Colorado Voters Reject Drilling Limits in Win for Companies

Nov 07 2018, 4:36 AMNov 07 2018, 6:17 AMNovember 07 2018, 4:36 AMNovember 07 2018, 6:17 AM

(Bloomberg) -- A $42 million battle over drilling in Colorado ended in a victory for Anadarko Petroleum Corp., Noble Energy Inc. and other D-J Basin explorers.

Voters on Tuesday rejected a plan to force oil and gas development further away from residential and environmentally "sensitive" areas, illustrating the industry’s influence in a state that is producing more crude than ever before. Proposition 112, which would have curbed drilling on more than half of surface land, failed with 57.5 percent voting to reject and 42.5 percent voting to approve.

Oil and gas companies raised more than $41 million to defeat the measure, compared with just $1.3 million gathered by proponents. Other companies poised to benefit from the outcome include BP Plc, Extraction Oil & Gas Inc., PDC Energy Inc., SRC Energy Inc., HighPoint Resources Corp., and Bonanza Creek Energy Inc.

The push to limit development in the Rocky Mountain state comes as oil production soars to record highs, driven by activity in the prolific D-J Basin just north of Denver. As of August, Colorado output reached 477,000 barrels a day, leading the state to overtake California and become the fifth largest producer in the nation. But the boom’s proximity to Denver’s suburbs has raised concerns about health and safety, especially after an Anadarko gas line explosion last year killed two people and leveled a home.

Though the measure failed at the ballot, Colorado’s legislature may take action early next year to further regulate the industry. House Majority Leader KC Becker, a Democrat representing Boulder county who endorsed Proposition 112, has said the statehouse will consider legislation tackling funding for orphan wells, air and water monitoring, greater local control over siting and potentially a setback from infrastructure.

"We’ll push harder to get something done during the first half of the session" which runs from January to May, Becker said in October. "No one will be perfectly happy. What we want to get done is turn down the volume on this whole thing and address people’s basic concerns."