Ritter’s raid on Roan revenue rankles foe

Colo. Governor Bill Ritter greets the crowd of Mesa County Democrats before speaking about his plan for Colorado at the Pipe Trades Education center, 3168 Pipe Ct.,  on Saturday.

When Gov. Bill Ritter decided this month to use $14.3 million in Roan Plateau oil and gas lease revenue to help balance the state budget, it meant money no longer would be available to possibly help resolve litigation challenging those leases.

To state Sen. Josh Penry, R-Grand Junction, Ritter’s move closed the door on negotiations aimed at settling the lawsuit.

“The way I see it, it sort of renders moot any of those conversations,” said Penry, who supported the leasing of the Roan.

But Ritter and others believe there likely would be flexibility in how companies are reimbursed for certain lease payments if it came to that, and what would be required of a fiscally constrained state.

“Colorado’s not going to have to write a check here,” said Michael Freeman, an attorney helping represent conservation groups challenging the Roan leases.

Those leases last year netted nearly $114 million, with the state receiving almost half and the federal government the rest. Conservation groups are talking with the federal government and companies that own the leases in hopes of reaching a lawsuit settlement.

Under 2008 legislation, the state’s Roan money was split in half and placed in what were to be funds for higher education and local governments.

However, Ritter and the Legislature already have diverted the education funds to help balance the budget. This spring, Western Slope lawmakers who were worried about additional diversions passed legislation that will provide $17 million in Roan and other federal mineral lease revenue for projects in energy-
affected communities.

But Penry and the Colorado Municipal League say that at the time, the Ritter administration refused to release for use the $14.3 million in Roan revenue it is now diverting to the state’s general fund. They say the administration worried then that the money would be needed to help resolve the lawsuit.

But Freeman said other approaches can be taken, such as the federal government crediting companies against future royalties on other drilling and withholding future drilling-related distributions to the state.

Ritter said recently if the court requires Colorado to pay back lease revenue, the state would do so over time. But it’s more likely future federal distributions would be withheld from the state.

Penry, a gubernatorial candidate who has opposed the raids on the funds established by lease revenue, says the irony is that “folks in Denver” are eager to spend oil and gas money even as they oppose drilling, including on the Roan.

Said Ritter, “I think I was right in the beginning. We should not have leased the Roan all at once.”


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