Colorado Capitol Report

The Colorado Chamber’s Lobbying Agenda: Fast and Furious

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State Policy News

CACI’s Lobbying Agenda: Fast and Furious

Since the legislature convened in early January, the CACI lobbying team has been extremely busy assessing the introduced bills, bringing them before the various CACI Councils for discussion and then lobbying the bills based on the Council’s decisions as well as testifying before the committees.

In addition, the lobbying team also monitors many more bills that may have an impact on the business community but that are not ready to be put before a Council for consideration.

Legislative committees last fall heard presentations by various state departments and agencies, which then freed the committees up this year to dive right into considering bills.

Consequently, many of these bills were “not quite ready for prime time” and have required considerable work by CACI lobbyists and other business lobbyists to have the bills amended in committees to address the concerns of the business community.

To date, CACI and its Councils have taken positions on almost 30 bills or soon-to-be-introduced bills.  Of these proposals, the following eight have died (CACI’s position on a bill follows the abbreviated title of the bill):

  • SB-10, “Manufactured Home Communities”  Oppose
  • HB-1226, “Local Governments Authority to Regulate Plastics” Oppose
  • HB-1058, “Voluntary Labeling Genetically Engineered Food”  Oppose
  • HB-1075, “Deferral Unemployment Insurance Benefits,”  Oppose
  • HB-1091, “Accurate Experience Modification Workers’ Comp”  Oppose
  • HB-1165, “Private Construction Contract Retainage & Payments”  Oppose
  • SB-74, “Repeal Damages State Employment Discrimination Claims” Support
  • SB-134, “Repeal Statutory Water Quality Fee Schedule”  Oppose

For information on CACI’s lobbying agenda, contact Loren Furman, Senior Vice President, State and Federal Governmental Relations, at 303.866.9642.

Colorado Air Panel Adopts Stricter Rules on Oil-and-Gas Industry; First State to Include Methane

After four days of hearings last week the Colorado Air Quality Commission on Sunday approved, by an eight-to-one vote, new, stricter rules on the oil-and-gas industry aimed at reducing emissions.  The adopted rules regulate methane, a first not just in Colorado, but for anywhere in the country.

The proposed rules were developed and supported by a group pulled together by Governor John Hickenlooper, including several oil-and-gas operators, as well as environmental groups.

For many other operators, however, questions remain about the costs and benefits of the rules, and whether revisions to the proposal would allow similar emission reductions to be attained in a more cost-effective, achievable and reasonable manner.  Alternative proposals encouraged the Commission to reconsider the “one size fits all” approach to the rules, and to consider to differences in Colorado’s basins, especially between the Non-Attainment Area and the Attainment Area, in the regulations.

The U.S. Environmental Protection Agency (EPA) has designated nine Colorado counties as the Colorado’s “Non-Attainment Area.”  The counties are: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, Larimer and Weld.

Two major trade associations, the Colorado Petroleum Association and the Colorado Oil and Association, both CACI members, opposed the new rules.

Three leading operators, each of which is a CACI Silver Partner, supported the new rules: Anadarko, Encana, and Noble Energy.

carly-dollarCarly West (pictured at left), CACI Governmental Representative, testified before the Commission on Saturday morning.  Here’s an edited version of Carly’s prepared testimony:

Need for the Proposed Rules

The proposed rules before you today were ostensibly developed to address growth in oil and gas production.  However, it is worth noting that growth is currently only projected in the Denver-Julesburg Basin, part of the Non-Attainment Area.

“No rule-specific modeling was conducted by the Air Pollution Control Division or the Regional Air Quality Council (RAQC) to support the proposed rules, and the modeling sensitivity analyses of the Davis Graham Stubbs (DGS) Client Group has shown little or no benefits of the rules in the Non-Attainment Area, and there are simply no modeling analyses that show these controls will materially reduce ozone formation across the rest of the state.

Additionally, the proposed rules are more stringent than Federal rules, but due to this lack of modeling, the Division’s proposal is much less rigorous than required by the EPA under the Federal Clean Air Act.  Also, the Division’s proposal would have the practical effect of doing away with the non-attainment area for a single industrial sector.

