This State for Sale: A Special Report

The state's oil and gas industry proves that the squeaky wheel gets the grease.

Sid Lindauer's family has been ranching in western Colorado for three generations, fighting winter storms, brushfires and outbreaks of disease, but never worrying much about what went on in the state legislature.

Until now.
The area around Lindauer's ranch just outside Parachute is dotted with natural-gas wells, part of a huge pumping operation by the Unocal Corporation. Lindauer and several of his neighbors have been trying to get some control over the location and size of the gas wells the company has drilled around their homes, but they've discovered that Colorado law is written to give the oil-and-gas industry final say over almost all of those decisions.

"We're trying to preserve our ranch as much as we can," says Lindauer. "All the rules and regulations work toward their interests."

Lindauer has appealed to the Colorado Oil and Gas Conservation Commission, which is charged with regulating the industry, to reduce the impact of the often noisy and smelly wells. But the commission has never been much help. "They told me over the phone, 'Our business is not protecting the public, it's contributing to the development of oil and gas in Colorado,'" says Lindauer.

Colorado's legal bias in favor of the oil-and-gas industry is no accident. And Bill Owens did much to make it that way--during his fourteen years as head of the oil industry's main lobbying group--at the same time that he served in the state House and Senate.

Owens was state director for the Rocky Mountain Oil and Gas Association, a federation of 400 companies that lobbies for lower taxes and less regulation. He was paid up to $75,000 a year by the group, on top of his legislative salary. During those years, Owens regularly voted on legislation affecting the industry, including safety requirements, tax rates and appointments to the oil and gas commission, casting 52 out of 54 votes in favor of oil-and-gas producers. In 1989 he cast the deciding vote to kill a proposal that would have increased the liability of gas-station owners for leaking underground storage tanks.

In 1994 Owens resigned his position with the oil and gas association to make a successful run for the state treasurer's office. During last fall's campaign, he told reporters that during his time in the legislature he had never violated the state's ethics law, which bans elected officials from voting on bills in which they have "a personal or private interest." For a politician with nothing to hide, however, Owens's official biography on the State of Colorado Web site makes a curious omission. Rather mysteriously, that document says "Owens was named executive director for a Colorado trade association in 1980," making no reference to the energy business.

As governor, Owens is now in a position to do a host of favors for the industry that once employed him. In March he appointed three members to the oil and gas commission; two of those new commissioners, Daniel Skrabacz and Abe Phillips, have worked in the petroleum industry for years. Phillips also donated $100 to Owens's campaign.

All of this is troubling to Lindauer, who recently testified at the legislature in favor of Representative Bill Kaufman's bill, which would have prohibited most members of the oil and gas commission from having a "significant financial interest" in the industry they're charged with regulating. The bill was killed in the House after the oil industry lobbied against it.

Owens knew that many people around the state thought the oil and gas commission needed independent voices, Lindauer says, but the governor chose to ignore that sentiment when he named the new commissioners. "I was very disappointed with his appointments," he adds. "That board has to be balanced out to protect the public interest."

But the governor's spokesman, Dick Wadhams, says it would be ridiculous for Owens to avoid nominating industry people to the commissions that regulate their fields. "If it's not good for someone with an energy background to be on the oil and gas commission, should we not have people with agricultural backgrounds on the state agriculture board?" he asks.

Although his background includes work as a petroleum engineer, new commissioner Skrabacz insists he can be fair to landowners who come into conflict with natural-gas producers.

"I'm not carrying an agenda for the industry," Skrabacz says. "I know what my objective is: listening and having a dialogue with the surface owners."

The oil and gas industry rallied around Owens last fall, pumping thousands of dollars into his campaign. Prominent contributors included oilmen Cort Dietler, Philip Anschutz, Bruce Benson, Sam Gary, Fred Hamilton and Phillip Marcum. Companies that helped fund Owens's effort included Texaco, Sinclair, Amoco, Total Petroleum, Chevron, Gerrity Oil and Gas, and Patina Oil and Gas.

The industry's largesse didn't end with the campaign, either. For the extravagant inaugural ball that marked the beginning of the Owens administration, many of the new governor's friends from his days as an industry cheerleader opened their wallets. Benson, Dietler, Amoco and Texaco all ponied up $15,000 for the exclusive party, while Colorado Interstate Gas contributed $12,500.

Despite Owens's long affiliation with the industry, Greg Schnacke, executive vice president of the Colorado Oil and Gas Association, insists Colorado's new governor is not a tool of oil and gas interests. "I think the governor understands the nature of the oil and gas industry," he says, "but I don't think he's given us any special attention."

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