The team of oil & gas lobbyists behind Gov. Hickenlooper’s agenda

It should come as no surprise that in the 2013 legislative session alone, the oil and gas industry spent $1.06 million defending Gov. Hickenlooper’s pro-Big Oil agenda.

As a Chesapeake lobbyist wrote in a January 2013 memo that the lobby firm accidentally emailed to state legislators, “[Gov. Hickenlooper’s] relationship to the oil & gas industry is strong and he has been a national leader speaking out against the anti-fracturing forces that have invaded Colorado.”

Gov. Hickenlooper has had a team of oil and gas lobbyists supporting his administration’s work to gut or kill legislation at the state capitol. In fact, a Colorado Ethics Watch report released this week found that oil and gas lobbyists outnumbered oil and gas inspectors by a 28-to-17 margin during Fiscal Year 2012-2013.

That investment has paid off big for Gov. Hickenlooper and the oil and gas industry during the 2013 legislative session.

Gov. Hickenlooper gutted a bill that would have set mandatory minimum fines for oil and gas companies that pollute rivers and water. After the bill died, his administration announced it would not fine Williams Company for polluting Parachute Creek, a tributary of the Colorado River, with cancer-causing benzene so long as it adhered to a consent order.

His administration actually opposed an effort to add more oil and gas inspectors out in the field and opposed a bill which would have brought more balance to the commission that oversees oil and gas drilling and fracking operations in the state.

With huge sums of lobbying cash behind him, it is no wonder that Gov. Hickenlooper has been able to keep Colorado weak on polluter crime when it comes to oil and gas.

The report released this week by Colorado Ethics Watch found that the oil and gas industry has spent a whopping $4.7 million on lobbyists from Fiscal Years 2008-09 through 2011-12 – more than any other industry in Colorado except the health care industry.

For those tracking Chesapeake closely, the company spent $130k on lobbying efforts over the last four years. Other top oil and gas lobbying spenders since 2009 include Pioneer Natural Resources at $640k, Shell at $571k, Encana at $415k, Bill Barrett Corporation at $376k, Marathon at $293k, Williams Energy at $285k, ExxonMobil at $272k, Anadarko at $260k, Black Hills at $224k, and, of course, the Colorado Oil and Gas Association at $402k.

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Behind the Latest Gulf Rig Count Numbers

Reuters reports that eight deepwater drilling rigs are expected in the Gulf of Mexico this year, which would bring the active deepwater contingent to 29 – just short of the number before the 2010 Macando accident. While that will be a positive step, here are some reasons to hold off popping the champagne corks:

The eight rigs are not yet in the Gulf, not yet working.While permit applications to work on Gulf jobs have been submitted, the rigs will return there only if the permits are approved.Given “A” and “B” above, it’s still premature to talk about Gulf drilling being back to normal or “close to pre-moratorium levels.”The eight rigs would bring the Gulf rig count to “just short of the level” before the administration’s permit moratorium, not equal to levels of two years ago.

But here’s the most important point missed by the report: The lost Gulf production caused by the moratorium – the difference between where production is now and where it was forecast to be by government officials a couple years ago.

According to the Energy Information Administration, Gulf production fell from 1.55 million barrels per day in 2010 to 1.32 mb/d in 2011, and was estimated to fall to 1.23 mb/d this year. That’s a 21 percent decline. But look at EIA’s 2010 forecast. Two years ago production was predicted to reach 1.76 mb/d this year. The difference between that forecast and the most recent Gulf production estimate is a whopping 30 percent.

Here’s a chart we’ve used before to illustrate the gap:

API’s Vice President for Policy Analysis Kyle Isakower:

“We should not forget that the (December 2011) Quest study demonstrated that without the moratorium, the rate of drilling was projected to increase, not just stay flat. We remind those following this issue that the baseline they should compare current levels to is the previously planned activity level, not just the activity level at the time the moratorium was put in place.”

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