Hard times reshuffle the political deck
A couple of years ago, signs asking "Why Does Ritter Hate Oil and Gas?" sprouted along western Colorado's roadsides, just as Gov. Bill Ritter promised new regulations designed to temper the state's frenzied drilling boom.
Industry boosters claimed Ritter would regulate them right out of the state. And oddly enough, within the year, many companies did scale back. But new regulations had nothing to do with it. A gas glut, prolonged recession and the discovery of more profitable fields back East were the true culprits.
Still, it changed Ritter's tune. As Grand Junction's unemployment soared and state coffers emptied, he began praising natural gas, calling it an essential clean fuel for the future. He vowed to help the industry get back on its feet, and in early April, he signed a clean air bill that makes the conversion of three coal-fired power plants on Colorado's Front Range to natural gas an almost sure thing.
The measure, backed by a strange-bedfellow coalition of gas interests and environmentalists, should boost local production, but it's left the state's traditional extractive powerhouse -- the coal industry -- out in the cold. The Colorado Mining Association says it was "blindsided" by the bill, which it claims will result in hundreds of lost jobs. CMA President Stuart Sanderson asked, "Why harm one industry to benefit another?"
The short answer is that, during hard times, no industry is safe. As HCN Contributing Editor Judith Lewis reports, even Nevada's powerful gold-mining industry, which has avoided paying significant state extraction taxes for more than a century, appears unexpectedly vulnerable. Faced with cutting schools and social services after the housing and tourism collapse, some state leaders are openly asking why multinational corporations paid only $201 million in taxes on some $31 billion in gold pulled from Nevada between 2000 and 2008.
The Progressive Leadership Alliance of Nevada is gathering signatures to place a measure on the ballot this fall that would increase mining taxes by a factor of seven. It's a long shot, but in this economic climate of simmering populist rage, it could win.
Proponents, however, would feel more secure if they had one of the state's biggest taxpayers -- gaming -- on their side, the way Colorado's greens had the gas industry. It should be simple: More taxes on mining could mean fewer new taxes on gambling. But, so far, casino owners have been hedging their bets. Gold-mining has an idealized history on its side; gambling has, well, a certain aura of sinfulness. And people are always more willing to tax sin.
It may take an even deeper financial crisis to transform Nevada's politics. But in Colorado, the recession has not only severed coal from gas; it's forced Gov. Ritter into early retirement. Business-friendly Denver Mayor John Hickenlooper will compete for the Democrats this fall. And the "Ritter hates oil and gas" signs still stand, like grim historical markers.