Coloradans pointed to international leadership in energy production and climate change as a key aspect of U.S. foreign policy that causes conflict within the state and impacts the economic well-being of the middle class. For some Coloradans, leadership in energy means protecting the revenue and good-paying jobs that flow from the state’s thriving fossil fuel industries and exporting more liquefied natural gas (LNG). For many others, it means protecting the environment and the outdoor recreation industries on which the state’s economy depends and creating more jobs in renewable energy sectors. The heated debate on energy and climate change taking place across the nation is playing out in a major way within Colorado, often pitting conservative rural counties against more liberal urban areas.
Colorado’s Fossil Fuel Industries Support Middle-Class Jobs and Communities
Colorado is a major energy-producing state, where its thriving fossil fuel industries create high-paying jobs for those without a college degree. Several parts of the state are heavily reliant on the revenues and economic activity that the extractive industries generate. For those reasons, a number of people interviewed stressed the importance of increasing exports of LNG and attracting more foreign direct investment to grow Colorado’s extractive industries.
Colorado Is a Major Energy-Producing State
In 2017 (the most recent year for reported rankings consistent across sectors), Colorado ranked sixth in the nation in natural gas production, seventh in crude oil, and tenth in coal.1 Due to technological innovation, Colorado’s oil production has grown exponentially over the past decade, far surpassing the previous peak level in 1956 (see Figure 11).
Though not nearly at the same pace, natural gas production in Colorado has also grown significantly—over 100 percent from 2000 to 2018.2 Coal production has fallen by more than 60 percent since 2005, though it still accounts for approximately half of electricity generation in the state.3
While only five counties recorded coal production in 2018 (Gunnison, Moffat, La Plata, Rio Blanco, and Routt), dozens of counties across Colorado have oil and gas wells and basins (see Figure 12).4
Fossil Fuel Industries Generate Middle-Class Jobs for High School Graduates
Many top oil-producing companies are Colorado-based and create well-paying employment opportunities.5 Coloradans without a college degree can earn around $65,000 a year in the oil, gas, and coal industries. Many go on to earn considerably more; the average value of salary and benefits for coal workers topped six figures in 2018.6 Few, if any, other industries offer that kind of compensation and opportunity for recent high school graduates.7 In fact, some focus group participants stated that young workers in the industry constitute the wealthier group in certain regions. A longtime resident of Greeley (Weld County) recalled, “I was picking up some parts and there was a beautiful Toyota-type pickup [truck]. I asked the price of the vehicle. $60,000. I said who buys that? The young single guys in the oil field. The average person would be crazy to spend that kind of money.”8
A longtime resident and journalist in the fossil fuel rich region of Grand Junction saw the high-paying jobs in these industries as a mixed blessing for his region. “The rate at which we send our graduates to any form of higher education—Toyota degree or 4-year degree—is 20 percent below the national average and it’s gotten lower. One explanation is that during boom time, you could come out as an eighteen-year-old and make $80,000 in an extraction industry. And if the mindset in the household is ‘my dad made $80,000 in the oil patch—why do I need to go to college; I will do the same,’ that works until there is a bust and that kid doesn’t have any real prospects.”9
The total number of fossil fuel industry employees is relatively small. In 2017, there were approximately 30,000 directly employed in the oil and natural gas industries and 1,200 in the coal industry. But these workers represent only a fraction of the people dependent on the industries to sustain a middle-class lifestyle.10 Focus group participants in the Weld and Mesa counties explained that many businesses in their region are associated with, and dependent on, extractive industries, including truckers who move the products and local firms that supply parts for the machinery. “We have a lot of manufacturers here in town. But a lot of that is based on the oil and gas production. . . . Grand Junction in our environment here can’t survive on tourism alone. It genuinely can’t—all of the hospitals, all of the medical, are paid for by the manufacturing, by oil and gas.”11
Focus group participants also explained that various counties depend heavily on severance taxes from extractive industries to deliver local services and pay municipal workers, county clerks, police officers, and local firefighters—all of whom are considered the backbone of the middle class. One participant said, “we’re looking at tax increases because we don’t have that tax revenue from oil and gas. If we can get that gas exported, the price will come up and that would help La Plata County.”12 Oil and gas development on public land also generates income for the state.13 And oil and gas companies appear to be aware of their importance to communities and their members’ livelihoods. One former state official believed oil and gas companies were even thinking “tax me so you can be addicted to our business.”14
