This story by Allen Best appeared on BigPivots.com on November 29, 2024. We are sharing it in four parts.
Despite those remarks by Bill Ritter in August, the November elections suggest sluggishness at the federal level during the next four years of the energy transition.
Colorado has great momentum irrespective of what happens in Washington.
That’s true to a somewhat lesser extent for the emissions reduction work across the country and world. That forward movement will continue. For all his bluster in 2016, Trump did not bring back coal jobs during his four years as president.
But the election can’t help. And the nominee of President-elect Donald Trump for secretary of the Department of Energy is an oil and gas guy. Chris Wright, the nominee, grew up in Colorado and made his fortune here, most recently as a founder of Liberty Energy, which provides hydro-fracturing and other oil and gas field services in Colorado and many other places around the country and globe. Wright doesn’t deny that greenhouse gases will warm the climate but downplays the risks and emphasizes the costs of the energy transition. The energy transition does not yet exist, he argued in a Heritage Foundation forum in 2023.
Significant tensions exist within Colorado about the question of how quickly and what strategies should be used to ramp down oil and gas. So far, Colorado has trimmed at the edges but not had a head-on fight. That latter distresses some in the environmental community.
Colorado has doubled oil production since 2010, mostly a consequence of horizontal drilling, hydraulic fracturing, and many other technology improvements. It now ranks 4th in the nation in annual production of oil.
In natural gas, it’s eighth in the nation. Production has doubled since 2000, according to the Energy Information Administration.
In Aspen last summer, I asked the first question in Ritter’s Q&A: Did he agree with Gov. Jared Polis in his stance about oil and gas? My question was provoked by simple curiosity. What are the arguments for and against?
Polis so far has chosen not to pick a fight with the oil-and-gas sector. Legislation to ramp down the amount of drilling in Colorado has not gone forward in the Legislature. In exchange, the oil and gas sector has agreed not to go to the ballot with measures of their own. Some in the environmental community have said Polis deserves the “climate cow-pie award.”
Ritter, in his response, sidestepped his own argument, about the effectiveness of Amendment 37 in getting Colorado moving in 2004. He sided with the truce that Polis has engineered. We don’t want to legislate in the blunt policy of ballot amendments, he said. He was alluding to dueling efforts in the last two election cycles for ballot initiatives that were withdrawn in what amounts to a truce.
So how does Colorado move faster? What are the right tactics, the correct strategies?
Will Toor, director of the Colorado Energy Office, seized on Ritter’s description of Colorado as a beacon on the hill.
“I think it’s really true if you look at where we have headed over the last 20 years, but I think especially over the last six years,” he said.
Colorado, he added, has become “one of the handful of states that I think are really showing how you can move forward in a big way of climate action while making lives better for the people of the state.”
Toor also emphasized Colorado as an interior state. “It may be trending blue, but was red, is purplish — and a place where there’s a large oil and gas industry.”
(I find it hard to describe Colorado as a purplish state, but Toor is right if you look at November elections. Four of the nine members of the U.S. House of Representatives from Colorado will be Republicans.)
Toor described Colorado’s work on climate change as an “all-of-government approach.” It isn’t just two or three key offices; it’s all of the agencies.
And it’s not just about regulation, he went on to say.
“We need to transform the marketplace, and to do that we need to use regulation where it’s appropriate, public investment where it’s needed, incentives for the private sector and individual residences where that’s appropriate. This is a lens that Gov. Polis brings to really everything that we do in the state.”
Toor spoke to the need for actions that are politically durable over time. It seemed as if he was trying to answer my question to Ritter about the oil and gas sector. He was talking about replicating Colorado’s success in other places.
The actions must be “actions that folks will look at and say, ‘Okay, that’s something that I see as a winner. That’s something I want to do where I am,” he said.
“Sometimes we could push a little bit further, but the effect would be to create something that probably has a smaller impact, because no one else (among other states) is going to do it.”
Then he ticked off the milestones starting with the landmark legislation in 2019 that specified an economy-wide 90% reduction goal for 2050 (now updated by legislators to net-zero by 2050, with more benchmarks along the way).
Toor, director of the Colorado Energy Office, made the case that Colorado has been providing a model that can be used by other states in decarbonizing their economies.
Altogether, Colorado has had 128 different pieces of legislation in the realm of energy efficiency, electric vehicles, oil and gas reform, and reform of land use during the last six years.
Major policies have delivered broad authority to the Air Quality Control Commission to conduct regulatory work.
As did Ritter, Toor noted that utilities in 2004 worried about whether 10% renewables would crash the grid. Now, Colorado utilities altogether will achieve 84% to 87% reduction in emissions by 2030 as compared to 2005 levels. There are some worries here and there about the ability of the electricity grid to meet demands. Those concerns fall under the heading of resource adequacy. And there are some supply chain issues for renewables that are, at least in the short term, driving up costs.
The oil-and-gas industry is required to reduce emissions 60%. Going back to 2014 under Hickenlooper, rulemaking after rulemaking has pushed the industry to dramatically reduce emissions. “We now think that the actual reductions will be closer to 70% than 60% by the end of the decade.”
The industrial sector poses a greater challenge because, said Toor, the technology and economics don’t align as well for deep reductions. Colorado has a requirement of a 20% reduction by 2030, although Toor said the state thinks we’re on path to a 40% reduction because of regulatory requirements and well as significant incentives. He cited the example of heat pumps for two Fort Collins plants, that of Avago, a company in Fort Collins that specializes in developing and manufacturing semiconductor products, and the Anheuser-Busch brewery. In the case of the brewery, “the projections are for an 87% reduction in the greenhouse gas emissions from that one change.”
Moving onto buildings, Toor noted that Colorado was the first state to create a clean-heat plan requirement of natural gas utilities.
“It requires our gas utilities to reduce emissions largely by helping their customers reduce energy use,” he said. “The very first clean heat plan was just approved by our Public Utilities Commission.”
In that plan, Xcel Energy during the next three years will invest $440 million to help its customers switch from gas appliances to electric heat pumps.
In transportation, 22.1% of all new vehicle sales in Colorado were for EVs. “We were about 2.1%, so it’s gone up by a factor of 10 over the last six years, and we’re really on the trajectory that we need to be for very deep electrification and transportation.”
Toor also talked about the intersection of land use, transportation, and a clean-energy economy. Two new laws adopted this year increase state government transit investments by a factor of about 10.
Another bill reduces how much parking that developers must provide for apartment buildings. If they devote less land and cost to parking of cars, the rents of those living there can be reduced hundreds of dollars a month. This, in turn, means planning with transit in mind.
Modeling commissioned by Toor’s office and completed in early 2024 found that Colorado can achieve 95% to 97% of its electrical load from renewables with the remainder from natural gas – all while saving money.
The big push will be on renewables: tripling wind and quadrupling solar capacity. And if that is a lot of land, it’s only 1-20th the amount of land that will be devoted to exurban sprawl by 2040.
“We need to get it right, but we also need to keep it in the context that we are not talking about transforming the landscapes of Colorado with renewable energy,” he said.
Allen Best publishes the e-journal Big Pivots, which chronicles the energy transition in Colorado and beyond.