The Non-Attainment Area is designated for a specific reason, and ensures local input concerning the manner in which control strategies are selected.  It was proposed by the Governor and approved by the EPA.

This proposal cuts out those necessary steps in ensuring local accountability and partnership in support of selected controls.

Costs of Proposed Rules

We share concerns expressed by others that the Division has greatly underestimated the costs of the proposed rules, and that the actual costs will have tangible impact on small, marginally producing wells all across the state, not just in the non-attainment area where growth in production is projected.

Additional operating costs associated with the proposed rules are estimated to push many of these wells over the line to where revenues cease to cover operating expenses, leading to wells being shut in rather than continuing to operate.  This loss of business and resources to our state is not insignificant, as the Final Economic Impact Analysis submitted by the Joint Industry Work Group estimates.

Though not a prediction of the future, it presents a very plausible potential loss of over a billion dollars in lost revenue to producers, royalties and severance taxes and 125 million barrels of oil not produced.

Production in these areas of our state is an essential piece of struggling local economies, which are dependent on the industry for funding essential services.  Additionally, loss of the industry in these communities also impacts the economic viability of the region as a whole because many other businesses thrive in part because of the industry.

The Final Economic Impact Analysis submitted by the Joint Industry Work Group supports key revisions to the Division’s proposed rule.

The proposed revisions would allow similar emission reductions to be achieved in a cost effective, achievable and reasonable manner that incentivizes good maintenance and repair to keep leak rates low.

We urge consideration of their proposed Leak Detection and Repair (LDAR) revisions, and believe their adoption will strengthen the final package of rules.

Intent to Regulate Methane Selectively in One Industry

CACI is also concerned that selectively regulating methane in just this industry, beyond Federal regulations, will put the oil-and-gas industry in our state at a competitive disadvantage as well as fail to significantly address the reduction of greenhouse gas emissions (GHG).

Currently, GHG regulatory advocacy groups nationally are urging the Federal Government to embrace market-based mechanisms for reducing GHG emissions from existing sources under CAA Section 111(d).

We fully anticipate that Federal regulation of greenhouse gases will be coming and likely in the near future.

Additionally, the AQCC study of Colorado’s GHG emissions has really just begun.  Significant resources, in both time and money, are being invested in learning more about the scope of such emissions in Colorado from our oil and gas producers and other larger sources of anthropogenic emissions.

With that study just getting underway, this proposal puts the cart before the horse.  Additionally, we refer to the Joint Industry Work Group Rebuttal Statement in concluding that imposing further regulatory GHG emission controls solely on the Colorado oil-and gas-sector will deliver little, if any, benefit either locally or globally.

We believe we can do better for our state’s first GHG effort.

‘Be the Change’ Response

We also would like to briefly respond to statements made by ‘Be the Change’ in its rebuttal statement, characterizing CACI’s participation in this rulemaking and questions raised in our Prehearing Statement as “immoral and unethical.”

The rules under consideration are dramatic in scope and the first of their kind in not just our state, but the country.  Indeed, the Division itself has called its proposal “historic.”

Methane is one of the most abundant naturally occurring organic compounds on earth, and it is produced by a wide variety of sources and human activities as well as natural biological processes.

Not only is it reasonable and ethical to inquire into the costs and benefits of the proposal being considered, it is a necessity to ensure that the regulations that result from this rulemaking measure up to the high expectations that have been expressed by many parties.

For the outcome here to meet the high bar that has been set by Governor Hickenlooper, this Commission must fully evaluate every facet of the proposed rules, which includes exploring the question of whether they will truly achieve the desired outcome, and that no other course is likely to yield better results.

Our belief is that the Commission has a duty to consider these reasonable concerns of CACI and its members, and your willingness to explore these questions is neither immoral nor unethical.


In conclusion, CACI and its members are supportive of thoughtful, well-supported rules to cost-effectively address air-quality concerns in our state, and we believe that many pieces of the proposed rules before you today meet those expectations.  The proposed rules appear very costly overall, however, and to be of questionable benefit outside the Non-Attainment Area.  Effective greenhouse gas regulation requires further study and comprehensive solutions in order to be effective, and we urge the Commission to carefully consider the adoption of numerous industry alternatives that are before you in order to improve the rules package overall.