Nowhere is the importance of extractive industries to the middle class more evident than in Weld County, one of the leading oil producers in the country, where extraction takes place on state-owned land (unlike on the Western Slope, where extraction occurs on federal land). In 2018, 89 percent of the oil and 43 percent of the coalbed and natural gas produced in Colorado came from Weld.15 More than half of all property taxes in the county are collected from extractive industries.16 That revenue pays for workers and services across the county. And many farm owners rely on the royalties paid by the oil companies that extract oil and gas from their land.17
Communities Dependent on Extractive Industries Favor Increasing Exports
Middle-class jobs and communities dependent on oil, gas, and coal are highly sensitive to industry booms and busts. For example, when oil is in high demand, there are more oil patch jobs and tax revenue. But when there is a bust, there are layoffs and the community suffers. Therefore, these communities are also sensitive to foreign policy decisions that directly impact extractive industry demand and pricing.
Some in Greeley mentioned the importance of maintaining good relations with Canada, where many of the oil and gas companies that operate in Weld County are headquartered.18 Others said that a decision on national security grounds to supply more LNG to Eastern Europe, thereby diminishing North Atlantic Treaty Organization (NATO) allies’ energy dependence on Russia, could translate to economic gains for Colorado’s natural gas industry.19 Some business leaders in Grand Junction said that the foreign policy decision that would matter most to their middle-class residents is exporting more LNG to Asia.20 They believed such a move could potentially help to revive the natural gas industry on the Western Slope, which has experienced a 15 percent decrease in oil production and a 10 percent decrease in gas production since 2008.21
Whether the Western Slope is able to export natural gas is not simply a matter of foreign policy alone, however. Much will depend on the completion of the Jordan Cove pipeline project, which is required to transport natural gas from Colorado to the export terminal on the coast in Oregon, from where it would be shipped. That will require permits to be approved and legal challenges to be overcome in Oregon and other states through which the pipeline traverses.22 Many state legislatures, including in Colorado, are shifting toward the tighter regulation of fossil fuel industries and the promotion of higher environmental standards.23 Thus, even if the federal government takes a more favorable approach to the extraction and export of crude oil and LNG, as is the case under the Trump administration, states like Colorado may be moving in the opposite direction.
Climate Change Also Has Major Economic Impacts for Colorado’s Middle Class
While Colorado is a powerhouse in the production of oil, gas, and coal, it is also home to fierce advocates for increased U.S. international leadership on climate change. In 2018, the state elected Jared Polis as governor, who vowed to get Colorado to 100 percent renewable energy by 2040. Since taking office in January 2019, he has already signed into law seven bills intended to limit the state’s contribution to global warming.24 In April 2019, the Democratic majority in the state legislature passed Colorado Senate Bill 181 (Protect Public Welfare Oil and Gas Operations), which shifts the focus of the regulatory Colorado Oil and Gas Conservation Commission from fostering industry growth to protecting community well-being (for example, public safety, health, welfare, and the environment).25 These latest developments are all indicative of the growing constituency across the state favoring tighter regulation of fossil fuel extraction. Those interviewed mentioned a variety of reasons why many Coloradans are now taking a firmer stance, noting the global and local risks of climate change and the economic benefits of transitioning from extractive to renewable industries.
Coloradans Favor Climate Change Leadership to Protect the Planet, Communities, and Industries
For some people interviewed, especially the younger ones, climate change was among the foreign policy issues they cared about most. In Durango, a local contractor within the tourism industry stated that climate change poses the most significant security threat to the country and the world. If the point of foreign policy is to keep Americans safe, she could not understand how climate change leadership would not be the top priority.26
In the Denver suburbs, a focus group participant expressed exasperation with the failure of the United States to do far more on climate change: “I don’t want my grandkids to have to breathe through a mask. You look at the climate science, we . . . clearly have to start working with other countries to start planning as a species to move forward to take care of the earth. We don’t think that way now.”27 Other participants reiterated similar worries and implied that they disagreed with the United States’ withdrawal from the Paris Climate Accords, though few explicitly mentioned it.
