Q: Interior Secretary Ken Salazar recently announced a change in federal oil and gas leasing policy, putting the emphasis on government oversight and planning. What impact will that have?
A: It is a fundamental shift from scientists, land managers and businesses partnering to identify the best prospects to a top-down command and control by bureaucrats.
There is this notion the U.S. is awash in a sea of natural-gas supplies, and there is growing competition among regions to produce that natural gas.
The concern is that more uncertainty will reduce investment in the West and leave us at a competitive disadvantage.
Q: That isn’t the only policy worry for the industry this year, is it?
A: The biggest concern as it relates to this year is the president’s plan to deal with federal budget deficits by raising taxes on oil and gas.
There are at least eight tax provisions that would increase taxes by $80 billion over 10 years.
The changes could reduce investment in our region 30 percent to 40 percent by some estimates.
Tax laws are the biggest ticket item that could impact Colorado’s economy this year.
Q: Given all these potential regulatory and tax changes, what are the prospects going forward?
A: Long-term demand for gas is growing, and the West is as competitive as any region. Energy demand is projected to rise 14 percent between 2008 and 2035, according to the Energy Information Agency, and natural gas is projected to supply 20 percent of the nation’s electricity.
This presents a real opportunity for the Intermountain West, but it will take the right leadership and policies to assure job creation and economic growth aren’t lost to other regions.
Edited for length and clarity by Mark Jaffe.
