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Colorado’s State Geologist, Dr. Vince Matthews, Is Bearish on Natural Resources Outlook

The world, the United States, and Colorado face a looming and alarming shortage of natural resources, stated Dr. Vince Matthews, the Colorado State Geologist in a joint State House and Senate briefing on Tuesday. The gloomy picture reflects competition for resources across the globe, particularly from China and India.

US may be “Big Elephant” now, but this won’t last

While the United States is still “the big elephant” with our economic engine, that dominance will not last, stated Matthews. “Economists suggest that China will pass us by 2030 and India by 2050.” China’s economy has grown an average of 10.4% this century, and India’s has grown an average of 7.9%. Those numbers compare to the United States’ growth of up to 5%, which is considered exceptional here.

Matthews compared Japan’s economic growth during its post World War II peak period to China’s recent spurt. At its highest, Japan’s economy expanded 13 times over, but China’s economy has grown 26 times over in the same amount of time.

This rapid growth is also occurring in other countries in Asia and Africa. The impact affects all minerals as well as oil and gas, said Matthews. In Colorado, mining and minerals represented $2 billion of our economy a couple of years ago. Now they represent $12 billion. These numbers include natural gas, C02, oil, molybdenum, gold, and sand and gravel. Last year, there was no uranium production in the state, but over 10,000 claims have been staked for uranium since 2007. In 2008, three new uranium mines have opened on the Western Slope. This growth reflects the price increase for uranium from $10/pound for decades to $80/$90pound.

Many critical resources have hit peak production, and are now declining

Production of numerous critical resources, including oil and gas, are reaching peak levels. Natural gas in particular is facing declining production because wells are harder to find and produce less. Much of the natural gas used in the US now comes from Canada, and its production has flattened while demand increases. Many US power plants use natural gas as their main source of electricity production, so higher costs are inevitable.

Fifty-four countries are now experiencing a decline in production, including Mexico, which has the 2nd largest oil field in the world. Mexico had a 6% decline in production last year and is expecting a 16% decline in the future. Our oil shale may be a future source of oil, but even if production occurs, it’s difficult to get oil out of the state because pipelines are full.

Coal is also being consumed at a rapid rate. China used to be able to support its coal demand without importing, but now, much of the coal from West Virginia heads to China. China is building a new power plant every 3 days, and much of this power is coal-driven. India and China now consume over half of the coal in the world.

Colorado’s coal, according to Matthews, is of excellent quality. It is “compliance coal,” which means that it is clean burning, thus in high demand. Most of our coal is shipped to 27 other states, primarily in the east.

Geothermal and renewables offer hope, but we buy equipment overseas

While China is a huge consumer of coal for electricity and other uses, it is also the most advanced in using renewables and manufacturing renewable energy products. A new power plant in the San Luis Valley uses photovoltaics from China and other panels from Germany because production of this equipment in the US is nascent. Matthews sees renewable energy manufacturing as a huge opportunity, but the US needs to commit to building this equipment rather than purchasing overseas.
Geothermal energy has enormous potential in Colorado because the state has many of the requirements to allow this energy to produce heat for buildings. Delta-Montrose geothermal pumps have huge opportunity for the state.

Molybdenum, long a source of mining strength in the state, has robustly rebounded from its downturn. The Henderson mine has added a third shift to meet demand, and the Climax mine in Leadville is reopening. With China building 300 skyscrapers in Shanghai since 1995, demand for molybdenum to mix with iron for steel is sky high. Similarly, China, which used to supply its own cement, now imports up to 22% of its annual need.

Further complicating the natural resources picture, said Matthew, is the continued purchase of US mineral and oil and gas companies by foreign corporations. Matthews believes that when push comes to shove, these companies will take care of their native countries’ resource needs first, which will place the US in a precarious position to meet manufacturing and defense needs.

US doesn’t have enough scientists in the pipeline, but lots of kids in film school

Finally, the US is failing to educate enough scientists. China has 50,000 students studying to be geologists. Our film schools are bursting. According to Matthews, investors should focus on potash over oil or gold. Its production has peaked, and it is critical for food.

