Court in Denver to block the Windy Gap Firming Project, a project being developed by the Northern Colorado Water Conservancy District that would divert water from the Colorado River to the northern Front Range, beginning around 2022 or 2023. The environmental groups suing […]
Sometimes, bad things happen to good people. How you react when bad things happen is what counts. The same holds true for municipalities.
Back in 2004, the good people of Lamar embarked on a process which turned out badly for them indeed. The Lamar Repowering Project, an initiative of the Arkansas River Power Authority to convert an old gas-fired power plant to coal (remember that coal was considerably cheaper than natural gas at the time), was intended to be a reasonably run-of-the-mill effort to convert an aging plant, extend its working life, and provide electricity for Lamar and the surrounding region for years to come. So, Lamar and the other members of ARPA, agreed to finance the project by taking on a $146 million bond debt.
What followed was an almost perfect storm; bad luck, bad timing, bad design and engineering flaws, and more than a little malevolence on the part of a radical environmentalist group all conspired to doom the project. After environmental litigation firm WildEarth Guardians sued over a defective boiler that failed to meet emissions standards, the project was shelved – but Lamar, and the rest of the ARPA members, still had millions of dollars of debt to pay off.
Arguments over who is mostly to blame for the debacle will probably continue for years. There is plenty of blame to go around. ARPA was somewhat short-sighted, and made some poor timing decisions; some might argue that switching to coal rather than just upgrading the gas plant was rather foolish. On the other hand, the member municipalities did agree to take on debt for the project, even agreeing to further debt after an initial round of cost overruns. The manufacturer of the defective boiler was culpable for their part. And of course WildEarth Guardians, the only players to come away from the mess scot-free, dealt the final, fatal blow.
But everyone can agree that Lamar got the worst end of the entire deal – millions in debt, and no power plant to show for it. In fact, since Lamar’s plant was the one chosen for the project, it is now the only one of the six ARPA member communities to not have a plant.
Lamar ended up filing a lawsuit to get out of paying its share of the debt. While the merits of that lawsuit may be subject to question, the city did ultimately accept a mediated settlement. The settlement offer includes a one-time payment to Lamar of $1 million, and subsequent yearly payments of $400,000 for the next 26 years – a total of $11.4 million, designed to compensate Lamar for the loss of their plant – and a restructuring of the debt, cutting the interest rate roughly in half.
This is as good a deal for everyone as can be expected from a disaster like this. Lamar gets some compensation, and each member pays considerably less on overall debt service.
Only now there is a new wrench being thrown into the works; the town of La Junta has decided to reject the settlement, jeopardizing the agreement, and risking the lawsuit going back to court.
The reasons given by La Junta are disappointingly short-sighted. They are apparently upset at the $11.4 million being paid in compensation to Lamar. Now granted, cutting their share of the Lamar compensation would benefit La Junta financially in the short term, at least by a few thousand dollars. But even ignoring for a moment the fact that Lamar is the community most directly financially hurt by the failure, what will be the options for La Junta if the lawsuit is revived?
If La Junta goes ahead and rejects the settlement, and Lamar pursues its lawsuit and is victorious, the remaining ARPA members – including La Junta – will each have to pay back a greater share of the debt, with Lamar out of the picture, and its share now spread around. And they will have to do so under the original 5-6% interest rate, not a refinanced 3-4% rate.
Even if Lamar loses its case, La Junta and the rest of the ARPA members will be paying more than they would under the settlement, as there will be no settlement, no restructuring, no reduction in the debt service. Either way, La Junta loses.
There is one more thing to consider, and that is the effect on the municipal bond market if the lawsuit goes to court and Lamar prevails. That will set a precedent for other jurisdictions around the country to look to if they end up with bond debt. If other jurisdictions decide that they can sue their way out of bond debt, then suddenly municipal bonds become high-risk, and the interest rates that will be attached to them to mitigate that risk will make bonding for public projects far more expensive than they are currently. Expenses that will be paid for by the taxpayer.
In this new age of out-of-control environmental litigation threatening just about every development project out there, that is a risk we cannot afford to take. La Junta should accept the settlement and save its taxpayers from another financial mistake.
Colorado Attorney General Cynthia Coffman is throwing her support behind the U.S. Bureau of Land Management as it defends itself in court against environmentalists opposed to oil and gas development projects.
The environmentalists are pursuing a federal lawsuit to halt Bureau of Land Management oil and gas leases in Colorado, Wyoming and Utah.
The oil companies plan to drill for oil and use hydraulic fracturing, or fracking, on 379,950 acres of public lands.
Despite a growing list of climate change doubters and fossil fuel industry supporters and executives comprising the list of Trump administration cabinet nominees, Democratic Colorado lawmakers and environmentalists are hopeful the state’s clean energy economy and outdoor recreation industry can continue to thrive.
Mostly, though, there’s a growing sense of dread from the conservation community as President-elect Donald Trump picks people like Republican Montana U.S. Rep. Ryan Zinke for the post of Interior Secretary, former Republican Texas Gov. Rick Perry for Energy Secretary and ExxonMobil CEO Rex Tillerson for Secretary of State. Oil and gas industry representatives, meanwhile, are eagerly looking forward to Trump’s inauguration Jan. 20.
About a third of Colorado is owned by the federal government and managed by the U.S. Forest Service, Bureau of Land Management and National Park Service. Coal mining and oil and gas companies have for the past eight years of the Obama administration lamented environmental regulations perceived as hurdles to energy production on public lands.
Colorado Gov. John Hickenlooper's actions regarding oil and natural gas development make him unfit to serve as interior secretary, 11 environmental groups said in opposing his possible appointment to the position.
The groups, including at least three based in Colorado, sent an Oct. 15 letter to Democratic presidential candidate Hillary Clinton that asked her to appoint a proven climate champion as secretary of the interior, should she win the White House. The letter said the groups feel Hickenlooper, seen as an advocate of oil and gas drilling and rumored pick for the position, does not meet that criteria.
There’s no issue more partisan in Colorado than energy production, so it’s not surprising that opinions of Gov. John Hickenlooper’s draft executive order on climate change are divided right along party lines. But some observers are surprised the governor is going there at all.
“We do not have a state record of governors using executive orders the way the president of the United States does, and therefore I would characterize Hickenlooper’s actions as unusual for the Colorado chief executive,” said Bob Loevy, professor emeritus of political science at Colorado College. “Governors don’t ordinarily use administrative orders for things that are politically controversial in Colorado.”
One coal-fired power plant in Colorado will shut down and part of a second plant will stop operating under an agreement that will make deep cuts in air pollution but cost at least 90 jobs over the next decade, officials said Thursday.
The federal government needs to consider greenhouse emissions and the potential contribution to climate change before allowing oil and gas development on public land, two environmental groups asserted Thursday in a lawsuit over drilling in Western states.