For many participants, their concern was less about the long-term impact of climate change on the planet and more about the health and safety implications of hydraulic fracturing, or fracking, in their own backyards. The Denver-Julesburg Basin in northeast Colorado accounts for the majority of the state’s oil and gas boom. That is also where the state has experienced explosive population growth, from Denver and Boulder to Fort Collins and Greeley. Even residents who benefit from oil and gas revenues worry about fracking taking place near their homes, schools, and parks.28
The safety concerns have become so acute for some Coloradans that, in November 2018, the state voted on Proposition 112 that would have required a buffer of 2,500 feet between any new oil and gas development and “any structure intended for human occupancy.”29 This would have entailed a fivefold increase in the existing setback requirements and become the largest buffer in the country. However, Proposition 112 did not pass. Fifty-one of sixty-four counties voted it down, with almost 75 percent of the population coming out against it in the extractive industry-dependent Weld County. Protect Colorado, an organization associated with the oil and gas industry, spent $36 million on its campaign to oppose the measure, lambasting it for going too far and threatening Colorado’s economy and jobs. Even still, fourteen counties voted in favor of the measure, including by over 70 percent in Boulder, Pitkin, and San Miguel. This proposition and the vote results illustrate how divisive the debate over the safety concerns and economic success of the extractive industry has become across Colorado.30
In contrast to the positive implications for the oil and gas industry, some worried that the failure to take decisive action on climate change could negatively impact other important Colorado industries. Many pointed to the susceptibility of Colorado’s outdoor recreation and tourism industries to the environmental challenges created by climate change. Durango’s economy, in particular, depends on tourists that come for skiing, hiking, and water sports, among other activities. A contractor in the tourism industry stated that climate change has been causing more extreme weather events, affecting the city and state’s tourism industry. She noted that in a nearby town in Silverton, businesses had to close following the wildfires in Southwest Colorado, halting their outdoor tourism industry. In addition to outdoor recreation in Colorado, agriculture is another industry susceptible to environmental changes. A focus group participant in Durango added that more frequent droughts caused by climate change would hurt the agriculture industry as a whole.31
Colorado Could Benefit From Transitioning More Quickly to Renewable Energy
In addition to pointing out what Colorado and the world could lose by failing to act on climate change, some also talked about what could be gained by diminishing dependence on fossil fuels and transitioning to renewable energy.
Some people interviewed made the case that, regardless of one’s stance on climate change, some communities should reduce their dependence on fossil fuels for their own economic survival. They cannot afford to remain so vulnerable to industry boom and bust cycles.
One focus group participant in Greeley warned that “if you’re not fracking new wells to replace the bell curve that bottoms out in two years, you have no production, you have no severance tax, no jobs. This creates that downward spiral that I experienced in my lifetime. I remember Black Sunday, May 2, 1982. I was living in Western Colorado. It set off a depression that took Colorado a decade to recover from. These things have enormous consequences, and to repair it [the damage] takes longer. From that perspective, I’ve seen people lose their homes, I’ve seen what we created up here, and I’m really worried about the future.”32
Another longtime resident in Greeley also advocated taking the long view. “Colorado had gold; it had silver, and it goes away. This industry [oil and gas] is going to top out at some point; it’s not a renewing resource. . . . We always look at what’s happening today and want to keep it there, but we need to keep looking down the road. We need to always keep looking at what else is out there, what other industries, what else can keep people employed.”33 He was essentially highlighting two challenges that the state now faces. One is to become a leader in the renewable energy sector in the way it has in the extractive industries. The other is to determine whether the renewable energy sector, or any other sector, could help replace the middle-class jobs and revenue now generated by fossil fuels in various counties across Colorado.