Conservation Easement Tax Credit Bill Sparks Heated Debate between Ranching Advocates and Tax Dogs

Land owners will jump through more hoops when they take advantage of the Conservation Easement Tax Credit offered to protect lands for wildlife and from development. “This bill will put the nail in the coffin of those who have taken advantage of the conservancy program,” said Representative Alice Madden(D), House sponsor of HB08-1353.The conservation easement allows land owners to set aside property in exchange for a tax credit. Controversy occurred when the Internal Revenue Service began to audit tax returns of land owners who may have received inflated appraisals and thus inflated tax credits. HB08-1353 attempts to fix the conservation easement application process to prevent abuses.

Appraisers will be appraised

Appraisers will undergo much stricter oversight with this bill. They will have to provide their appraisals to the state Division of Real Estate rather than the Department of Agriculture. Additional oversight will come from a new commission to monitor the application process and from the Department of Revenue that will take in fees to pay for oversight activities.

If it involves taxes, Representative Doug Bruce(R) is the go-to attack dog

The fix does not satisfy Representative Doug Bruce(R), who stated that the program has produced a $240 million penalty to taxpayers. According to Bruce, “the government is reacting to its own bad program,” and has laid its failure “at the foot of the bogey man and bad actors.” The bill adds a $5000 application fee to cover administration costs. Bruce stated in Thursday’s House session that “the fee is paid by people in the private sector to a program where we’re giving them $80 million in taxes but they have to pay $5000 to get it.”

Bruce also complained about the administrative costs which would add just over10 FTEs in two years and carry a $200,000 technology price tag. “With only 232 land owners entering the program last year, that amounts to $900 per file.”

Conservation and ranching advocates snap back with teeth bared

As often happens with Representative Bruce’s critique, the other side reacted forcefully. Representative Kathleen Curry(D) rejected Bruce’s claim that the program was for rich people. “Ag producers in the Gunnison Valley who have participated in the program are not people who have gotten rich raising cattle in the Valley. They want to produce food for the nation. This bill is not for rich people in Crested Butte, but for ranchers who want to make a living and keep land open for wild life.”

Bruce noted that the average tax credit has been $250,000, “a quarter million dollar average benefit for participants in the program.” He also noted that the conservancy easement is permanent, and it assumes “we’re wise enough to know how this land should be used 500 years from now. We’re doing it forever because government knows best.” He further added that it was not unconstitutional to toss the original law.

Representative Madden retorted, “Representative Bruce knows more about the constitution than the rest of us put together, but I usually ask Legal Council for an opinion and they told us that we needed a vote of the people (to remove the law) and I’m going with them because they’re non partisan and don’t blame Democrats for everything that happens in the capitol.” She then quipped, “We get Bruced everyday, and I’m getting a little tired of it.”

According to the Secretary of State’s site on lobbying, farming interests and conservation interests both support the bill. The bill passed its 2nd reading.

38 House members give Rep. Doug Bruce a stick in the eye with sales tax bill

Communities across the state can raise their sales taxes above the state’s 6.9% statutory limit with passage of SB08-128. Over the vociferous protest of Representative Doug Bruce(R), the author of the Taxpayers’ Bill of Rights, SB08-128 eliminating the state’s sales tax cap passed the House of Representatives 38-26 Tuesday.

Sales tax bill violates the Taxpayer Bill of Rights, says Bruce

“This bill violates the constitution and the taxpayer bill of rights,” exclaimed Bruce. “It’s an absolute limit that has been in the constitution since before the taxpayer bill of rights was passed. To go from the current limit to no limit requires state voter approval – local people do not get to change state law.” Bruce insinuated that legislators who voted for the bill were not taking the state constitution seriously. “Do you want to be on record as supporting unlimited local sales taxes? Do you want to be on record as saying we will not honor the will of the voters in passing the tax payer bill of rights?”

Rep. Bob Gardner points to conflicting policies and goals

Representative Bob Gardner(R) did not appreciate Bruce’s tone or insinuation. “I resent the implication that anyone in this Chamber votes on anything unseriously. I do not question your <Bruce’s> commitment to your oath or to the constitution. What this bill does is bring in direct confrontation with each other some very important policies. It is not easy and I will not trivialize anyone’s decisions.”

Representative Gardner, along with Representative Kathleen Curry(D), noted that local governments had approached the House Local Government Committee on numerous occasions to request approval to bring a sales tax increase to their voters. SB08-128 allows local governments to have sales tax elections without coming to the state house first. Home rule cities such as Denver and Pueblo already have this ability, so the bill equalizes who can bring sales tax requests to voters without legislative approval.

