March 17, 2010 06:36 PM UTC

Natural Gas "Grand Bargain" Reaps Political Dividends

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• by: Colorado Pols

If you haven’t been paying attention to Colorado House Bill 1365, the product of a deal between the state and Xcel Energy to refit hundreds of megawatts of coal-fired electricity generation along the Front Range to Western Slope natural gas, you should–this is one of the biggest political game-changers that Colorado has seen in at least several years, and the full implications are still making themselves apparent. As the Durango Herald reports:

Rep. Ellen Roberts and Sen. Bruce Whitehead – rivals in the state’s hottest Senate race – will cooperate on an attempt to replace coal power plants with natural gas.

It promises to be one of the biggest bills of the year.

Coal miners hate it, but many other interests love it, including the state’s largest utility, the natural-gas industry, environmentalists and most of the Legislature’s Republicans and Democrats.

The bill also marks the first tangible result of a new strategy by the natural-gas industry.

Instead of fighting environmentalists, companies are using clean-air laws to open the lucrative electricity market to natural gas.

Gov. Bill Ritter called House Bill 13[65] “a very big deal.” His biggest critic, Senate Minority Leader Josh Penry, said it could be a “game-changer” for the natural-gas industry…

Environmentalists were jubilant.

“This is one of the most important and consequential pieces of legislation that we’ve had the pleasure of working on,” said Pam Kiely of Environment Colorado. “We have in Colorado really stepped out on a limb. We are talking about fundamentally changing how we power our future.”

It really is that big, folks. Politically, this plan yields benefits for everyone involved: after over a year of endless (and bogus) protestations that the new rules governing oil and gas drilling were ‘killing the industry,’ a large new market for locally-produced natural gas will be created, substantially taking a whole set of electioneering claims off the table. There’s an argument to be made that Democratic gubernatorial candidate John Hickenlooper was already in the process of doing just that; but now the job is easier, and the energy industry has even less incentive to wage war. It’s a huge face-saving legacy builder for Josh Penry, too, as he figures out what to do with himself when his Senate term ends.

The Herald goes on to report that this agreement between the state and Xcel was a year in the making. Bringing opposing parties together on this kind of scale is something we can only remember happening once or twice in recent years, and word is that some of Colorado’s foremost political powerbrokers, like Hogan & Hartson’s Ted Trimpa, were instrumental in moving this from discussion to the cutting of a deal.

So–we’re well and truly done now with the “Colorado is at rock bottom” nonsense, right?