Some interviewees stated that Colorado is well-positioned to grow its renewable energy sector. As a start, it hosted the National Renewable Energy Laboratory (NREL) just outside Denver. A federally funded, premier research institution in the field, NREL works with many of the state’s universities that boast established programs in renewable energy. Colorado also hosts more than thirty other federally funded scientific research laboratories and institutes, many of which focus on climate change, renewable energy, atmospheric research, and the environment.34
By the numbers, Colorado is not yet a national leader in renewable energy, but it is gaining ground. The state ranks twelfth in solar energy installed capacity, with 463 companies working in the industry (49 manufacturers, 231 installers/developers, and 183 others). And it ranks ninth for projected growth over the next five years.35 It has seventeen wind-manufacturing facilities and over 7,000 wind energy jobs.36 In 2017, Colorado’s electric power industry ranked eighth for wind energy generation (9,314,667 megawatt hours) and eleventh for solar thermal and photovoltaic generation (954,498 megawatt hours).37 While about half of Colorado’s electricity generation still comes from coal, it has declined from 91.6 percent in 1990 to 54.3 percent in 2017 (see Figure 13).
Colorado’s renewable energy sector has attracted major investments from big players like British Petroleum (BP) and is poised for growth, but it remains unclear how many middle-class jobs it will spawn. Those interviewed surmised that in wind and solar, some of the best-paying middle-class jobs, especially for those without a college degree, would be in construction for the initial installation. Thereafter, however, the better-paying jobs (for example, in facility operations) would require more specialized skills. One economic developer in Colorado Springs assumed that demand for wind turbine technicians and solar panel installers, who could potentially earn middle-income wages, would go up considerably in the future. However, she urged that more needed to be done to seize on that opportunity, asking rhetorically “how many training programs do we have for those?”38
Concluding Thoughts: Advancing Economic Diversification
As Colorado progresses toward the governor’s goal of 100 percent renewable energy by 2040, economic anxiety will intensify in the areas currently reliant on fossil fuels to generate local tax revenue. This may exacerbate already contentious geographic and political divides. Over three-quarters of the oil-, gas-, and coal-producing counties in Colorado are considered rural (in other words, counties not in a metropolitan statistical area).39 And many of them traditionally vote Republican.40 Thus, when counties in the greater Denver metropolitan area, who vote heavily for Democrats, lead the charge toward more stringent regulation of the fossil fuel industries, places like Greeley and Grand Junction might view this as a case of liberal urbanites disregarding their economic concerns and livelihoods. Those in urban areas may retort that the majority of the population is being held hostage and being endangered by the narrow economic concerns of a far smaller number of rural workers and towns. After all, many climate scientists warn that it will take drastic, historically unprecedented transformations in the global energy infrastructure within the next decade or so to limit global warming to moderate levels, after which it may be too late.41 Experts in the field argue that this drastic action must include leapfrogging from coal straight to renewable energy sources for electricity generation, as simply transitioning to natural gas is no longer adequate.42
These are seemingly incompatible views, but there is one point all sides of the debate agree on: areas now dependent on fossil fuels require more investment to accelerate the diversification of their local economies. Those people living in such areas clearly want to insulate themselves from the industry’s boom and bust cycles and recognize how demographic changes are affecting the state’s politics on climate change. Those people favoring more drastic action on climate change recognize that the political support will not be there unless communities and workers left behind in the move toward renewable energy are helped to make the transition.
The ability of different places in Colorado to diversify their economies will vary considerably. For example, BP has made a multibillion dollar investment in wind farms in Weld County, where community leaders have been thinking seriously about diminishing their dependence on oil and gas industries. In Mesa County, business leaders have been pushing hard to establish a free trade zone, where they could attract manufacturers of outdoor recreation equipment and foreign investors. In coal-producing areas like Delta, however, the challenge is formidable. While appealing in theory, it may not be practical to replace coal jobs with those in the renewable energy sector. The prime locations for solar and wind installations—for example, San Luis Valley and the Eastern Plains, respectively—are far from Colorado’s coal resources (in the Western Slope).
