7-21-25 - 7am - Federal vs Local Oil Regulations

Episode Transcript

Speaker 1 (00:00):
Since Michael is talking about in and out burgers over
the weekend. Fun fact, the average in and out Burger
store manager's salary is higher than that of a w
NBA player. In California, the average store manager salary for
an in and out Burger is one hundred and eighty
thousand dollars.

Speaker 2 (00:24):
We're in the wrong, We're in the wrong, biddiness, and
again we're in the wrong business. To show you how
important I think text messages are, I want to read
one to you, and then I want to respond to it.
I've frantically been trying to find my file that I've
got on my computer about this, and I want to

(00:46):
address it because this is a great, great point. So
let's set aside for a moment all of the great
things that Trump has been doing that I some of
them I still want to talk a little bit more
in depth about. But this text message side tracks me

(01:07):
for a very particular reason, and I'll just give you
the overall reason. We cannot always look to the federal
government to save us. We cannot always look to the
federal government to fix things. Because while Donald Trump may
be fixing things, state and local governments are effing them up.

(01:29):
Simultaneously zero four to three three rights Mike or Michael Smartasses.
I will start by saying, I am a Trump supporter.
I do think he's doing a wonderful job. But when
I keep hearing about how good the job market is,
I don't see it. I work for a company that

(01:51):
is involved in the oil field industry. For the past
two months, we have been extremely slow. We have a
lot of different cuts, including our hours take anyway, our
holiday pay. I don't blame this on Trump. I blame
it on Colorado and all the restrictions they put on
oil and gas in Colorado. But the main point I

(02:12):
want to get across is that the job market across
the board isn't doing better.

Speaker 1 (02:17):
Well.

Speaker 2 (02:17):
Let's focus instead on the difference between what Trump's doing
for the oil and gas industry versus what Colorado is
doing to the oil and gas industry. I started looking
into this mainly because I used to practice oil gas

(02:38):
law a couple of years ago, and I get a
lot of notes. I want to walk through these notes.
I would start by saying that Colorado has significantly increased
oversight of the oil and gas industry in this state.
They've done it through statutory mechanisms, rules, regulation policies. And

(03:01):
if you want to know when I think it really
started to get bad is the passage of Senate Bill
nineteen one eighty one back in twenty nineteen. That bill
reformed the entire regulatory framework. It shifted the mission of
the state's oil and gas regulator, renaming the Colorado Oil

(03:22):
and Gas Conservation Commission to the Energy and Carbon Management Commission. Now,
that change alone should raise a red flag. That should stop.
That should stop you in your tracks and go wait
a minute, Carbon Management Commission. Yes, that realignment, that new

(03:46):
regulatory framework, everything from fostering industry development to prioritizing public health, safety, welfare,
environmental protection. And then they took that bill and started
building all these regulations on that foundation, and in the
process they impose stricter permitting processes. Now, I want you

(04:08):
to think at the same time that I'm describing this
to you, I want you to think about what Trump's
doing at the national level. He's trying and he's trying
to undo federal regulatory burdens on the oil and gas industry.
States like the dumbasses, the Marxists, the Communists, and the
dumb ass governor in this state are doing just the opposite. Now,

(04:33):
what most people don't stop and think about is, now
put yourself in. You are the CEO of an oil
and gas production company, or you're a supplier, or you
are a purchaser, you're somehow you're involved directly or indirectly
in the oil and gas industry. Now you're trying to

(04:57):
work within a regulatory framework that is at opposites of
each other. You have to comply with both, so you
now you have to start making trade offs. Okay, well,
what can we do over here? Because the Feds say
we can do this, but the stupid state of Colorado
says we can't do that. So how do you navigate that?

(05:17):
That alone increases your costs. You now have to hire
additional geologists, lawyers, seismologists, everything you can possibly imagine to
try to navigate this stupid regulatory framework because the state
of Colorado wants to kill the oiling gas industry. If

(05:39):
Jared Polist is listening right now, he would say, oh,
let's know what I'm trying to do. Yeah it is.
Don't lie you second, do you know that's exactly what
you're trying to do because you and your stupid husband
think that oil and gas is destroying this state. Oil
and gas is what makes this state one of the
wealthiest states in the country three at one time, but

(06:01):
you're absolutely eviscerating it. So you start with Senate Bill
nineteen one eighty one. It lengthened the permitting timelines, went
from weeks to months. It added layers and layers of
local approvals. It increased in compliance expenses for all the
environmental assessments and all the mitigation that they have to do.

