Gas, oil tax bill is put aside

Issue to be addressed after Nov. election

DENVER – Officially, the latest effort to revise Colorado’s gas and oil taxes lasted 16 minutes.

But legislators, Gov. John Hickenlooper’s advisers and energy industry leaders say they will take a hard look at taxes after the November election.

Sen. Gail Schwartz, D-Snowmass Village, introduced a bill to study Colorado’s taxes on gas and oil, which are the lowest of the surrounding states. But she killed her own bill Wednesday at its first hearing, a mere 16-minute affair.

Schwartz led the last group to look at severance taxes, in the midst of the Western Slope gas boom in 2007.

“A lot has changed in the last seven years,” Schwartz said.

Much of the industry has stopped drilling for gas on the Western Slope and switched to oil on the Front Range. Environmental rules now are in place that did not exist in 2007.

States levy severance taxes on companies that extract nonrenewable resources, such as gas, oil and coal. Schwartz and other legislators are concerned that Colorado’s long energy boom has left the state with little in return. Compared with nearby energy states such as Wyoming, New Mexico and Montana, taxes on the industry here are low.

“We need to provide some value to the state long term,” Schwartz said in an interview.

Colorado uses its severance taxes to pay for water projects and to help local communities deal with the industry’s impacts, such as road damage from heavy truck traffic.

Schwartz held a meeting a few days ago with people from the industry and the governor’s office, and they all decided to have Hickenlooper create a task force instead of running Schwartz’s bill through the Legislature.

Bob Randall spoke for the Hickenlooper administration at Wednesday’s hearing and pledged that the governor would convene a group to look at severance taxes.

“These are clearly issues that need to be discussed and deserve to be discussed,” said Randall, deputy director of the Department of Natural Resources.

Hickenlooper himself once flirted with the idea of raising severance taxes. A week before he was elected in 2010, he told a Durango Herald reporter that he was interested in asking the gas and oil industry to cooperate in raising their taxes in order to fund college scholarships. However, the industry pushed back against the plan, and Hickenlooper never formally proposed it.