In a pivotal announcement on Monday, Colorado Governor Jared Polis revealed a groundbreaking agreement between the oil and gas industry and environmental groups, aiming to quell the rising tensions and the looming threat of multiple ballot measures and legislative proposals concerning fossil fuel production. This new deal not only promises to transform drilling into a significant funding source for public transit but also marks a significant shift in the state’s approach to environmental and industrial regulation.
The announcement, made at the state Capitol alongside Democratic legislative leaders, outlined a strategic pivot from previously proposed air quality legislation aimed at reducing ozone levels and curbing industrial air pollution. Instead, the focus will now shift to enacting a new pair of bills. These will solidify existing agency rules designed to cut smog-forming compounds from drilling operations into state law and introduce a novel fee on oil and gas production.
This newly forged accord effectively cancels the brewing storm of a ballot war, previously anticipated to pit environmental groups against the oil and gas sector. Governor Polis emphasized the mutual agreement to withdraw a range of competing measures slated for the November elections, which had threatened to bombard voters with a bewildering array of policy choices concerning gas stoves and pollution enforcement tactics.
Governor Polis highlighted the collective acknowledgment that the costly and divisive ballot measures and legislation were not in the best interests of Colorado. He praised the spirit of cooperation that led to a compromise, stating, “In coming together, this diverse group agreed it’s better to find a way to work together toward an outcome everyone can live with.”
State Senator Steve Fenberg of Boulder detailed the financial aspects of the new fee, which is projected to generate an average of $138 million annually. He outlined the allocation of these funds, with eighty percent earmarked for enhancing public transit infrastructure across the state, including the potential development of a Front Range rail line. The remaining twenty percent is designated to support parks and wildlife conservation efforts.
This agreement is not unprecedented in Colorado’s political landscape, which has seen similar pacts in the past aimed at staving off expensive and contentious ballot fights over oil and gas development. Notable among these was the 2014 compromise brokered by then-Governor John Hickenlooper and then-Congressman Polis, as well as a 2020 agreement that paused ballot initiatives while the state implemented significant legislative overhauls of its oil and gas regulations.
The necessity for this agreement became apparent following the introduction of a trio of bills by statehouse Democrats in February, which aimed to align the state with federal ozone standards. These proposals were primarily focused on reducing smog-forming pollutants emitted by the oil and gas industry, identified as a major contributor to the Front Range’s summertime air quality issues. The proposed measures included granting more extensive powers to state air regulators, mandating specific reductions in pollution, and implementing stricter penalties for repeated violations of air quality regulations.
Ozone pollution remains a stubborn and significant environmental challenge across Colorado’s densely populated urban areas. The U.S. Environmental Protection Agency recently reclassified the metro Denver area as a “severe” violator of federal smog standards, underscoring the urgency of meeting air quality benchmarks.
In response to these environmental challenges, the oil and gas industry had prepared a series of ballot initiatives, including proposals to restrict regulations on gas appliances and alter the composition of the state air pollution commission. A coalition of environmental groups countered with their own initiatives, setting the stage for a potentially divisive and complex electoral showdown.
Kelly Nordini, CEO of Conservation Colorado, praised the agreement as a preferable alternative to a contentious ballot fight, emphasizing the benefits of progress on cleaner air, enhanced transit options, and land protection. The environmental coalition includes prominent organizations such as Earthjustice, GreenLatinos, Southwest Energy Efficiency Project, the Sierra Club, Earthworks, Healthy Air and Water Colorado, CoPIRG, and Western Resource Advocates.
Kait Schwartz, director of the American Petroleum Institute Colorado, welcomed the agreement, noting that it restored regulatory certainty for the state’s oil and gas industry and aligned with Colorado’s ambitious climate targets.
The Regional Transportation District (RTD) of Denver, which had previously contemplated seeking voter approval for additional funding to complete its FasTracks rail expansion plan, found a new ally in the state government. Despite RTD’s reticence to approach voters after a series of unsuccessful funding campaigns, the state’s intervention through this new agreement marked a significant commitment to public transit, potentially transforming the availability and frequency of local transportation services.
Molly McKinley, policy director for the Denver Streets Partnership, hailed the agreement as a monumental step forward, although she noted that it fell short of the funding levels required to double service in the Denver area. However, she remained optimistic about the positive impact on the state’s broader transportation and environmental goals.
State Senator Fenberg underscored the historic nature of these investments in transit, suggesting that they represented transformative support for public transportation not just in Denver, but across the entire state. Ann Rajewski, executive director of the Colorado Association of Transit Agencies, echoed this sentiment, celebrating the state’s substantial commitment
