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It’s not a bluff

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While Randy Udall has some valid issues, in that it's reasonable for the state to benefit from mining its natural resources, especially to pay for infrastructure, his logic breaks down when he tries to make the connection that oil companies' high profits are due to gas production in Colorado (HCN, 2/04/08). Most of the companies drilling in the Grand Valley are doing so at a loss. This is primarily because the gas occurs in fractured pockets. In other words it's a lot more work to get at than other reserves.

These companies are making profits at the pump and off of other sites, but the Colorado ones are not adding to the bottom line of most of these companies. As they scale up and recoup their drilling costs, they may one day start making money off of their Western Colorado investments. However, if the state makes the cost of doing business too high, they will pull out in favor of other lower cost areas.

Prosperity is never achieved through taxation. The energy we have available to us here is a gift. Five percent of a growing and thriving business is better than a higher tax on a decreasing one.

Alan Sage
Grand Junction, Colorado

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