Big Oil in the Rocky Mountain State

June 22, 2017

Colorado, oil & gas industry

A home explosion in Firestone in April has become a symbol for the volatile relationship between Colorado citizens and their government and the oil & gas industry. [Dennis Herrera/Special to The Denver Post]

The Overwhelming Tawdriness of Government in Colorado
Guest post by Phil Doe*

After five months of doing nothing of value, although spending millions in the furtherance thereof, the Colorado legislature closed up shop last month. The people should demand a refund for nonperformance, but instead they will have to ante up more money to pay legislators and other top state and county officials. The wages of nothingness are great. In 2019, the legislature will award itself a 41 percent pay increase; the governor a 39 percent increase.

Pay increases for top-of-the-pyramid public servants had already been realized in Weld County, the epicenter for the fracking wars in Colorado. There, the county commissioners received a 37 percent increase in pay to $120,000, plus retirement and health benefits. Later, as antidote to the red-faced disease, the salary was scaled back to $105,000, only a blushing increase of 17 percent.

The average salary of teachers in Weld is $37,000.

The generosity of Weld County taxpayers lavished on their commissioners was somewhat muted by an IRS audit to determine if the cash allowance the commissioners receive for driving to work each day should be considered taxable income. An estimated $500,000 has been paid out to commissioners in untaxed driving benefits over the years. Recently, the big winner in the driving-the-old-jalopy-to-work sweepstakes was Barbara Kirkmeyer, having received $22,000 in driving dividends over the past two years. She, once an aide to former Republican governor and Texas oilman Bill Owens, is the Dragon Lady of fracking in northern Colorado. An early defender of fracking in neighborhoods, she has long claimed the state regs are adequate for public safety. After all, she lectures knowingly, fracking is good for business and government budgets.

As for the state legislature, it did manage to do one thing of note. It mortgaged public buildings to raise almost two billion for road repairs. The governor says it isn’t enough, but an increase in gasoline taxes or any other use fee is verboten among Republican legislators, and the Democrats continue to blame all government failures on the citizen enacted Taxpayers Bill of Rights, TABOR, which requires a vote of the people to enact a tax increase. Oddly, the Dems claim that it is TABOR that has made them impotent, that it is a threat to representative government where elected officials should be the tax deciders, not the people legislating directly via the initiative process. One of the leaders in the misguided and failed endeavor to overturn TABOR, Andy Kerr, is now running to replace U.S. Congressman Ed Perlmutter. The flawlessly undistinguished Perlmutter relentlessly climbing the greasy pole now wants to replace the term limited Hickenlooper. He has plenty of undistinguished company.

Of course, the mortgages on public buildings for road repairs will have to be paid back with interest, further inhibiting state budgets. Still, the mortgage razzle dazzle was regarded by the Denver Post, the state’s flagship daily, as a grand compromise, worthy of nodding recognition.

On fracking, long the biggest and most rancorous issue in the state, nothing was done to polish that rotten apple. Two small bills were introduced. Both were defeated. One would have required the mapping of all oil and gas lines in the state. Anadarko, the state’s largest fossil fuel producer, used its well-heeled powers of persuasion on some willing Republican legislators, and defeated this extremely modest bill in the waning days of the session. According to the Bureau of Transportation Statistics there are roughly 1.6 million miles of gas lines in the United States. Other sources say there are 2.5 million miles of gas lines. There is general agreement that there are about 150 thousand miles of oil lines in the nation. In Colorado there are reportedly about 45 thousand miles of both. However, none of these estimates include what the feds call service lines, the lines the industry uses to provide energy to its own equipment. These service lines figure large in the following narrative. And be mindful that with the exception of interstate lines, which the feds regulate with a miniscule workforce, the intrastate lines are the bastard child in the state’s regulatory framework. The state’s PUC seems to be marginally responsible, but as a general rule they go unregulated in a state with supposedly the “strongest oil and gas rules in the country.”

Several days after defeat of the pipeline inventory bill, in the town of Firestone, at 6312 Twilight Avenue, a house exploded killing a young man and his wife’s brother, a licensed plumber. They had been repairing a hot water heater in the basement. His wife, a science teacher, was critically injured. Their young son,was less injured, if you don’t consider losing a father a form of injury. Firestone is in Weld County.

The industry though muffled in its response, suggested plumber error. Almost immediately the local fire department pinned the explosion on a subterranean natural gas leak seeping into the house. Shortly thereafter the leak was discovered to be coming from a small service line at a well owned by Anadarko, the same bunch that had squelched the legislation to inventory all pipelines only days earlier.

No explanation has ever been given as to why Anadarko didn’t notice that it was losing gas production from an open valve that bled into the small pipe that had been severed underground next to the home at 6312 Twilight Lane. Natural gas is odorless until an odorant, called mercaptans, is added giving gas its characteristic rotten egg smell. The vertically integrated industry make mercaptans from other fossil fuels so that the methane heating your home smells and so that hopefully you don’t blow yourself up.