(06:25):
Then then under that bill, they started putting together all
these emissions and air quality rules. So you get strict
methane leak detection requirements, monitoring requirements, repair requirements, rules to
minimize volatile organic compounds, nitrogen oxides, all of that because

(06:47):
we want the air water to be cleaner and cleaner
and cleaner, until it's cleaner than what distilled water. I mean,
come on, at what point do we accept that mankind
inherently and inescapably causes some things to be dirty. But
as I've said a thousand times, there was a time

(07:09):
when I would sit in this studio, you know, almost
twenty years ago, and I could never see Pike speak
because of the brown cloud well, now I can okay, Well,
how much cleaner do you want it? Well, I guess
they want it so that I can see I don't know,
so I can see the damn squirrels running through the
pine trees? Is that what you want? You want me
to be able to see the marmints at the top

(07:30):
of the Pikes Peak? Is that what you want? I
don't want to see the marmots from this studio. I
don't give a ratsass about seeing the marmins. The marmins
will do just fine without me. So through all this
regulatory process, they didn't start mandating frequent inspections, technology upgrades
because you got to have low emission equipment, and then
they added reporting requirements, all of which means that to

(07:56):
raise capital and then to cover your operation costs that
is increased by millions per operator every single year. So
the cost of doing business in Colorado has become more
expensive to produce something that we absolutely need. Because while
Trump's trying to loosen it, Jared Polis and the communists

(08:17):
of the Pola Bureau are trying to make it more difficult. Again,
going back to regulations, they imposed higher bonding requirements to
cover cleanup costs. A flat fee of one hundred and
fifteen dollars per well. Fee went into effect just this
past April to fund plugging abandoned wells. And they increase

(08:39):
the liability for environmental damages. Now that may sound good
to you, but do you know how you enforce increased
liability for environmental damages?

Speaker 1 (08:53):
Well?

Speaker 2 (08:53):
NGOs or the State of Colorado on their own will
come in and they'll claim claim that there's some horrific
environmental damage. Now you're in in federal court or maybe stay,
I don't care, you're just in court. Now you're in court,
and you're hiring lawyers, you're hiring geologists, you're hire you're

(09:14):
in hiring, you're hiring environmentalists, you're hiring all these expert
witnesses because you're trying to reduce the damages that they're
imposing on you for something that you and I might
look at and go, you know what, just ignore that,
that'll that'll go It's kind of like oh that rash
you got right there, Eh, that sore throat I got

(09:36):
right here, that'll go away pretty soon. All that elevates
all the upfront financial burdens the bonds. Those bonds can
reach hundreds of thousands of dollars for every single well,
so if you're a small operator, that's probably going to
lead you to bankruptcy or just you know, selling out

(09:56):
to a larger producer. So as much as we like
small businesses, as much as Jared Polosis tells us he
likes small businesses, what he's really doing is he's foreseeing
small oil and gas producers to sell out to the
larger producers. So all this consolidation is going on. And
then they again, understand that bill, that bill in twenty nineteen,

(10:22):
they gave power to municipalities to impose bans, fees, they're
allowed to put on additional rules, and then you've got
the potential for ballot measures or lawsuits out the wazoo.
All of that creates this patchwork of regulations that increases
your legal fees, increases your compliance costs. Your compliance costs

(10:44):
are outrageous because your compliance costs vary from city to city,
county the county, between the state and the federal and
you've got to comply with all of it. Colorado is
Jared is you know what I just what I despise
about that ahole. Jared Polis is he made his billions

(11:07):
in the private sector, and now he wants to eviscerate
the private sector in this state. He's a typical Marxist. Yeah,
I got mine. Sucks to be you. Now I'm going
to control you and tell you how to run your business.
If anybody had been trying to tell him how to
run his business, he had a screen, bloody murder. I

(11:30):
truly despise the man. Yeah, I find it fascinating when
I think about the entire well because many of them
are new. But when I think about the old Colorado
Congressional delegation, of which Jared Polis and Diana get we're
a part of. When I was, when I was the undersecretary,
I could deal with them. I honestly, God don't think
I could deal with any of them today. They're simply

(11:53):
out of control. But let's fast forward to twenty twenty four.
You got bills for greenhouse gas reductions, improved air quality.
You got oh, we got to get people out of
their cars and into mass transit. All of that funding
is going to come from fees charged to the old
and gas industry. Now they reached a truce, and again,