Representative Gardner stated that the bill brings into conflict what individuals believe about the growth of government and taxation and who should make the decision. “It is the right of citizens in their communities to make these decisions, and I believe in local decisions. The legislature should get out of the business of dealing with numerous requests to raise taxes.”

Representative Curry added, “This is a simple bill – what is the role of this body – and shouldn’t local governments be able to make their own decisions about how much tax to levy. Local governments should be able to make their own decisions.”

Don’t words mean anything anymore?

Representative Bruce countered that “Words have to mean something – you can’t just take your affection for local government and ignore that words have meaning. You didn’t take an oath to obey only those sentences in the constitution that you like. This is plain English, and it’s at the junior high school level.”

Cities have to keep up with rising fuel costs

Representative Dorothy Butcher(D) was clearly annoyed with Bruce’s arguments. “I’m not sure what century you’re in,” she said, referring to Bruce. “But let me tell you how much diesel fuel costs today – up to $4 a gallon – and that’s what cities and counties have to pay to get their trucks out onto the roads. This bill gives jurisdictions the same rights as home rule districts have to raise their taxes. These jurisdictions don’t come to us irresponsibly to ask for more money. They come to get the funds they need to run their governments.”

Bill passage means huge change in state policy

Representative Kevin Lundberg(R) reminded his colleagues that this bill means “a big change in policy. It’s a statement that we will take the lid off the limitation on government that has been a part of the state for many, many years. As to the argument that the governments need this money to meet the cost of living, so do the people of Colorado.”

Pro Life Picketers Must Reduce Bloody Fetus Signs and Keep Moving with SB08-192

Pro Life advocates picketing residential neighborhoods, who have thrown fetus dolls onto neighborhood yards and sent threatening letters, will have to reduce the size of their mutilated fetus picket signs if SB08-192 gets through the House of Representatives. The bill, already passed by the Senate, cleared its first hurdle in the House when the Judiciary Committee, after substantive debate on 1^st amendment and privacy rights, came down for privacy in your own home.

Bill highlights tension between 1st amendment and personal privacy

Representative Amy Stephens(R) stated that this bill is the most difficult for her in this session because of the tension between protecting the 1^st amendment and ensuring peace and safety in your residence. Representative Terrance Carroll(D), who initially intended to oppose the bill, cited Justice Sandra O’Connor in changing his mind: “That we are often captive to objectionable speech outside of the privacy of our homes doesn’t mean that we should be captive everywhere.”

Bill provides relief for neighbors suffering constant harassment

The bill provides relief for neighborhood residents who have been subject to extensive picketing against other neighbors who are involved in pro choice issues for one reason or another. One neighbor testified that he lived next door to an executive of a construction company that was building a new Planned Parenthood clinic in Denver. The whole neighborhood has been subjected to images of bloody, mutilated fetuses on huge signs, murder vans driving through the neighborhood, threatening letters, and fetus dolls tossed onto front yards.

Colorado Right to Life wants 4 x 6 signs

Bob Enyart, board member of Colorado Right to Life, stated that a rogue picketer was responsible for the letters and the fetus dolls and that his group supports the bill if the size for picket signs is set at 4 feet x 6 feet. The bill sets sign size at 2 feet x 3 feet. An amendment allowing more flexible sign size was defeated. Colorado Right to Life wants the 4×6 sign size because that is standard in picketing across the country.

Representative Claire Levy(D), who sponsored the amendment to allow larger sign size, stated that if picketing is allowed, then based on the 1^st amendment, signs need to be large enough to communicate the message. According to the bill, people must also carry the signs while in continuous movement; people may not sit in lawn chairs and hold signs as they have done at some picketing sites.

Neighbors feel under attack

Probably the strongest argument in favor of the bill came from neighbors who talked about their young children having to face offensive signs and language. Picketers confronted parents and their children as they attempted to get into their cars or do work on their homes. The “murder vans” would drive around the neighborhood.

Representative Stephens asked Peg Ackerman, speaking for the County Sheriffs, if this picketing resembled domestic violence in its intensity and danger. Ms.Ackerman responded, “These situations are extremely emotionally charged with people getting into heated arguments. It’s definitely a problem for the participants in the argument but also for law enforcement.”

