When Governor Jared Polis signed Senate Bill 19-181 into law on Monday, April 15 Mark Sexton, owner of Evergreen Natural Resources was on hand for the signing. SB- 19-181 could impose restrictions on Colorado’s energy industry policy, with a much greater emphasis on environmental issues.
Sexton made a statement at a Trinidad business on Wednesday, April 16 and also answered a few questions on the potential impacts of the new legislation on the state’s energy industry, which generates large revenues in the form of state severance taxes on energy produced in Colorado.
“He invited me to the bill signing,” Sexton said. “He also invited some other people from the industry and a few of us showed up. There were three or four energy companies represented, along with some environmental groups and anti-development groups. It was a fairly crowded signing ceremony.
“The governor said all the right things, and when you listen to what he said about us, saying the Colorado oil and gas wars are over in terms of referendums, ballot initiatives, legislation, he said this was designed to put an end to it, to create a stable environment to encourage capital to come into Colorado for oil and gas development. He complimented the companies that were there.
“One of the companies that’s active in the Broomfield area had the mayor of Broomfield there, complimenting that company’s extraction of resources. The governor’s position is that while this was a contentious fight, that now that it’s over it was designed to create a stable environment that people know what the rues are, and to encourage orderly development but to give communities more of a say.
The bill keeps talking about health and safety, and that is surprising to those of us who operate in the gas and oil business, because we always operate with health and safety first. We always operate with safety first, and the health of our employees and the landowners and the contractors we deal with is always of paramount importance to all of us.
“The bill says put health and safety first, which is not hard for oil and gas companies who care about their employees. Evergreen Natural Resources considers its employees one of its primary assets, along with the wells and pipelines and gathering systems, and all the infrastructure that has been developed.
“People tend to think of that as the company’s assets and we do too, but we also regard our employees as our real primary asset. We encourage good attitudes, good work ethics, and that’s not hard to do here because this workforce already has those values and is already motivated to do the right job and to do things right.”
Sexton was asked how the new legislation would impact Evergreen’s ability to move forward and get more drilling done and with the landowners and the environment surrounding the company’s wells.
“As long as we’re able to get permits we’ll probably be okay,” he said. “The question that comes up is, during the rulemaking process will permits be granted? The governor has verbally assured us that we would be able to get permits during the rulemaking process and that permits will not be held up during this period. It’s going to take months, maybe even a couple of years. The industry’s primary concern was being shut down during this period. It’s one thing to say that the bill has passed and now it’s the implementation of the law. How do we that and how do we do that in a way that works for everyone. One size does not fit all in the oil and gas industry.
“The concerns that people have in the communities north of Denver are very different than the issues facing us here in Las Animas County, where all the operations are really going on in the canyons west of Trinidad here. We have great relationships with all of the landowners. I wish it could be 100-percent, but you can never get 100-percent of the people to agree on anything. That doesn’t mean we won’t try and we do try, and we will continue to try.
“One of the assets we also value is the great relations we do have with the vast majority of landowners, and we want to keep it that way. As long as the new law does not hold up the permitting process and development at the state level, I am confident that our elected representatives and our leaders here in Las Animas County want to see a positive business environment and want to see development go forward.
“We produce from 2,200 wells. Our goal in reacquiring this asset is that we understood it. We do understand it. We’re very proud of our operation. We created it in the first place. Pioneer Natural Resources expanded on it in a highly professional way. This is one of the cleanest oil and gas properties you’ll find anywhere, and we’re very proud of it.
“Our goal, however, is to not drill new wells at this time. Our goal right now, especially during this rulemaking process, is to re-complete existing wells, and to re-work and re-complete those wells, to re-fracture, to re-stimulate those wells and get additional production from existing wells on existing well-pads. So we’re basically working with what we have now. As long as we’re allowed to do that we’ll be successful. Our main fear was that we couldn’t even get permits for that.
However, the governor assures that was not the intention of SB 19-181. In his remarks yesterday he indicated that he wanted capital formation to come in to Colorado for the oil and gas industry. That’s why he wanted a number of industry representatives there. It’s no secret that every oil and gas company in the state opposed this bill. However, now that it’s signed into law we have all agreed to give a best-faith effort to work with it, with the spirit and the letter of it.
“However, we don’t understand some of the provisions, and that will be explained more and determined in the rulemaking. So as long as we can go forward, as long as we can get permits, the impact to us should be much less than almost every other county in Colorado.
“We have the governor’s verbal assurance. I believe him and I won’t hesitate to remind him if we need some help. But I believe his intentions are good and I want to believe that we can all work together. We’re certainly going to give it our best-faith effort.
“The people in the oil and gas industry are just like everyone else. They’re your friends and neighbors. They want to provide for their families. They want to be active and positive members of the community. Everybody in the energy industry in Colorado has Colorado values. We all want clean air and clean water, and a safe working environment. We want to see our industry creating opportunities for others. We want to see our schools well funded. We want to have good-paying jobs that people can use to support their families. In this bill, in this new law is already part of our values, so it’s not going to change the way we operate. What we hope is that additional requirements don’t substantially delay our ability to get things done prudently. That was the industry’s big concern, because in some cities and counties in Colorado the people made it clear that that’s exactly what they did want to do.”