(12:18):
I would like to know how many you know. So
what they did, I mean, I'm not exaggerating here. State
of Colorado said, we're tired of all these initiatives and petitions.
We're tired of having all these bout fights at the
leedge at the Polup Bureau. So let's all get in
a room and figure out, let's cut a deal. So
they bring in all the all the big producers to

(12:41):
the demise of the small producers, and they cut a deal.
And the deal is and this is what really pisses
me off about. So there's an organization that you hear
advertising lots about, you know, energy development in the state,

(13:04):
or you'll see you know, Excellomobilers, you know, some big
oil and gas producer talking about how, you know, what
they contribute to the community and all these things they do.
You know why they're doing that, because while they're trying
to convince you about all the great things they did,
they cut a backdoor deal with Jared Polish and the
legislature for all these additional costs and regulations because they

(13:27):
didn't give a rat's ass, because they knew that the
smaller producers could not afford it, so they could bankrupt
the smaller producers go in and buy those assets and
consolidate more power to themselves. So if I've got any
criticism of the larger oil and gas producers, it is
that you actually engaged in anti competitive behavior for your

(13:52):
own selfish interest, and now by doing so, you've added
all this cross agency oversight. You got to all these
requirements for investments in cleaner tech and contributing to all
these different funds, all of which inflace inflates costs of
doing business in these in this state. So you know

(14:14):
what that's done. That has positioned Colorado's regulations as among
this country's strictest regulations of all fifty seven states. There's
been a huge increase in rules over the past few years,
all of which we you know, adds to the compliance costs,

(14:37):
and and critics from the industry themselves, who you know,
got suckered into this. Even some of the large producers
are now arguing, well, you know what, you shouldn't have
got a deal with the devil. I truly don't feel
sorry for you. I love the oil and gas industry.
It's been very very good to my wife's family. It's

(14:59):
been very good to me as a lawyer. So I
love you guys. But you kind of deal with the devil.
And now even your own industry is arguing that what
you did is created an unstable policy environment. And what
does that do? You know, we have the rule of

(15:22):
law for one reason, so that you can enter into
a contract and you can feel safe that that contract's
not going to be interfered with by the government. Well,
what Colorado did is they created an unstable policy environment
and that in turn deters long term commitments to do

(15:43):
drilling or exploration in this state. And those have real effects.
They have multifacet effects on the oil and gas sector,
economic operational, market shifts, and some will try to highlight
the benefits like, oh, well we've got reduced pollution at

(16:07):
what costs? Can can you really quantify how clean clean
needs to be? I don't want dirty air. I want
to be able to see Pike's Peak. I want to
be able to see the front range when I take
a break, and you know, during the program, I want
to see the snow capped purple mountains. Majesty, of course

(16:27):
I do. I want fresh clean water, I want fresh air.
But I also recognize that there's a trade off. But
the yahoo's the Marxism, the legislature do not believe that
because they don't want the oil and gas industry to exist.
And if you don't believe me, stay tuned. I'll give

(16:50):
you some details.

Speaker 1 (16:59):
You're going to tell us you never had an affair
at work.

Speaker 2 (17:02):
I mean, after all, your title was under a secretary.
Don't make me laugh. That's pretty good, though, that is
pretty good. You can you give mister secretary, where's my coffee?
It's right, I can't get your coffee right now because
I'm under the secretary. And at least somebody, at least

(17:26):
a couple of you got the fifty seven joke, fifty
seven state joke. Good grief, it's not me, it's Barack Obama.
Let me give you some receipts about what Colorado's doing,
because this all stems from a text message that says,

(17:48):
where are finding yours. I will start by saying, I'm
a Trump supporter. I do think he's doing a wonderful job.
But what I keep hearing about how good the job
market is. I work for a company that is involved
in the oil field industry. Now it doesn't say what,
so it could be any number of things. It could

(18:09):
be a producer, it could be a supplier. It could
be a you know, a geology firm, any number of things,
but somehow they're involved in the oil field industry. Well,
the stats I'm about to give you should not shock
this individual. For the past two months, we have been
extremely slow. We have a lot of different cuts, including
our hours and taking away our holiday pay. I don't

(18:31):
blame this on Trump. I blame it on Colorado and
all the restrictions they put on oil and guys in Colorado.
That is exactly right, and that is exactly what we're
going through. These regulations that were cut when Polis and
the Marxists at the Politbureau all sat down with the

(18:54):
big producers and said, hey, can we just come to
an agreement on something. And so now here we are
six years later after the bills passed in twenty nineteen,
and a few years later after getting all the regulations passed.
Now we're seeing the effect of that. And now the

(19:17):
dummies that went to the meeting went to the you know,
the smoke filled room and cut the deal with Polis.
Maybe you should learn you can never trust democrats. I
don't care how desperate you are. And quite frankly, I
think sometimes big oil and I don't mean that pejoratively.