In many ways, the need to invest more in economic diversification is a theme that runs through the discussions on trade, defense spending, and climate change. In each instance, there may be policy decisions that would benefit the majority of Americans, but come at the expense of a minority of communities and workers who represent the essence of the middle class. The need, therefore, is to make the investments required so that this is not a zero-sum proposition, where the benefits to some must come at the expense of others. The United States has thus far had a mixed track record in rising to this challenge.
1 U.S. Energy Information Administration, “State Profiles and Energy Estimates,” state rankings, data extracted June 24, 2019, https://www.eia.gov/state/rankings/#/series/46; and U.S. Energy Information Administration, “Petroleum & Other Liquids: Crude Oil Production,” annual, thousand barrels, 2017 data, data extracted June 26, 2019, https://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm.
2 Colorado Oil and Gas Conservation Commission, “Colorado Oil and Gas Information (COGIS)—Production Data Inquiry,” data extracted April 19, 2019, https://cogcc.state.co.us/cogis/ProductionSearch.asp.
3 Colorado Division of Reclamation, Mining and Safety, “Coal Production—Monthly Coal Summary Report: December 2018,” February 28, 2019 and “Coal Production—Yearly Summary: 2005,” January 25, 2006, https://mining.state.co.us/Reports/Reports/Pages/Coal.aspx.
4 Colorado Division of Reclamation, Mining and Safety, “Coal Production—Monthly Coal Summary Report: December 2018.”
5 James Rodriguez, “2019 Largest Oil Producers in Colorado,” Denver Business Journal, March 26, 2019, https://www.bizjournals.com/denver/subscriber-only/2019/03/22/2019-largest-oil-producers-in-colorado.html.
6 Colorado Mining Association, “2018 Colorado Coal Report: Production and Employment,” https://cdn.ymaws.com/www.coloradomining.org/resource/resmgr/files/mining_in_colorado/coalreport2018.pdf.
7 S. Ahmed, A. Gelman, and R. Wobbekind, focus group, Grand Junction, March 4, 2019.
8 S. Ahmed, B. Lewandowski, and R. Wobbekind, focus group, Greeley, April 1, 2019.
9 S. Ahmed, A. Gelman, and R. Wobbekind, focus group, Grand Junction, March 4, 2019.
10 Colorado Mining Association, “2018 Colorado Coal Report: Production and Employment”; and Michael J. Orlando, “Colorado Oil & Gas Industry Economic and Fiscal Contributions, 2017,” Global Energy Management Program, University of Colorado Denver Business School, March 2019, https://www.coga.org/uploads/1/2/2/4/122414962/coga_economic_fiscal_impacts_-_final.pdf.
11 S. Ahmed, A. Gelman, and R. Wobbekind, focus group, Grand Junction, March 4, 2019.
12 S. Ahmed, A. Gelman, B. Lewandowski, and R. Wobbekind, focus group, Durango, February 25, 2019.
14 S. Ahmed, A. Gelman, B. Lewandowski, and R. Wobbekind, interview with representative of the Bell Policy Center, Denver, March 19, 2019.
15 Colorado Oil and Gas Conservation Commission, “Oil Produced by County, 2018,” and “Coalbed and Natural Gas Produced by County, 2018,” data extracted June 24, 2019, http://cogcc.state.co.us/COGCCReports/production.aspx?id=MonthlyOilProdByCounty.
16 S. Ahmed and B. Lewandowski, focus group, Greeley, April 1, 2019.
19 S. Ahmed, B. Lewandowski, and R. Wobbekind, interview with energy industry leader, Denver, April 2, 2019.
20 S. Ahmed, A. Gelman, and R. Wobbekind, focus group and interview with chamber of commerce and city manager, Grand Junction, March 4, 2019.
21 Colorado Oil and Gas Conservation Commission, “Colorado Oil and Gas Information (COGIS)—Production Data Inquiry,” data extracted June 24, 2019.
22 S. Ahmed, A. Gelman, and R. Wobbekind, interview with former county commissioner, Grand Junction, March 4, 2019.
24 Natalia V. Navarro, “Colorado’s ‘Bold’ Plan for Climate Action Moves Ahead With New State Laws,” Colorado Public Radio, May 30, 2019, https://www.cpr.org/story/colorado-s-bold-plan-for-climate-action-moves-ahead-with-new-state-laws.
