Houston companies join fracking fray in Colorado

HOUSTON – As Texas nears the close of its heated primary season, a pair of Houston-area oil and gas companies are focusing on politics in Colorado, where they’re fighting ballot initiatives they say could threaten that state’s energy industry.

Anadarko Petroleum Corp. and Noble Energy Inc. are pumping campaign money into a state where pumping oil and gas is central to their portfolios, and where energy industry critics are pushing for new restrictions.

Colorado activists hope to put nearly a dozen initiatives on the November ballot that would give local governments greater authority to limit hydraulic fracturing or require greater distances between drill sites and existing structures.

Anadarko and Noble created Coloradans for Responsible Energy Development last year to counter the push.

“Any one of (the initiatives) is inherently meant to be detrimental to the oil and gas industry,” said Jon Haubert, the group’s communications director. “It’s that simple.”

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It’s still early in the political process. The state has yet to approve the language of most of the potential ballot initiatives, and backers would need to collect 86,000 signatures for each initiative by August to get on November’s ballots.

But it’s enough to catch the attention of the energy industry.

“Industry is now taking this seriously, and they’re using all their resources to make sure Coloradans are properly educated and they can make a full decision that’s not based on mythology,” said Christopher Guith, senior vice president for policy at the U.S. Chamber of Commerce’s Institute for 21st Century Energy.

Historically the energy industry has held open houses and public meetings to try to win over stakeholders in areas where it faces opposition. But Coloradans for Responsible Energy Development is taking a more head-on approach.

The organization is focused largely on a single task: convincing Colorado residents that hydraulic fracturing is safe.

The well completion technology of injecting sand, water and other fluids into reservoirs under pressure to free oil and gas from tight rock has been central to North America’s energy boom.

Critics fear hydraulic fracturing can contaminate water supplies and cause small earthquakes. A handful of localities have banned it, prompting litigation over whether they even have that authority.

The state legislature soon may take up fracturing and related issues in a special session.

Coloradans for Responsible Energy Development maintains two websites with information supportive of fracturing, engages with social media and has aired six television advertisements and four radio advertisements in Colorado.

“We’re not a trade association,” Haubert said. “We don’t do policy issues. We don’t do regulatory issues. We don’t do litigation.”

Those on the other side say CRED’s message has become ubiquitous during the group’s short time in Colorado.

“Billboards, radio ads, television commercials — it’s pervasive,” said Sam Schabacker, western region director for Food & Water Watch, which opposes hydraulic fracturing.

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The efforts by Anadarko, based in The Woodlands, and Houston-based Nobel Energy, demonstrate the outsized importance Colorado has to both companies.

Anadarko has 350,000 net acres in a field called Wattenberg, part of the D-J Basin in the northern part of the state. “Watteneberg is our best and biggest asset,” said Chuck Meloy, Anadarko’s executive vice president for U.S. onshore, in an investor presentation earlier this year.

Noble Energy, meanwhile, is betting big on its activities in 609,000 acres in the D-J Basin, which it calls “a premiere asset with limitless possibilities.” Combined, the companies have $10 billion in planned investments in the area.

Because CRED is registered as an education organization called a 501(c)6 non-profit, it doesn’t have to file campaign finance reports with the Colorado Secretary of State.

So no public records show how much money Anadarko and Noble have pumped into the organization, and the companies aren’t saying.

An Anadarko spokesman said only that the company’s CRED investment is “significant.” Noble did not respond to inquiries on the topic.

Officials of the organization itself wouldn’t say how much it’s spent on advertising.

Federal Communications Commission records posted online show that CRED spent $166,225 on 233 television spots from September to December 2013.

But those records don’t include radio advertising or television ads in smaller markets.

The Center for Western Priorities, an environmental advocacy group, estimated CRED spent $2.4 million on television and radio advertising from October 2013 through March.

Anadarko and Noble also are funding an issues committee called Protecting Colorado’s Environment, Economy and Energy Independence, which can do more overtly political work to oppose the ballot initiatives.

That organization has raised $2.98 million, according to campaign finance records. Anadarko and Noble have contributed $500,000 each to that committee, and DCP Midstream, jointly owned by Phillips 66 and Spectra Energy, contributed another $250,000.

The political group has committed to spending $886,350 to run more than 1,000 television advertising spots on Denver’s ABC affiliate from June through November, according to FCC records.

But officials of Coloradans for Responsible Energy Development say that unlike the political group, it’s strictly an educational endeavor. “We present people with facts and let them decide for themselves,” Haubert said.

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CRED is targeting its message to several groups in particular, including parents who are concerned with health and safety issues, and newer residents of Colorado, who may not appreciate the economic impact the energy sector has on the state, Haubert said.

The organization focuses on sending a direct, simple message that hydraulic fracturing is unambiguously clean and safe.

It also warns that a ban on fracturing could cause vast losses of jobs and tax revenue for Colorado.

“Through environmentally safe fracking we’re tapping into vast shale reserves under our state,” one typical commercial says, using a shorthand term for fracturing. “It’s a process tried and true for more than 60 years.”

Haubert said part of CRED’s goal is to avoid previous missteps by the industry — struggling to articulate a message about fracturing and instead getting too bogged down in technical details.

“You’ve got to do it short and fast,” he said. “That’s how the public gets information, and that’s not how the industry has been presenting its story.”

But critics say it’s important to consider the source of that message.

“When folks look at information — whether its from CRED, or the Sierra Club or somebody else — they need to keep in mind that people get to decide what it is they present,” said Catherine Collentine, Colorado representative for the Sierra Club’s Beyond Natural Gas campaign.

“When you look at information the oil and gas industry is putting forward or putting funding into, you must keep in mind they’re running a business,” she added. “They have a financial stake in how their information is perceived.”

Some interests pushing the ballot initiatives, who insist there’s plenty of evidence to raise concern about hydraulic fracturing, are harsher in their criticism of the industry’s techniques.

“It reminds me of how the tobacco companies spent millions of dollars on advertising saying smoking wouldn’t cause cancer,” Schabacker said.

But Haubert said his organization is designed to combat criticism of the industry that has spread through social media, where environmental activists have had success promoting their message.

“The general public gets its information via social media, and on social media, they’re getting overwhelming negative information about the industry,” Haubert said. “I think what CRED has done is leveled the playing field.”


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