(19:38):
I mean literally, the big producers versus the small producers
thought they could just shove the small producers out because
they could. They the big producers thought, hey, we can
absorb these costs and we can still you know, do business.
And then when the smaller producers can't, we'll just swoop
in and buy them up, and and we'll show our stockholders, hey,

(20:02):
look we're growing. You're growing by acquisition. You're not growing
by expansion of your production. You're growing by acquisition. And
that is exactly what's going on in this state. Job
losses and reduced employment. Here's what I have written down.

(20:23):
Direct employment in the oil and gas sector dropped from
thirty two thousand, seven hundred and March of twenty nineteen,
about the time this bill was passed to twenty thousand,
five hundred by late twenty twenty two late twenty twenty two.
That is a loss of two thousand, two hundred jobs

(20:45):
in a short three years. But that doesn't count the
broader ripple effects, potentially costing tens of thousands of more
jobs because of the compliance costs and the reduced activity.
There was a study done by Texas policy and a
couple of others back in twenty twenty. Just last year,

(21:07):
that study estimated that Colorado's regulatory surge has led to
significant job erosion because the higher cost in the state
of Colorado to produce a barrel of oil or a
cubic foot of natural gas is higher than it is
in our neighbors of Texas or Wyoming, or for the
matter of New Mexico or Oklahoma. So you're driving production

(21:32):
and jobs out of the state. So when that dumbass
governor tells you, oh, he's all for job growth and everything,
he's a lion sack of poop. They all are. I
truly despise them. They're destroying this state. They're destroying your businesses,

(21:54):
They're making it more expensive here. It's you know, we
talked about the California fornication of Colorado. Well, let me
just put it in the past tense. We've been California caated.
It's been done and Jared Polis and the Democrats, but

(22:15):
really the Marxists have done it all in the name
of climate change, all in the name of you know,
cleaner air and cleaner water, all in the unstated name
of more control. Get you out of your cars. Why
do you think they're not patching the highways, Why do
you think they're not improving the infrastructure. Why do you

(22:35):
think they're not widening roads? Because they want you out
of your car, and they want you on the RTD,
which never works, is crime ridden, crime infested. They want
you to take that to go to work in downtown Denver,
and you're just smart enough to say, no, not going
to do that. I'll find a job in the tech center.
I'll find the job up north, somewhere, up north of

(22:57):
one hundred and forty fourth, someplace. I'm not to go
to Denver. I don't blame anybody for not doing it.
Then you get all the permitting delays and all the uncertainty. Well,
when you have permitting delays and you have uncertainty, that
means that any new oil and gas, any one individual well,

(23:17):
is going to be slowed down in its development. Do
you know that investors in the oil and gas industry
look at Colorado as a penalty box for stocks? Do
you know where I found that? Of all places, The
Colorado Sun, one of the left wing papers in this state. Yeah,

(23:38):
they free admit that all of these regulations have made
Colorado a penalty box for people that want to go
invest in the oil and gas industry, and then production growth,
the actual production of more oil and gas has stagnated,
or even worse, it's gone elsewhere. A give you an example,

(24:02):
a potential statewide ban on new drilling would absolutely devastate output,
and that in turn would devastate tax revenue, and that
in turn would utterly destroy economic contributions. That's all estimated
somewhere between thirty one and thirty four billion dollars annually preregulation.

