The U.S. onshore headquarters for oil giant BP, looks like a tribute to Colorado’s massive mountain terrain and nature loving people. Aspen trees line the club room, beer taps await local craft brews, multiple stone fireplaces invite cozy discussions about ski conditions, and a 52-foot pine tree, sliced in half, serves as a conference table.
The big question is whether the state’s constituency wants the massive tribute from BP.
On Nov. 6, voters in Colorado will decide whether to limit drilling in an initiative that has drawn almost $39 million in campaign finance contributions. If passed, the proposition would cut the state’s oil output by more than half and, possibly, act as a potential blueprint for blocking development in other places.
BP moved its office from Houston weeks before the proposition hit the ballot. Colorado has been attracting drillers whose interest has been increased by production that’s climbed 10-fold since 2001. It now has a record 450,000 barrels a day in April. Along with Noble Energy Inc., Anadarko Petroleum Corp. and others, BP is now in the midst of a multimillion-dollar war over the state’s environmental future.
“The long-term impact is quite significant,” said Matt Andre, an energy analyst at S&P Global Platts. “It’s about the precedent being set, and it working its way to other states.”
The issue in question is Proposition 112, which requires that new drilling sites, processing plants and gathering lines be more than 2,500 feet from homes, schools and other “vulnerable” areas. In effect, it makes 54 percent of surface land inaccessible to producers.
If the measure passes, production could fall 55 percent by 2023, according to an S&P analysis.
Andre sees that as just a best-case scenario: “It assumes that people who can drill will drill,” he said. “But you have to imagine that some people will move to other plays.”
The stakes are extremely high. By July, Colorado surpassed Alaska to become the nation’s sixth-largest oil producer.
Politically, BP is trying to straddle both sides. While the company opposes the ballot measure, it casts itself as broadly supportive of Denver’s environmental goals.
“This is a city and a state that cares about the environment — we see ourselves as a partner in that,” said Dave Lawler, chief executive of BP’s Lower 48 unit, in an interview last month. “This is one of the many steps of how we’re transforming the company.”
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