Right to Life argued that much of the trouble in these situations should be handled by enforcing local ordinances against trespassing. Neighbors who testified replied that sheriffs are reluctant to enforce trespassing because of 1^st amendment issues. City Councils are reluctant to pass ordinances prohibiting these types of picketing because of the cost of litigating the cases.

Privacy sentiment sways legislators

Representative Stephens summed up the sentiment of legislators on the Judiciary Committee: “I’m moved by the neighbors and what they’ve gone through. I don’t care what the issue is – abortion or war. I think we have an interest in ensuring that residents have a right to enjoy their residences.” Representative Steve King(R) reinforced the view: “If we don’t protect innocent non combatants from being terrorized, then we shouldn’t be here.”

The bill passed the Judiciary Committee unanimously.

Should the State Legislature Tell the Judiciary How to Set Bail?

A bill to set bail at $50,000 for persons accused of drunk driving and eluding police in a vehicle, in the same incident, is a test of the House’s commitment to the constitution’s separation of powers, according to Representatives Morgan Carroll(D) and Doug Bruce(R). HB08-1377, sponsored by Representative Steve King(R) and Senator Josh Penry(R), tells judges to set the $50,000 bail bond, although the bill was amended to also tell judges to use their discretion in these cases.

Judicial Discretion at Stake

Representative Bruce attacked the “judiciary discretion” amendment for its inconsequentiality.  “We look like we’re being tough without actually being tough…We can all engage in posturing about showing how tough we are on driving under the influence cases-all this is going to do is punish someone before trial because he’ll be locked up before trial… We’re disregarding the presumption of innocence and disregarding the purpose of bail, which is to guarantee that people will show up for a trial.”

Drunk Drivers Eluding Police Like Suicide Bombers

Representative Ellen Roberts(R) countered that a person driving drunk and eluding police is “equivalent to a suicide bomber.”  She stated that the $50,000 bond is only for the most egregious cases in which persons combine drunk driving and eluding police. Representative King(R) added that the legislature’s intent with the bill is not to tell the judiciary what to do, but to send a message that this is a priority with the potential for saving lives and injury.

The bill arose when two Mesa College students were killed by a drunk driver eluding police.  The driver had a prior arrest for drunk driving, ramming a police car, ramming a sheriff’s car, and punching a law enforcement officer.  The judge set bail at $15,000 in the case, which the defendant put up using his credit card.  The second incident then occurred.

Slippery Slope for Separation of Powers

Representative Morgan Carroll stated that for the legislature to jump into this case would “start us on a slippery slope of putting arbitrary bond amounts in statute.  It would usurp the separation of powers by one size fits all.”  She believes that such a step would “really mess up the structural set up of our statutes by taking away the discretion of the one person who knows most about the factors in a case- the judge.”  Representative Claire Levy(D) reiterated that “it’s the job of a judge to set bail.  In this bill, we’ve set two offenses for special treatment. What about other crimes in which the defendant presents a threat to safety.  Will the legislature pick a number and take discretion away from the judge in those cases?”

Statewide Bail Bond Schedule Would Help Judiciary

Representative King stated that he would like the State Supreme Court to come up with a statewide bond schedule so judges “can look at that and make an appropriate judgment about what a bail bond should be.”

Legislature Should Not Make Laws Based on Single Incidents

Majority Leader Terrance Carroll replied that this bill “puts the Legislature in the position of second guessing the decision of a single judge in a single county on a single incident.” He questioned whether it was appropriate for the Legislature to pass a bill because of its disagreement with a single judge’s use of judicial discretion.  “This bill really strikes at the heart of judicial discretion.”

E.B. White, intrepid chronicler of the life of pigs in Charlotte’s Web, would applaud the passing of SB202 in the House Ag Committee on Wednesday. The bill, sponsored by Representative Kathleen Curry(D) and Senator Jim Isgar(D), gives pregnant sows a group housing set up, allowing them room to live comfortably with their piglets. Veal calves are provided housing in which they can stand, lay down, and turn around without touching their living quarters.

Pork Producers worked with the State Department of Agriculture to craft a bill responsive to consumer demand for better treatment of their animals. Even so, the bill gives producers ten years to transition from an individual stall system for sows to a communal housing environment. The Colorado Pork Producers Council stated that “we see from consumer direction that this is required. It has been a group effort and a long deliberative process to create this bill. It will require extensive training to get employees to deal with sows in a group housing system.”