For more information on the new rules and on the work of the CACI Energy and Environment Council, contact Carly West, CACI Governmental Affairs Representative, at 303.866.9622.

For more on this decision, read:

Oil and gas regulation fracturing relationships,” by Peter Marcus, The Colorado Statesman, February 28th.

Colorado communities push back as state leaders laud air rules,” by Bruce Finley, The Denver Post, February 25th.

What they’re saying about Colorado’s new air quality rules,” by Cathy Proctor, The Denver Business Journal, February 25th.

New Colorado air rules not expected to please everyone,” by Cathy Proctor, The Denver Business Journal, February 25th.

Colorado panel passes tighter air pollution rules for oil and gas operations,” by Cathy Proctor, The Denver Business Journal, February 23rd.

Colorado adopts tougher air rules for oil, gas industry,” by Bruce Finley, The Denver Post, February 23rd.

CACI’s “Chamber Day at the Capitol” Thursday Features Rally on Capitol’s West Steps

On Thursday, March 6th, CACI will hold its inaugural “Chamber Day at the Capitol” with local chambers of commerce to focus the attention of state legislators on important business issues facing the Colorado General Assembly this session.

CACI’s event will begin at 9 a.m. at the Capitol for local chamber members and participants in the CACI EXECs Advocacy Program.  About 40 local chambers of commerce are dues-paying members of CACI.

Loren Furman, CACI Senior Vice President, State and Federal, will begin the morning by providing an overview on how to effectively contact legislators and how testify at a committee hearing.  Loren will be joined by fellow business lobbyists Gayle Berry and Joan Green Turner, both of whom are former state legislators.  Other speakers will include:

  • Virginia Morrison Love, a contract lobbyist for Pinnacol Assurance, who will discuss workers’ compensation issues;
  • Joe Rice, Director of Government Affairs for CACI Silver Partners Lockheed Martin Space Systems Company, who will discuss bills and policies that affect the aerospace industry; and
  • Tisha Schuller, president of the Colorado Oil and Gas Association, who will discuss issues and legislation affecting the oil-and-gas industry.

There are only a few spots left for the morning session; click here if you would like to register and attend.

The CACI event will conclude with a rally, which will highlight the role of state public policy in creating a healthy state business climate, at 11:30 a.m. on the West Steps of the State Capitol.  CACI President Chuck Berry will address the rally, and he will be joined by several local chamber presidents.  CACI members are invited to attend the rally to show their support.

News Media Coverage

Below is recent news-media coverage of business, political, policy and governmental issues of interest to CACI:

Colorado Senate approves new paint recycling tax,” by Kristen Wyatt, The Associated Press, The Denver Post, February 28th.

Oil and gas regulation fracturing relationships,” by Peter Marcus, The Colorado Statesman, February 28th.

Priced out of health care reform,” by Katie Kerwin McCrimmon, Health News Colorado, The Denver Business Journal, February 28th.

More money for education means more fights,” by Peter Marcus, The Colorado Statesman, February 28th.

Colorado community colleges can grant 4-year career degrees under new law,” by Mark Harden, The Denver Business Journal, February 24th.

Caucuses signal start of 2014 election cycle,” by Ernest Luning, The Colorado Statesman, February 28th.

Colorado isn’t big on giving out subsidies,” by L. Wayne Hicks, The Denver Business Journal, February 28th.

With Rep. Cory Gardner exiting U.S. House, Republicans eye race,” by Lynn Bartels, The Denver Post, February 27th.

Colorado health exchange is headed toward tougher audit,” by Ed Sealover, The Denver Business Journal, February 27th.

Gardner-Udall matchup part of national GOP strategy,” by Kurtis lee and Lynn Bartels, The Denver Post, February 27th.

Judge upholds Broomfield election; fracking ban remains in effect,” by Megan Quinn, The Boulder Daily Camera, February 27th.

Colorado bill might reinstate eminent-domain power for oil and gas companies,” by Ed Sealover, The Denver Business Journal, February 27th.

Brain power boost in Colorado comes from out-of-state workers,” by Caitlin Hendee, The Denver Business Journal, February 27th.