25 Colorado General Assembly, “SB19-181: Protect Public Welfare Oil and Gas Operations,” 2019, https://leg.colorado.gov/bills/sb19-181, accessed June 24, 2019.
26 S. Ahmed, A. Gelman, B. Lewandowski, and R. Wobbekind, interview with tourism industry consultant, Durango, February 25, 2019.
27 S. Ahmed and B. Lewandowski, focus group, Englewood, April 2, 2019.
28 S. Ahmed, A. Gelman, B. Lewandowski, and R. Wobbekind, interview with representative of the Bell Policy Center, Denver, March 19, 2019; and Julie Turkewitz, “In Colorado, a Fracking Boom and a Population Explosion Collide,” New York Times, May 31, 2018, https://www.nytimes.com/2018/05/31/us/colorado-fracking-debates.html.
29 Colorado Secretary of State, “2018 General Election Results: Ballot Language for 2018 Amendments and Propositions: Proposition 112 (Statutory)—Failed,” accessed June 25, 2019, https://www.sos.state.co.us/pubs/elections/Results/Abstract/2018/general/ballotLanguage.html#p112.
30 Jacy Marmaduke, “Colorado Election: Proposition 112 Failed. What’s Next for Oil and Gas Setbacks?” Fort Collins Coloradoan, November 6, 2018, https://www.coloradoan.com/story/news/politics/elections/2018/11/06/colorado-election-proposition-112-fails-oil-gas-setbacks/1893643002/.
31 S. Ahmed, A. Gelman, B. Lewandowski, and R. Wobbekind, focus group, Durango, February 25, 2019.
32 S. Ahmed and B. Lewandowski, focus froup, Greeley, April 1, 2019.
34 Business Research Division, Colorado University Boulder, Leeds School of Business, “Economic Contribution of Federally Funded Research Facilities in Colorado, FY2013−FY2015,” February 2017, http://co-labs.org/common/var/upload/files/CO-LABS%20Economic%20Impact%20Study%202016%20Final%20Report%2003_23_17.pdf.
35 Solar Energy Industries Association, Solar Industry Research Data, https://www.seia.org/solar-industry-research-data, accessed May 5, 2019.
36 American Wind Energy Association, “Wind Energy in the United States: Wind Industry Jobs 2018,” data extracted May 7, 2018, https://www.awea.org/wind-101/basics-of-wind-energy/wind-facts-at-a-glance.
37 U.S. Energy Information Administration, “Net Generation by State by Type of Producer by Energy Source (EIA-906, EIA-920, and EIA-923),” 1990–2017, data extracted May 2, 2019, https://www.eia.gov/electricity/data/state/.
38 S. Ahmed, B. Lewandowski, and R. Wobbekind, focus group, Colorado Springs, April 3, 2019.
39 Colorado Oil and Gas Conservation Commission, “Colorado Oil and Gas Information (COGIS)—Production Data Inquiry,” data extracted June 24, 2019; Colorado Division of Reclamation, Mining and Safety, “Coal Production—Monthly Coal Summary Report: December 2018,” data extracted June 25, 2019.
40 Office of the Secretary of State, State of Colorado, “2016 Abstract of Votes Cast,” https://www.sos.state.co.us/pubs/elections/Results/Abstract/2016/2016BiennialAbstract.pdf; Office of the Secretary of State, State of Colorado, “2012 Abstract of Votes Cast,” https://www.sos.state.co.us/pubs/elections/Results/Abstract/2012/booklet.pdf.
41 International Panel on Climate Change, Special Report, “Global Warming of 1.5°C,” October 2018, https://www.ipcc.ch/sr15/.
42 Oil Change International, “Burning the Gas: ‘Bridge Fuel’ Myth: Why Gas Is Not Clean, Cheap, or Necessary,” May 2019, http://priceofoil.org/content/uploads/2019/05/gasBridgeMyth_web-FINAL.pdf.