Jose Rojas, a pork producer from Otis, CO with 30,000 sows, stated that the “issue of sow housing is not unusual for me. In December, ’07, Pork Producers announced a voluntary phase out of individual gestation stalls for pregnant sows.”

Veal calves have traditionally been tethered in their stalls, not allowed to move up or down or around. With SB08-202, veal calves will be given enough room to stand or lie down and turn around. Representative Wes McKinley asked if the bill would cover calves that are not veal calves. The Colorado Farm Bureau responded that while the bill doesn’t cover non-veal calves, those animals are generally kept with their mothers and are not subject to the same housing environment as veal calves.

Jerry Wilkins of the Colorado Egg Producers stated that his organization is looking at ways to house hens more comfortably. His group is responding to consumer demand as well. Egg producers have now put together an advisory committee to look at best management practices for housing hens based on “good science.”

Representative Buffie McFayden(D) confirmed consumer pressure to give comfortable living conditions for sows and calves. “I would rather have this change as a statute than a constitutional change.”

School districts across the state will develop safety plans consistent with the federal government’s National Incident Management System to ensure that all first responders at all schools know what to do in emergencies.  SB08-181, sponsored by Representative Tom Massey(R) and Senator Tom Wiens(R), addresses many of the problems confronted by Columbine and Platte Canyon High School staff when those schools faced extreme situations including murder of school children.

National Incident Management System

The National Incident Management System (NIMS) establishes a platform for emergency response that government agencies across the country use to ensure, as Representative Massey stated, “that all first responders are on the same page in these situations.”  NIMS includes training, education, communication processes, equipment, and personnel.  The system focuses on preparing fire, police, and emergency medical personnel for their roles in school emergencies.  It also will support school staff training to provide the ultimate first responders, the people in schools, with the tools they need for effective emergency management.

How will schools implement the program?

The bill allows schools up to ten years to get all their staffs trained and to develop their plans in concert with fire, police, and emergency medical teams.  According to Dale McCall of the Colorado BOCES Association, rural schools will particularly benefit from the process.  “At first I was against this bill because I didn’t know how rural schools could ever achieve compliance.  But this bill will help these schools move forward on these issues.  I see the bill as a resource for rural school districts.”

Peg Ackerman of the County Sheriffs of Colorado reiterated that “it’s very important that everyone operate from the same system.  Sheriffs want everyone to operate from the same guidebook.”

Initial controversy over compliance timeline

The bill initially faced problems because school districts were concerned that they could not comply with NIMS and other requirements.  But according  to Representative Massey, the bill will enable school districts to garner grants and other financial support to fulfill the bill’s goals.  “Community colleges can provide courses for NIMS,” said Massey, and federal Homeland Security grants will be easier to get because of the bill’s support for consistent emergency measures.  Amendments to the original bill enabled small, underfunded school districts to support the bill.

The bill received unanimous approval from the House Education Committee and will move to Appropriations.

Senate Republicans jumped out of the shoot fast on HB08-1375, the appropriations “Long Bill,” attacking Senate Democrats and Governor Ritter for a budget they claim doesn’t account for the inevitable “Ritter Recession.” Senator Moe Keller(D) and Senator John Morse(D) quickly countered that no one person has created a recession, and today’s economic environment has resulted from reckless spending led by federal Republicans under President George W. Bush’s administration.

After the first 30 minutes of the budget battle, Senator Jennifer Veiga(D), in the president’s chair, commented that at the rate they were going, the budget debate would take 14 hours, and everyone needed to get on with it. The State Senate galloped onward.

The first amendment to the State’s “Long Bill” offered by Republicans tried to move $1million from a prison “flexibility fund” to a “rainy day fund” to protect against the inevitable “Ritter recession.” That went down. The Republican’s next amendment would take money from a program to reduce recidivism by parolees to put into the same rainy day fund. That also went down. The third amendment, offered by Senator Sue Windels(D) to put money back into the State Board of Education’s travel funds, was trashed by outraged Republicans based on press reports of excess travel spending by Education Board members. Senator Windels reminded her colleagues that Board of Education members are not paid for the job and have travel responsibilities for meetings they need to attend around the state. That amendment went no where too.

And so it progressed through the day. The budget was finally passed 23-11, with McNulty, Cadman, Penry, Spence, Harvey, Wiens, Ward, Renfroe, Mitchell, Brophy, and Kopp, all Republicans, voting NO.