Rep. Judd: 'How could anyone even notice' an energy tax hike?

Face The State Staff Report

State Rep. Joel Judd wants to give his constituents a peek into the life of a Colorado lawmaker. Subscribers to his e-mail list recently received a detailed retelling of the Denver Democrat's attendance at a seminar sponsored by the Colorado Oil and Gas Association, after which he questioned the economic model of Colorado's largest industry.

JuddState of Colo.

COGA and its members are seeking to build momentum after the defeat of Amendment 58, the failed effort to raise the state's tax on oil and gas development championed by Judd's fellow Democrat, Gov. Bill Ritter. Part of that strategy, according to the association, are educational events for legislators and other policymakers such as the one recently attended by Judd. Up for discussion: Shale energy on the western slope and efforts to raise the state's severance tax.

While most e-mail newsletters from legislators are dry and full of legislative minutiae, Judd opts instead to write in a more personal tone. His Dec. 15 e-mail (PDF) recalls the seminar's dinner menu ("A cold cut, tossed salad and chicken salad buffet") and a screenplay-ready description of the venue ("The forty-first floor of the Cash Register building must have a magnificent view of downtown enveloped in a snowy night. I forget to look.")

But most striking are his observations on the energy industry's tolerance for higher taxes like those promoted by Ritter and allied environmental groups.

Judd questions whether higher state energy taxes would have any impact on producers, given the wildly fluctuating energy commodities prices of the past year. "Gov. Ritter proposed raising [the severance tax] by a fraction. How could anyone even notice that increase amongst such wild price swings?" he recalls asking.

COGA's response, in his words: "In a tough location, when prices are down, two percent is the difference between a well making or losing money."

But that assessment differs from Judd's. As he illustrates via analogy, oil or gas wells that close to unprofitability shouldn't become the basis for keeping taxes low. "Survival of the least profitable shop keeper or farmer isn’t the guiding principle of our tax system," he writes. "Survival of the least profitable natural gas well...?"

"It's too bad an elected official would diminish the contributions of hard-working folks in oil and gas," said John Swartout, government affairs director for COGA.

While he disagrees with Judd's analysis of the industry, Swartout is also quick to praise those legislators open to learning more about the state's energy sector. "A lot of people that go after this industry don't take the time to come to something like that...I think it's beneficial," he said.

For his part, Judd believes there's value in his honest and direct communication style. "This is the tool I have to communicate with people," he said of his constituent e-mails. "I'm hoping it gives the reader a feel for what it is like to be there."

"I always get some feedback," he said. "One constituent wrote they hope we stand up to oil and gas industry. There are a lot of newsletters out there that aren't read by anybody. I hope people find mine interesting enough to read through it."

Even after Amendment 58's defeat, Colorado's energy producers still face fresh challenges. Rules adopted this month overhauling the permitting process for oil and natural gas wells have some companies beginning to scale back capital investments, citing an unpredictable and subjective regulatory environment.