American Oil and Gas Reporter - June 2014 - 146

ConventionSection: Western Energy Alliance

Industry Allies Fight Fracturing Bans
DENVER-In the span of several
months, an organization supported by
Colorado's largest oil and gas producers
and created by the Western Energy Alliance seems to have become an indispensable voice in the state for rational
discussion of hydraulic fracturing.
According to the Alliance, Coloradans
for Responsible Energy Development has
earned recognition from Denver to Washington with a durable, multimedia advertising campaign and a matter-of-fact approach to energy development.
From the beginning, the campaign has
emphasized the word "fracking," even to
the point of adopting the spelling that is
used by industry opponents and the nonindustry media. The "f-word" is used repeatedly throughout CRED's ads in an
effort to desensitize the audience and
"take away its magic," acknowledges Alliance President Tim Wigley.
"Our polling data show clearly that
the opposition has been successful in
making people-especially women in their
20s and 30s-react negatively whenever
they hear it," Wigley reports. "We had to
break through that reaction if we were
going to reach those women."
After securing support from several
companies operating in Colorado to form
a business information nonprofit group,
Wigley says, the Alliance contracted
PACWest Communications of Portland,
Or., to develop CRED and build its coterie
of consultants. The effort quickly yielded
results.
Television and radio advertisements
soon were running across the state during
Denver Bronco football games and then
rolled over to hockey, basketball and
baseball broadcasts as the seasons changed.
Broadsheet inserts in the Sunday editions
of several newspapers provide more depth
in telling the story of oil and gas development and its benefits. Highway billboards echo the questions raised in the
television and radio spots, posing "How
long have they been fracking?" and "Does
fracking get anywhere near our drinking
water?"
Citizens are urged to seek answers
with a visit to the campaign's educational
website at "studyfracking.com." Meanwhile, on social media, CRED's Twitter
feed and Facebook posts urge readers to
"get the facts on fracking" and include
referrals to positive news stories.

"We have gotten tremendous feedback
on the ads," Wigley reports. "Our latest
polling data show that when people learn
how regulations, best practices and technology protect the environment, they are
more likely to support energy development."
Educational Organization
The Alliance says CRED is organized
as a 501(c)6 nonprofit organization. Under
the federal tax code, such entities are
business-oriented groups that can support
political issue campaigns, but are generally
more involved in education and promotion.
The U.S. Chamber of Commerce is an
example of a national organization operating as a 501(c)6 business league.
In addition to its advertising campaign,
CRED has added its voice to those of
other Colorado business and civic organizations that are pointing out how a hydraulic fracturing ban will damage the
state's economy. They cite a 2014 study
conducted by the University of Colorado's
Leeds School of Business that was cosponsored by the Metro Denver Economic
Development Corp., the Denver South
Economic Development Corp. and the
Commonsense Policy Roundtable. That
analysis shows that a statewide fracturing
ban would cause Colorado to lose:
* 93,000 jobs;
* $12 billion in gross domestic product; and
* $985 million in annual tax revenue
for local and state governments between
2015 and 2040.
Although discussions near the end of
the 2014 Colorado General Assembly
sought a compromise to allow some local
government input on matters such as setbacks, noise and other development issues,
the Alliance notes, no agreement was
reached. Additional meetings were held
after the session and Governor John Hickenlooper mentioned the possibility of a
special session to attempt a compromise,
but nothing of the sort had surfaced by
mid-May. Without legislation to address
controversies around local control and
locally imposed bans on fracturing, the
association says it expects more ballot
initiatives.
Local Control
The 15 proposed ballot initiatives and
their potential outcomes were reviewed

146 THE AMERICAN OIL & GAS REPORTER

at a seminar in May co-hosted by CRED
and the Denver office of Hogan Lovells.
According to Chantell Taylor, one of the
law firm's attorneys, if the proposed initiatives can navigate court challenges,
secure a sufficient number of signatures
and pass at the ballot box, they will
expand local governments' ability to regulate oil and gas development and operations by draining authority from the
general assembly, the Colorado Oil &
Gas Conservation Commission, and other
state agencies.
Even so, such an eventuality is by no
means assured. "There are still many
hurdles the proponents of these initiatives
have to overcome before getting on the
ballot," Taylor says.
The Alliance notes that the oil and
gas industry struck out in five local ballot
initiatives last fall. This year, industry
allies say they are leaving little to chance
and are forming a number of business
coalitions and raising millions of dollars
to oppose potential fracturing bans. "After
the last election, we heard from people
outside the state about how we went 0for-5 at the ballot box," Wigley relates.
"CRED is one of several programs we
intend to use to improve that batting average."
According to published reports, one
of those programs is from a group called
Vital for Colorado. It counts among its
members dozens of regional government
groups, as well as business, agriculture
and outdoor organizations. In March,
Vital for Colorado bought full-page advertisements in newspapers across the
state. They ran under the heading "Energy
Chaos in Colorado," and raised a number
of concerns about local control initiatives.
The coalition also obtained the signatures
of 150 state and local government officials
opposed to such local control efforts.
Protecting Colorado's Environment,
Economy and Energy Independence is
another recently formed group. It is a
political issue committee that, according
to a report filed May 5 with the secretary
of state, has raised $2.1 million. The
report showed contributions to Protecting
Colorado from Calfrac Well Services
Ltd., Pioneer Natural Resources Co., SM
Energy Co., PDC Energy Inc., Anadarko
Petroleum Corp., Noble Energy Inc. and
Whiting Petroleum Corp.
In early May, another Colorado busi-

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