Grandstanding, Anadarko sprang into action, calling for “an abundance of caution,” it voluntarily shut down 3000 wells. But all is not what it seems. The wells closed down are all low producers, and in combination are responsible for an estimated 3 to 5 percent of Anadarko’s annual production in the state. The wells that people are really concerned about, the new ones with 20 to 50 wells on a pad, that can come as close as 500 feet from a residence are not part of their abundance-of-caution investigation. The immediate hiring of Ken Salazar, the former Democratic senator from Colorado and Obama’s Secretary of Interior, as their lawyer was part of their abundance-of-caution campaign, however.

Governor Hickenlooper quickly joined in. No longer claiming fracking was safe, at least for the moment, he vowed to get to the bottom of things. He asked Anadarko to investigate its own accident and get back to him with recommendations. In this regard he has asked the industry to look at all its small service pipes at old vertical well sites to ensure their integrity. Inexplicably, he too has accepted the new industrial size fracking well sites presumably under the dodgy logic that, since the accident’s source was a vertical well, it is only vertical wells that pose a threat to human life and safety. The industry is to inspect roughly 19,000 of its wells. That leaves 30,000 active wells, another 58,000 closed and abandoned wells, and 45,000 miles of intrastate pipeline uninspected and presumed safe.

He has given the industry 60 days to get this mess behind them. Anadarko and others have asked for an extension.

Admission: I, as environmental director for Be the Change, a grassroots organization in Colorado, have authored three letters to Hickenlooper asking for, among other things, an independent investigation. Reminding him that we don’t allow killers to stage their own trials, and we shouldn’t allow Anadarko to explain what they did and the risks these activities may pose to the public over the long-term, especially the risks associated with pipeline maintenance and oversight. Sixteen other grassroots groups have signed on. We have heard nothing from the governor.

Map of oil & gas wells and pipelines in town of Firestone, CO

Matt Lepore, a former industry lawyer and Hickenlooper’s director of the Colorado Oil and Gas Commission, with industry oversight, immediately reassured people that this was an incident that had very little chance of happening again. A few days later a contract worker was killed when a pipeline he was working on at an Anadarko storage facility exploded. Anadarko’s stock has plummeted, and one small stockholder is suing over managerial incompetence. [In mid-May, another gas leak at explosive levels was discovered in a home in De Beque on the West Slope.] Even more recently a large underground raw gas storage reservoir in sparsely populated eastern Colorado was found to be leaking. Shades of Aliso Canyon, people were evacuated within a two-mile radius. It got little attention in the metropolitan press, and was unremarked upon by the governor. There are nine of these reservoirs in Colorado. None is as big as Los Angeles’ Aliso Canyon but in total they store more. Some are close to metropolitan areas, and people live within their boundaries, for they are nothing more than old played out gas formations. This is raw gas that hasn’t been purified, so it is laden, as my compatriot Wendell Bradley reminds me, with compounds such as benzene. Yes, we produce way more than we need so we rebury a lot of the poisonous stuff right under people’s backyards. This must be perplexing to Chicago School types, for the markets can’t seem to save us from gross overproduction and reburial!

After pipelines, one of the worst loopholes in the state’s regulatory framework is the setback rule. It doesn’t apply to home developers. It only applies to the oil industry. Thus as Colorado continues to grow at a rapid rate, developers are free to ignore the 500 foot setbacks from residential building and 1000 feet for schools, hospitals, and high density housing. Though neither setback has any scientific basis — it seems to be a warped utilitarian concept that killing a few at a time is better than killing many — the setback rules have provided good fodder for the industry and its apologists in government such as Weld County Commissioner Kirkmeyer, Director Lepore, and Governor Hickenlooper.

But the Firestone tragedy exposed the sham. As it turns out, the setback rules really have nothing to do with protecting human health and safety, but much to do with duplicity and deception. The setbacks may be for drillers, but developers can build as close as 70 feet to oil facilities in many counties. In fact, homes have been built right over old abandoned wells, many more are in streets and the backyards of new residential developments. The governor has said he is willing to review this obscenity to fair dealing and public protection. But review in his argot is just another word for delay as those who were forced to witness the deliberations of his Blue Ribbon panel on fracking, of a couple of years ago, can attest.

The stench of corruption and contempt for the people who are in the crosshairs of the urban drillers is so pervasive in this state that many have lost their sense of smell. This is not an unknown phenomenon in nature or social structure. Hydrogen sulfide is a deadly gas that has an acrid smell as early warning, but as a broad spectrum poison it quickly deadens the senses, including the sense of smell, to mask its deadly potential. Olfactory fatigue it’s called, making it impossible for many to smell the corruption that is destroying our neighborhoods, our environment and any residual belief in democratic processes.

