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March 17, 2010 06:36 PM UTC

Natural Gas "Grand Bargain" Reaps Political Dividends

  • by: Colorado Pols

If you haven’t been paying attention to Colorado House Bill 1365, the product of a deal between the state and Xcel Energy to refit hundreds of megawatts of coal-fired electricity generation along the Front Range to Western Slope natural gas, you should–this is one of the biggest political game-changers that Colorado has seen in at least several years, and the full implications are still making themselves apparent. As the Durango Herald reports:

Rep. Ellen Roberts and Sen. Bruce Whitehead – rivals in the state’s hottest Senate race – will cooperate on an attempt to replace coal power plants with natural gas.

It promises to be one of the biggest bills of the year.

Coal miners hate it, but many other interests love it, including the state’s largest utility, the natural-gas industry, environmentalists and most of the Legislature’s Republicans and Democrats.

The bill also marks the first tangible result of a new strategy by the natural-gas industry.

Instead of fighting environmentalists, companies are using clean-air laws to open the lucrative electricity market to natural gas.

Gov. Bill Ritter called House Bill 13[65] “a very big deal.” His biggest critic, Senate Minority Leader Josh Penry, said it could be a “game-changer” for the natural-gas industry…

Environmentalists were jubilant.

“This is one of the most important and consequential pieces of legislation that we’ve had the pleasure of working on,” said Pam Kiely of Environment Colorado. “We have in Colorado really stepped out on a limb. We are talking about fundamentally changing how we power our future.”

It really is that big, folks. Politically, this plan yields benefits for everyone involved: after over a year of endless (and bogus) protestations that the new rules governing oil and gas drilling were ‘killing the industry,’ a large new market for locally-produced natural gas will be created, substantially taking a whole set of electioneering claims off the table. There’s an argument to be made that Democratic gubernatorial candidate John Hickenlooper was already in the process of doing just that; but now the job is easier, and the energy industry has even less incentive to wage war. It’s a huge face-saving legacy builder for Josh Penry, too, as he figures out what to do with himself when his Senate term ends.

The Herald goes on to report that this agreement between the state and Xcel was a year in the making. Bringing opposing parties together on this kind of scale is something we can only remember happening once or twice in recent years, and word is that some of Colorado’s foremost political powerbrokers, like Hogan & Hartson’s Ted Trimpa, were instrumental in moving this from discussion to the cutting of a deal.

So–we’re well and truly done now with the “Colorado is at rock bottom” nonsense, right?


10 thoughts on “Natural Gas “Grand Bargain” Reaps Political Dividends

  1. The question now becomes how much more will those of us who are not power plants and pipelines to the midwest going to have to pay?  We already are paying for the pipeline to ship local gas away from Colorado. We are already being forced to compete against large companies.  

    With the power plants of a commercial enterprise now competeing against citizens we will once again see the battle shifted against us.  I suppose we will have to fight city councils to be allowed to use cheap “clean” coal to heat our homes and cook our meals.

    1. It’s more accurately described as

      “cheap” “clean” coal, since it’s neither.

      And on the natural gas price front, we already “compete” with people in Ohio, Pennsylvania, etc for the “right” to keep some of our gas here in Colorado. Only one-third of the gas produced in Colorado is sold to entities who will use the gas in Colorado. Since people and industry in the northeast US are willing to pay more for gas, we must compete against that to keep gas here.

    1. Gee this was a non-issue as he was using it.

      My Fear is Unlike Public Service of Colorado, Xcel will use the use of N.gas in electric plants to raise rates for Gas AND electricity even further.

      Bet on it.

  2. but I must object to Joes’ clear misfire on this quote, “Environmentalists were jubilant”. That would be “some environmentalists”, to be more correct. Joe appartently failed to contact many Western slope advocacy groups who were surprised by this Bill, having had no part in its creation. That story will find its’ way here soon enough.

    Here is the condensed version. Dirty Denver air. Why? Coal burning. Solution. Burn less coal, more natural gas. Is natural gas cleaner?  Only where you burn it, not where you produce it.  Where do you produce it?  Places other than Denver.  Where are the impacts?  Places other than Denver.  What are the impacts?  Well, among others, dirty water and …wait for it…dirty air.  Oh, I get it.

    Many western slope people want to know a lot more about this bill before they support it. I am one of them.

  3. This is almost comical.  Clean air for downwind areas?  Sure.  But just wait a few years for the extreme price volatility in natural gas that all of us in the energy risk industry know is coming.  Then you will hear the same people saying “was coal really that bad?”  Not that I like coal — very far from it.  But thinking that an across-the-board fuel switch to an unstable commodity is a solution to … well, anything … is so f’ing shortsighted it makes me wonder who is advising the legislature on these issues.  

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