We hate to say we told you so, but we told you so. A Reuters article from earlier today showed exactly what the oil and gas industry claimed would happen if the Colorado legislature (or Proposition 112) passed irrational regulations. Colorado passed them and investment is down. From the article:
“The resulting uncertainty over how local authorities will use their newfound power has nearly halted energy deal activity, including acreage purchases. There were only five land transactions of negligible value in the Denver-Julesburg Basin in the nine months ended Mar. 31, down from nine deals worth $2 billion in the same period of 2016-17, according to consultancy Drillinginfo.”
Truthfully, according to this article, the flight started at the end of last year after a swath of radical Bernie-loving Representatives and Senators were elected. Here’s another proof point that the oil and gas boom is about to grind to a halt here in Colorado from the article:
“ConocoPhillips tried to sell its Colorado acreage for more than $1 billion late last year but failed to find a buyer, according to three sources familiar with the deal.”
It’s unbelievable that they failed to find a buyer. With the amount of tech available to ConocoPhillips, it’s safe to say that the acreage the company was trying to sell wasn’t unproven or highly-speculative, it was the political environment that led to folks sidelining investment.
Throughout 112 and during the legislative session, the industry repeatedly told legislators and the public that this would lead to a sluggish economy. The response from legislators was laughable – they simply denied basic economics or called the industry hysterical.
Will Democrats in the legislature who sought to destroy the oil and gas industry, finally admit that over-regulation leads to declining investments? Will the local media hold them accountable? Will the local media even report on this huge economic trend?