(Colorado Newsline) A first-of-its-kind legislative attempt to fight climate change by phasing out oil and gas drilling in Colorado fizzled late Thursday night, failing to clear its first hurdle at the Capitol after nine hours of contentious testimony.

Lawmakers on the Senate Agriculture and Natural Resources Committee voted 5-2 to reject Senate Bill 24-159, with state Sen. Dylan Roberts, a Frisco Democrat and the committee’s chair, and Sen. Janice Marchman, a Democrat from Loveland, joining three Republicans in voting down the measure.

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“I acknowledge that climate change is a threat to our state,” Roberts said before the vote. “But this is not the right way to solve that problem, in my opinion.”

Lawmakers killed SB-159 even after adopting amendments put forward by the bill’s sponsors to drop its most controversial provision, a prohibition on new oil and gas permitting beginning in 2030, and make other drastic changes to sections concerning the cleanup of abandoned wells. Roberts faulted the bill sponsors for a “challenging process” involving what he said had been described to him in private conversations as a “messaging bill.”

The bill was bitterly opposed by the oil and gas industry and other business interests, lacked support from the state’s most influential conservation groups and likely would have been vetoed by Gov. Jared Polis if it reached his desk. But it was the latest and most significant effort to date by progressive environmental activists who have sought to force a reckoning between Colorado’s ambitious clean energy agenda and its booming fossil fuel industry.

Even as Colorado has undertaken wide-ranging efforts since 2019 to reduce planet-warming greenhouse gas emissions, statewide oil and gas production has remained near record-high levels. On average, Colorado drillers now pump more than five times as much oil out of the ground each month than they did just 15 years ago.

We get the pollution, and the oil and gas corporations get the profit.

– Sen. Sonya Jaquez Lewis, a sponsor of SB-159

As introduced, SB-159 would have begun to limit new drilling permits in 2028, phasing them out entirely within two years. It marked the first time the Legislature has formally considered so-called “supply-side” climate policy — measures that seek to accelerate the clean energy transition by constraining the supply of fossil fuels. In addition to aligning Colorado with global commitments to stop new fossil fuel production, proponents argued, a phaseout would benefit Colorado communities who suffer from air pollution related to fossil fuel extraction.

“We export 40% of our oil and 75% of our natural gas,” said state Sen. Sonya Jaquez Lewis, a Lafayette Democrat and one of the bill’s sponsors. “We get the pollution, and the oil and gas corporations get the profit.”

State falling short of targets

Scientists with the U.N.’s Intergovernmental Panel on Climate Change have warned that to avert the most catastrophic impacts of climate change, governments around the world must cut their greenhouse gas emissions in half by 2030 and achieve net-zero emissions by 2050.

Polis and other top Colorado Democrats, who have enacted targets roughly in line with the IPCC’s recommendation, have overwhelmingly favored policies that seek to reduce demand for fossil fuels by incentivizing clean energy alternatives like wind and solar power, electric vehicles and electric heat pumps. In a recent “roadmap” for state climate policy, Polis administration officials explained their opposition to supply restrictions, which they said would “harm lower-income residents and cause significant public concern.”

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“Fundamentally, our strategy to reduce greenhouse gas emissions is to make clean energy cheap, rather than making fossil fuels expensive,” state climate officials wrote.

That strategy has proven more effective in some sectors than others, and the state is likely to fall short of its first statutory greenhouse gas target next year.

In the oil and gas sector, the state’s decarbonization efforts have been limited to tackling “upstream” emissions, like pipeline leaks and pollution from trucks and drilling equipment engines, rather than the much greater amount of “downstream” emissions that occur when the industry’s products are combusted in a gas-powered vehicle, power plant or home furnace. In fact, in legislation passed last year, Colorado lawmakers explicitly barred regulators from considering downstream emissions — sometimes known as scope 3 emissions — in their efforts to mitigate the industry’s overall environmental impacts.

Kait Schwartz, the director of the American Petroleum Institute’s Colorado office, touted the industry’s progress in reducing upstream emissions in a statement that blasted state lawmakers for taking up “a suite of the most anti-oil-and-gas legislation in the history of Colorado.”

“We are pleased that the committee voted decisively on behalf of thousands of families across our state whose livelihoods were threatened by the mere introduction of Senate Bill 24-159,” Schwartz said.

Following a series of amendments late Thursday night, SB-159’s drilling phaseout was removed entirely, and the bill was reduced to a limited set of changes to the way the state holds oil and gas companies liable for abandoned wells. Schwartz said that even as amended, the legislation “posed substantial threats” to industry interests. Julie Murphy, director of the state’s Energy and Carbon Management Commission, which regulates oil and gas drilling, also told committee members that the agency favored defeating, not amending, the bill.

Impacts on school funding

Marchman called SB-159 “shortsighted and irresponsible” in its failure to grapple with the budgetary impacts of a drilling phaseout on local school districts and the state’s general fund.

The most significant effect would be a steep drop in the local property taxes paid by the owners of subsurface mineral rights, which a nonpartisan state analysis estimated at a shortfall of $546 million for school districts and local governments in fiscal year 2034, with the heaviest losses concentrated in oil and gas producing regions like Weld County.

“I’m not a shill for oil and gas,” Marchman said. “But I do recognize the scarcity with which we fund our schools, and the relatively large impact oil and gas has on our public education funds.”

But state Sen. Kevin Priola, an Adams County Democrat and sponsor of SB-159, faulted the bill’s fiscal note for what he said were flawed assumptions. Tax revenues in oil-rich counties already fluctuate wildly from year to year in response to volatile commodity prices, bill proponents noted, and those communities will face financial challenges one way or another as the energy transition accelerates and demand for oil collapses.

“There are less harmful ways to pursue a transition, and there are more harmful ways to produce a transition,” Jan Rose, a legislative analyst for the Colorado Coalition for a Livable Climate, told lawmakers. “One of the most harmful ways is to wait for climate change to force this industry out of business precipitously, because they can’t get funding, they can’t get insurance, they can’t get investors, they can’t get shareholders. At some point, there’s a tipping point, and it’s likely to happen, in our opinion, before 2030.”

And Mike Foote, a former Democratic state senator and attorney testifying on behalf of climate activist group 350 Colorado, said the industry’s plans to continue to drilling indefinitely — and the state’s lack of a plan to stop them — is “just not consistent with a livable planet.”

“You have in front of you a plan to do what is necessary for the state and the planet. As we’ve heard already, a lot of people don’t like that plan,” Foote said. “I haven’t heard what their plan is, other than continuing business as usual.”

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