US oil industry prevails in state ballot fights

The oil and gas industry is claiming victory in defeating ballot initiatives that would have constrained drilling in Colorado, placed a tax on carbon emissions in Washington and heightened permitting rules in Alaska.

Oil and gas companies plunged more than $70mn into fighting those measures, heavily outspending environmentalists and other groups that had gathered enough signatures to put the measures on the ballot in yesterday's midterms. The industry warned the new requirements would cost jobs and raise energy prices, messages that appear to have resounded with voters.

The most costly fight was in Colorado, where voters rejected by a margin of 57pc-31pc a measure that would have required drilling to take place at least 0.5 miles (0.8km) from homes, schools, rivers, streams and parks. Environmentalists said the setbacks were needed to protect vulnerable areas from pollutants and other risks, such a fatal explosion in the outskirts of Denver last year that was traced to a gas line from an active well.

The oil sector outspent opponents 38-1 by raising more than $37mn to defeat the measure, which could have placed half the state off-limits to drilling. Industry opponents warned it would devastate an industry that in August produced 477,000 b/d of crude, costing the state good-paying jobs and tax revenue. Colorado governor-elect Jared Polis (D) opposed the measure but says he wants to give local governments more control over oil and gas development.

Oil refiners led the fight against a proposed $15/metric tonne tax on carbon emissions in Washington that would have funded clean energy, transportation and energy efficiency efforts. The Western States Petroleum Association raised more than $31mn in a campaign against the measure, which they said unfairly targeted refiners while exempting other large industrial facilities.

The carbon tax in Washington was expected to increase gasoline prices by 14¢/USG initially before escalating further as the tax quintupled by 2035.

Voters rejected the measure 56pc-43pc margin, after the industry spent months running advertisements focused on the potential for higher energy prices.

Alaska voters by a 64pc-36pc margin rejected a ballot measure billed as a salmon protection initiative, after oil companies teamed with mining companies in an opposition campaign. Oil producers contributed $3.5mn to the effort and warned it could delay or halt an expansion of projects on the North Slope that generate revenue for a royalty fund that gives Alaska residents direct annual cash payments.

Oil groups did not win every ballot fight, as Florida voters backed a constitutional amendment barring drilling in state waters. But the measure is largely symbolic because such a ban has been in place since 1990 and at most extends about 10 miles from the shoreline, meaning it will have no effect on industry efforts to drill in the eastern US Gulf of Mexico.

California voters also rejected an initiative, by a 55pc-45pc margin, that would have repealed a recent 12¢/USG gasoline tax increase that is intended to fund transportation infrastructure. The oil sector stayed out of the fight, which Republicans had hoped would boost turnout and defend vulnerable seats.