(24:22):
You can go find that if the Denver Gazette, upstream
investment has decreased because the operators are facing higher hurdles
for rigs and exploration and all of the peripheral industries
that go along with that. So to the Texter, what

(24:44):
you feel and what you see is true. Yes, you
can look beyond Colorado and you can see that. Yes,
Trump is deregulating, Trump is drill baby, drill, Trump is
doing every thing that he can. But in this state
they're doing just the opposite. You know, what they're doing

(25:08):
here is similar in ways. I think it's somewhat analogous
to Well, Colorado's doing this too, but imposing all these
strict air emissions on private automobiles. Well, the ripple effect
of that is automobile manufacturers either have to comply with
it because their manufacturing lines are designed for all fifty

(25:32):
seven states, not for one state. So the more states
start adopting rules and regulations that mirror California means that
at some point the automobile manufacturers will deem it its
more economical to just comply with these regulations, so we
can sell cars in all fifty seven states. So the

(25:52):
price your car is going to skyrocket in order to
meet some you know, wet dream standard about how clean
the air should be. Now, go back from a moment
to the large producers because they can absorb the costs better.
But the smaller ones are the ones that face bankruptcy,

(26:12):
and then they face bankruptcy and they have orphan They
leave orphan wells out there because the regulations have driven
them out of business. Think about this government creates this problem. Now,
I'm not gonna say that all small oil and gas
companies are perfect. Yes, some will abandon a well, leave

(26:34):
it as an orphan well, not cap it properly, and
then go off and leave it. But when you add
on regulations where you make it impossible for them to
do that. Now the government can go out and say, oh, look,
these small producers are evil because they leave. They leave
orphan wells out there that are a danger, and they
are somewhat of a danger. They're not that big of

(26:55):
a danger, but they are a danger. Oh so now
we have to have regulations to increase the costs and
make everybody come back in and cap these wells and
fix them. They created the problem. Government created that problem. Now,
I think a lot. I haven't measured this. I started

(27:16):
digging into some of the Texas Policy Institute's information, but
some of this oil and gas production activity is indeed
migrating to less regulated states. And when you do that,
when you increase let's just say Texas or Oklahoma, when
you see that you can't feasibly and economically produce in Colorado,

(27:42):
so let's move. Let's move our production to Oklahoma or Texas. Well.
When you do that, that exports those jobs and that revenue,
including the tax revenue, to another state, and then you
end up with a state like Colorado that face is
a budget deficit. Yet the dumbass governor wants to build

(28:03):
a bridge for what was it eight million, eighteen million
dollars or something. That's how stupid we are the oil
and gat Well, hang tight, I'll tell you what the
oiling gay sector does for Colorado next. I just finished
streaming land Man and maybe we need to get Billy
Bob Thornton in the same room as Polis and straightened
things out. I'd like to watch that fight. He went

(28:27):
to gods and who walks out alive?

Speaker 1 (28:33):
The Polis has the weight advantage.

Speaker 2 (28:35):
He has the weight advantage, but he's scrappy. I mean,
he was married to Angela Joel last so I'm sure
he knows how to fight. Yeah, yeah, And he's just
he just strikes you as that kind of guy that,
you know, okay, small, kind of unassuming, you know, he's
kind of got that drawl and just kind of you knows,
smuggling cigarette. Quick punch to the throat and the next

(28:56):
thing you know, your your necks are broken and you
can't breathe. You're on the floor. All right. So, as
I explained before, all these rules have added millions per
well or facility, however you want to describe it. The

(29:18):
littling gas sector supports more than three hundred thousand jobs
and billions and wages and taxes. So all of these
restrictions are going to not could but are going to
reduce state revenue for schools and services. Now, there's some

(29:39):
analysts out there. You can go to some of the
local news channels and they'll say, oh, but there's a
net societal benefit because we have lower health and environmental costs.
I call total bs on that because nobody will quantify it.
You know why they won't quantify it because you can't
and if you do quantify it, it's so minimal that
it's not it a hypothetical five thousand job addition and

(30:06):
extraction producing a barrel of oil, a cubic foot of
natural gas that translates into nearly twenty thousand total jobs.
A five out. You know, you increase employment in production
and extraction, that correlates to twenty thousand total job increases.

(30:35):
So there you understand. If you do that in the reverse,
you understand the cost the opportunity costs of regulations. When
you start applying these regulations, as they all sat down
and agreed to behind closed doors, that's when you started

(30:56):
seeing Colorado, Oh, we're short of mind for roach bridges
and highways. We're short of money for schools, We're short
of money for you know, all the things we're supposed
to be doing. And why because you're destroying one of
the largest employers in the entire state. At the same
time that you're doing that. At the federal level, Donald Trump,

(31:17):
god bless him, is trying to take off these regulations.
And Chris Wright from Colorado understands precisely. The Secretary of
Energy understands precisely how these regulations can benefit the industry.
And with AI and everything else coming along, we need
more generation, not less generation. And you're not gonna get

(31:40):
that from wind and solar ain't gonna happen. You don't
believe me, go ask Billy Bob