Higher minimum wage endorsed at roundtable meeting in Denver,” by Steve Raabe, The Denver Post, February 26th.

Cory Gardner to challenge Mark Udall, Ken Buck to seek Gardener’s seat,” by Lynn Bartels and Kurtis Lee, The Denver Post, February 26th.

’Amazon tax’ Internet retailer proposal won’ tax, it turns out,” by Ed Sealover, The Denver Business Journal, February 26th.

The strange, winding debate around a bill to repeal Collect for Health Colorado,” by Ed Sealover, The Denver Business Journal, February 26th.

Audit: Colorado agencies sitting on $25.6 million beyond legal limits, by Joey Bunch, The Denver Post, February 25th.

Another anti-fracking measure could be headed to November ballot,” by John Aguilar, The Boulder Daily Camera, The Denver Post, February 25th.

Local officials seek more control over Colorado oil and gas operations,” by Cathy Proctor, The Denver Business Journal, February 25th.

Colorado initiative would allow local control of  fracking, oil and gas operations,” by Mark Harden, The Denver Business Journal, February 24th.

Colorado to be one of 7 hubs of national digital manufacturing institute,” by Ed Sealover, The Denver Business Journal, February 24th.

Federal Policy News

U.S. Supreme Court Hears Challenge to EPA’s Authority to Regulate Greenhouse Gas Emissions

Please see synopsis below by Linda Kelly, Senior Vice President and General Counsel for the National Association of Manufacturers (NAM), on the case heard by the U.S. Supreme Court on Monday regarding the U.S. Environmental Protection Agency’s (EPA) authority to issue greenhouse-gas rules for such stationary sources as power plants. The case is known as Utility Air Regulatory Group v. EPA.

At issue in this case that was explained further:

“The legal battle in part results from the failure of the administration and Congress to find common ground on the issue of global warming.

The court ruled in the 2007 case, Massachusetts v. EPA, that carbon dioxide and other greenhouse gases are pollutants that can be regulated under the Clean Air Act. That case, which was brought by states that said the EPA under President George W. Bush was not doing enough to fight global warming, concerned regulating motor vehicles.

The Obama administration later reasoned that “stationary sources” — factories, power plants and other structures — were also subject to the permitting requirements in certain parts of the act.”

A decision by the Supreme Court is not anticipated until this June.  NAM and the U.S. Chamber of Commerce are part of a group of private-industry petitioners in this case.  CACI is the Colorado affiliate for both NAM and the U.S. Chamber of Commerce.

For more information on the case, read:

Justice Kennedy skeptical of EPA’s powers,” by Laura Barron-Lopez, The Hill. February 24th.

Supreme Court seems divided in climate case,” by Mark Sherman, Associated Press, February 24th.

Supreme Court divided on whether EPA has overreached on greenhouse gas rules,” by Robert Barnes, The Washington Post, February 24th.


The National Association of Manufacturers (NAM) and other associations today argued against the Environmental Protection Agency’s (EPA) greenhouse gas regulations for stationary sources before the U.S. Supreme Court.

The Justices offered spirited questions to Peter Keisler of Sidley Austin LLP, the NAM’s appellate advocate on the case, with questions seeking to determine whether EPA could sweep greenhouse gas emissions into a regulatory program that has never included gases that are emitted in such volumes as to make EPA regulation, in its own word, “absurd.”  Keisler argued that EPA had to effectively rewrite several provisions of the Clean Air Act, a power the agency did not have.

The Justices raised questions about several issues in the case, including the fundamental definition of “any air pollutant” under the PSD (Prevention of Significant Deterioration) program at EPA. They probed for ways to resolve the conflict between statutory language that arguably both includes and excludes greenhouse gases from regulation under the PSD program.

The Court extended Keisler’s time for arguing the case to further explore the details of the NAM Coalition’s alternative approach that would allow regulation of greenhouse gases only for major emitters of other pollutants under the PSD program.

Also arguing against the EPA’s regulations was Jonathan Mitchell, solicitor general of Texas. Donald Verrilli, Jr., Solicitor General of the United States, argued in favor of the EPA’s approach.

We expect the court to issue an opinion in the case by late June.