Similarly, in Silent Spill, author Thomas Beamish records how the largest oil spill prior to Deepwater Horizon went uncontrolled for years. It occurred at an oil field belonging to the Unocal Corporation along the coast of California, north of Los Angeles, at a place called Guadalupe Dunes. It endured for 39 years. Oil production was a big part of the local economy, so as Ibsen could explain looking the other way could be expected, especially from local politicians and people and businesses dependent on the oil industry. But since it was not a dramatic event, like the Exxon Valdez tanker disaster, the people in charge were basically allowed to ignore the devastation and the local population became inured to what was happening to their environment.

The Firestone tragedy was dramatic, no silent spill that. Clearly, Firestone has resulted in national attention and has raised awareness of the suffering people in the sights of the industry, greedy developers, and a complicit and thuggish government must endure.

A recent court decision will add to the drama. The Colorado Court of Appeals ruled for the kids when they challenged the COGCC regulations as not protective of their right to a livable environment, Martinez v COGCC.

The COGCC had argued that its mission was dual — to protect human health and the environment 50 percent of the time and encourage oil and gas development the other 50 percent of the time. They actually got a pliant lawyer, Jake Matter, from of the Attorney General’s office to make this argument in court. I witnessed it, and he seemed not to be embarrassed by the absurdity of his assertion. Thus intellectually equipped, he might just as easily have argued that the fire department’s job is to put out fires 50 percent of the time, and start them the other 50 percent.

The kids had asked for “a rule to suspend the issuance of permits that allow hydraulic fracturing until it can be done without adversely impacting human health and safety and without impairing Colorado’s atmospheric resource and climate system, water, soil, wildlife, other biological resources.”

The Court reminded the COGCC that its own website supported the kids’ request and, that the law itself did not support its contention: “The plain meaning of the statutory language indicates that fostering balanced, non-wasteful development is in the public interest when that development is completed subject to the protection of public health, safety, and welfare.”

Cagily, Hickenlooper said he would not contest the decision, but he did not go so far as to direct the COGCC to start rulemaking as the court had directed. Instead, he allowed the COGCC, an agency within his executive branch, all of whose members he had appointed, to ask for an appeal to the state supreme court. This gave the state’s Attorney General, Cynthia Coffman, the wife of Republican U.S. Congressman Mike Coffman, a state client, though she may not have needed it since she had already taken it upon herself, using taxpayer money of course, to sue Boulder County on behalf of the oil industry over its oil and gas regulations, or lack thereof. She, too, is reportedly considering a run for governor and a divorce.

In a sense Hickenlooper had created a constitutional crisis by giving his authority as the state’s chief executive over to the state’s oil-industry-fawning attorney general. Some have argued this outcome was predictable because it is the oil industry that is in charge in this state and has been for a very long time. The actions of the Governor and the AG tend to confirm that assessment.

The drama surrounding the COGCC decision is revealing. The commission, according to its chairman, voted unanimously in favor of referring the appellate decision to the high court. That assertion was later contradicted by Dr. Larry Wolk, the state’s head of public health and COGCC board member. He claims he abstained, but he may have been channeling the recent court decision in Michigan. There, the director of the Michigan’s Department of Public Health and Human Services has been charged with involuntary manslaughter and misconduct in Flint’s drinking water crisis. That state’s chief medical officer has been charged with obstruction of justice.

That the COGCC and the Governor never had any intention to abide by the Appeals Court directive to go into rulemaking to protect human health and the environment should be clear. For not long after the Firestone explosion, and after saying a few words of atonement over the tragedy, the COGCC quickly went to work approving hundreds of drilling permits.

As for the Appeals Court decision, it didn’t take the Denver Post long to come down on the kids. They were the unwilling dupes of rabid environmentalist intoned the Post. This is a paper owned by a Wall Street hedge fund that has savaged its reporting staff in the interests of the bottom line. The CEO is Mac Tully. He is a proud member of Colorado Concern, the by-invitation-only organization of CEO’s who insist they know how the state should be run. It is resplendent with oil executives, and was the guiding force behind Initiative 71, which effectively repealed the people’s right to write law by means of the initiative.

It’s hard to see any light through this impenetrable morass of bad government serving the interests of dictatorial corporate control. Can revolt be far behind?

********************

*Phil Doe is environmental director for Be The Change, and has been fighting for Colorado’s water for most of his adult life. He served as Bureau Chief and Environmental Compliance Officer for the Bureau of Reclamation in the Department of Interior and was featured as a whistleblower on 60 Minutes. A former professor of English literature, he has published op-ed features in Rocky Mountain News, Denver Post, Colorado Central Magazine, and Counterpunch. His past grassroots efforts opposed the Animas-La Plata water project in southwest Colorado. He is a registered citizen lobbyist at the State Capitol and testifies at the federal and state legislative level on natural resource issues. He serves on the board of the grassroots group, Be the Change, and directs their environmental issues program, with a current focus on horizontal hydrofracking.

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