Oil and Gas Industry Comes Out In Full Force Against CHC on Economic Report

Three CHC representatives attended the Board of County Commissioners meeting Monday in Delta. In an unusually packed room, Associate Program Director Andrew Forkes-Gudmundson made a 15-minute presentation to the Commissioners summarizing CHC’s new economic study, Economic Impact of Natural Gas Development on Delta County.  He indicated on several occasions that this study is a first step to understanding the costs and benefits of oil and gas development to the North Fork Valley and to the County, and concluded by requesting that the County and other organizations build on this initial report by:

  • commissioning an independent study on the economic impacts of outdoor recreational activities such as biking, hiking, cross-country skiing, etc.
  • commissioning an independent study on the impact of oil and gas development on commercial property and vacant land
  • conducting a cost-benefit analysis prior to supporting any oil and gas development projects and making a cost-benefit analyses available to the public

 

The Commissioners invited Bruce Bertram (part-time Delta County oil and gas liaison) and Debbie Griffith (County Assessor) to respond.  Bruce criticized CHC for not referencing existing oil and gas operations, including 60 wells that have been drilled so far in the County (note: there are only 4 active wells), that occurred during the time when CHC reported that the North Fork Valley economy has been growing. He also criticized CHC for utilizing the national park visitation decline study as a proxy for estimating impact to tourism, and suggested that CHC utilize research on the local sites. The research that he suggests does not exist. If it did, we would have used it. Lastly, Bruce criticized CHC for not accounting for the impact on private property mineral rights. Private property rights of mineral rights owners, adjacent property owners and water rights owners are issues that need to be addressed but were beyond the scope of the report. Bruce concluded by asking for a follow up to the study, which reinforced our request for the same to the County Commissioners.

Debbie pointed out that the CHC report only addressed production value, and did not include revenue from pipeline and compressor station construction. She did not reference specific facilities from the NFMMDP located within Delta County that could generate more revenue.

David Ludlum, representing the Western Slope Colorado Oil and Gas Association, and Eric Sanford, representing SG Interests, as well as a resident from Olathe, all non-Delta County residents, were given time during Constituent Time to respond to CHC’s report. David Ludlum sent the BoCC a letter last Friday responding to our report, and came from Grand Junction (with an assistant to make a video of his presentation) to make some of his points in person. He disparaged CHC throughout his comments, referring to CHC as “The Activists” and stating that our “so-called” report was false, misleading, and self-serving. In particular, Ludlum criticized CHC for not including in its benefits calculation a number of conservation funds and projects, low-income energy assistance funds, and school board budget, which he claims are funded, at least in part, by oil and gas royalty revenues. His letter focuses on state redistribution of severance and federal mineral lease royalties, but doesn’t differentiate the specific revenues that the NFMMDP could generate within this context. He obfuscates the issue of developing a public and transparent cost- benefit analysis by conflating our findings. Despite making a number of broad claims, no citations were provided in the letter to verify the assumptions. Click here to read the entire letter. We will be reviewing and fact-checking the letter in order to respond appropriately.

Eric Sanford (from SG Interests) said they have been drilling in the watershed for years with no economic repercussions to the County and mentioned a new unit west of the proposed North Fork Mancos Master Development Plan, called the Oil Well Mountain Unit and said that they will be seeking approval soon for a new project in Delta County.

A resident from Olathe tried to ask about where funding for CHC came from, and suggested the BoCC should “follow the money” to see who is behind CHC. Robbie LeValley and Commissioner Atchely explained that Constituent time was not an opportunity for questions to the audience.

Gunnison Energy, whose project was the subject of the report, did not have any representatives present.

Our report, and the prospect of careful economic analysis of proposed oil and gas development, has clearly attracted the attention of the industry and the County. Instead of engaging in a civil public discussion, and providing constructive criticism, the industry resorted to an approach of attacks and denigration.

The purpose of our report was not only to inform the community, but to inform the decision-making process. Most importantly, the purpose was to engage the County in a cost-benefit analysis on oil and gas development projects, which to our knowledge has not been undertaken by the County as a part of any of their decision-making processes related to oil and gas development. Mr. Ludlum’s letter contributes nothing constructive to the conversation, and does nothing to advance the development of a cost-benefit analysis on the NFMMDP. Instead, his comments and letter are more arm-waving and don’t tangibly relate to Delta County. Its intent appears to be to discredit this critical decision-making tool and shut-down any further investigation into the claim that the economics of oil and gas development make sense for our region. We hope that the BoCC will follow up on our recommendations to build on this report, and publicly debate the pros and cons of oil and gas development with transparency.

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