So it turns out that Colorado provides $300m in annual tax subsidies to the oil and gas industry. And it turns out that Colorado is the only state in the country that provides these subsidies. This subsidy was put in place in 1982 to help jumpstart oil and gas development in the state – when gas cost less than $1 per gallon. Today, the industry is very healthy and is enjoying record-high petroleum prices and, hence, revenues and profits. This is clearly an industry no longer in need to state support. Additionally, these kinds of subsidies distort the “free” market and provide dirty, cabon-heavy petroleum-based energy sources with a structural market advantage over the deployment of clean energy technologies that we so desperately need to encourage. It is hard enough for new technologies to establish themselves in the marketplace when the playing field is far from even.
Governor Bill Ritter and A Smarter Colorado are supporting Amendment 58, which will end these out-dated and unnecessary subsidies and use the savings to fund scholarships, wildlife habitat preservation, environmental cleanup for areas damaged by gas and oil development and fund renewal energy development.
Not surprisingly, the opposition is well-funded to the tune of about $10m, with most of the funding coming from oil and gas companies. Call me naive, but I’ve been pretty disgusted with the ads the opposition is running — they are full of bald-faced lies, and claim that Amendment 58 is a tax-increase., which is just completely untrue. All it is doing is removing an outdated tax-break that was handed out to energy companies nearly three decades ago, something that IMHO has no place in the state’s constitution. Given the blatant falsehoods the opposition is willing to spread and the fact that the election is coming up in less than a month, I decided to donate money to the cause and to blog about it as well. Tell a friend, and don’t be fooled by the opposition’s ads.