Severance tax battle heats up

Foes of hike tied to civil rights group backed by industry

Todd Hartman and Gargi Chakrabarty

Thursday, May 1, 2008

Claims that a proposal to raise more state revenues from oil and gas drilling would hurt poor families are coming from a group tied to a conservative black civil rights organization that has received energy industry money.

Colorado Consumers for Affordable Energy was launched by Rob Fairbank, a former Republican lawmaker from Littleton, with help from the Congress of Racial Equality, a national group that disputes global warming and has received $275,000 from ExxonMobil since 1998, records and news reports show.

Colorado Consumers chairman Bishop Phillip Porter, of the All Nations Pentecostal Church of God in Christ in Aurora, issued a letter Wednesday headlined "Stop The Ritter Gas Tax."

The letter argues that a ballot initiative that Gov. Bill Ritter wants to go to voters in November would lead to higher gasoline and natural gas prices.

"Apparently, they don't think we pay enough for our gasoline and home heating bills now," the letter said. "They think we can and should pay a little more. Maybe a lot more."

Dan Hopkins, spokesman for former Gov. Bill Owens, will act as the industry campaign's voice to defeat the ballot initiative, said a spokeswoman for the Colorado Oil & Gas Association. Veteran political consultant Rick Reiter, who led the campaign to pass Referendum C, also has signed on.

The ballot initiative would do away with a state credit that saves oil and gas companies about $200 million a year in severance taxes that would otherwise go into state coffers. The money generated by the change would help communities affected by the state's energy boom, pay for college scholarships, and aid water and wildlife projects.

Letter called misleading

Ritter spokesman Evan Dreyer called Porter's letter "extremely misleading" and said "not one drop of the natural gas produced in Colorado ends up in anyone's gas tank."

Dreyer said the proposal would do away with a "decades-old special tax credit that has long outlived its usefulness."

"No other state provides the oil and gas industry a credit of this magnitude," Dreyer said.

The Porter letter amounts to the first blast in a rugged campaign, with insiders predicting the oil and gas industry could shell out $15 million to $20 million to defeat the initiative.

Energy companies succeeded in a similar campaign to kill a severance tax hike in California in 2006, spending about $90 million compared with $60 million spent by the measure's backers.

The Colorado Consumers group launched radio commercials earlier this spring attacking ongoing efforts to toughen environmental rules being developed by state regulators responding to concerns about the energy industry's impacts on public health, land and wildlife.

"It's a consumer group that focuses its message primarily on the impacts of rules and regulations and initiatives and laws, and the impacts of those on the retail cost of energy," said Fairbank, who launched the group and traveled to New York to seek support from the Congress of Racial Equality. CORE leaders, in turn, connected Fairbank with Porter.

Group mum on donors

Porter has been associated with conservative causes locally, including backing a constitutional amendment defining marriage as being between one man and one woman, passed by voters in 2006.

He is also a former chairman of the board of the Promise Keepers, a national Christian men's group based in Denver, and spoke out in favor of conservative Supreme Court nominee Samuel Alito.

Fairbank and Porter said that the Colorado Consumers organization isn't required to reveal its donors.

CORE's spokesman Niger Innis said that his group has provided no financial support to Colorado Consumers but has worked with Bishop Porter on social issues over the past year.

The group's assertion that raising more tax revenues from gas and oil drilling would push up energy prices for consumers was questioned, given the complex nature of fuel markets.

"There is no linear relation between taxes paid by oil and gas companies and prices of natural gas," said Lakshman D. Guruswamy, director of the University of Colorado's Center for Energy & Environmental Security. "Also, the introduction of a tax does not mean higher prices for consumers, because producers have to take into account what consumers would tolerate."