Gov. Ritter asks DeGette to modify hydraulic fracturing bill

Colorado Gov. Bill Ritter Jr. said in a Denver address that he asked US Rep. Diana DeGette (D-Colo.) to seek a comprehensive study of hydraulic fracturing “instead of jumping directly to a new and potential intrusive regulatory program.”

He disclosed the request during a July 9 speech to the Colorado Natural Gas Association’s Rocky Mountain Strategy Conference. DeGette and Reps. Maurice D. Hinchey (D-NY) and Jared Polis (D-Colo.) introduced a bill on June 9 which would require federal regulation of hydraulic fracturing under the Safe Drinking Water Act. US Sen. Robert P. Casey Jr. (D-Pa.) introduced a similar bill the same day.

Ritter said that Colorado’s new oil and gas regulations are an example of how states can regulate hydraulic fracturing, which is essential to gas development in the state. “I appreciate the American Petroleum Institute and the Colorado Oil & Gas Association for recognizing how Colorado has responsibly addressed this issue with its new rules and regulations,” he said.

“I don’t for a moment discount the concerns of those who worry about protection of drinking water supplies. But I also believe that we have to understand the problem and the risks before we act,” Ritter continued. “That’s why I’ve encouraged Congresswoman DeGette to consider authorizing a comprehensive study of this issue.”

“She had a very good conversation with the governor on this matter. She is looking at all options and agrees that a study is needed. But she is not backing off her bill,” a spokesman for DeGette told OGJ Washington Pulse on June 9 when asked for a response.

Retain IDC exemption

Ritter also said that he has urged Congress to keep the tax exemption for intangible drilling costs intact to preserve a robust investment climate. “As [former Western Gas Resources Inc. Chairman Peter A. Dea] has so often and so eloquently explained, in many fields the decline rate for gas wells means we have to maintain a constant level of new development. We cannot afford to stand still,” the governor said.

Noting that he considers it an essential and permanent part of what he calls the New Energy Economy, Ritter said that gas is “not a bridge fuel, not a transition fuel, but a mission-critical fuel.”

He said that 2009 obviously has been a challenging year for producers, with gas selling for about half its price a year ago and the number of wells being drilled down by about 50%.

“The meltdown of credit markets has hurt you as much as everyone else, and it will be a while before things get better. So it’s more important than ever for us to work together, to realize the full promise of gas, to expand pipeline capacity, to increase gas as both a transportation fuel and as a baseload energy fuel,” Ritter told the group.

He said that he supports expedited Federal Energy Regulatory Commission certification of the Ruby Pipeline Project from southwestern Wyoming across northern Utah and Nevada to southern Oregon. “I’m doing everything I can to help facilitate the construction of pipeline infrastructure so that we can move Colorado gas to lucrative regional markets, such as California and the West Coast,” he said.

Natural gas vehicles

Ritter said that he also has been working to increase the number of vehicles on Colorado streets and highways running on compressed natural gas. “A couple of months ago I sighed legislation that expands tax credits to include both CNG vehicles and CNG vehicle conversions,” he said.

“And there is new federal legislation that would increase and extend tax incentives to promote the development of natural gas as a transportation fuel. I strongly support that bipartisan bill,” he continued, referring to S. 1408 which US Senate Majority Leader Harry M. Reid (D-Nev.) and Sens. Orrin G. Hatch (R-Utah) and Robert Menendez introduced on July 8.

Ritter also noted that his energy office has applied to the US Department of Energy for a $10 million grant to dramatically expand compressed natural gas’s use as a transportation fuel. The application was submitted in association with Clean Energy, which supplies CNG for transportation, and the Southern and Northern Colorado Clean Cities Coalitions.

The money would be used to help fund a $27.6 million project to deploy 68 heavy-duty natural gas vehicles including waste disposal trucks and transit buses, and to construct five new CNG refueling stations across Colorado, Ritter said as he announced the action on July 7. Project partners would pick up the remaining cost, he indicated.

Contact Nick Snow at nicks@pennwell.com

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