Colorado Focus Issue 1 – No country for oil and gas Democrats

We at Adamantine Energy had a front row seat for Colorado’s quick transition from a reliably red state with a track record of supporting oil and gas development to the state today considered perhaps the worst in North America for energy development. In this first focus issue on the opportunities to learn from Colorado’s experience, we consider what happens when a state not only becomes more Democratic, but Democrats find it nearly impossible to support oil and gas development.

(And if you think this cannot happen in your operating areas, you’ll want to check out our data-driven report looking at what Colorado’s demographic changes may foreshadow for other operating areas in North America.)

Over the last 10 years, it has become increasingly difficult for Colorado Democratic candidates for office to support (or even take a nuanced position on) oil and gas development. Some of this friction was caused by demographic and development shifts; but as an industry, we made some mission-critical mistakes. We now have an opportunity to learn from those mistakes.

Both of these things are true:

  • Across North America, oil and gas companies will have to work with left and left-leaning stakeholders effectively.
  • Left-leaning stakeholders, particularly elected representatives, are under growing pressure to oppose oil and gas development and use.

The situation:

Colorado politically has reliably been characterized as one-third Republicans, one-third Democrats, and one-third Independents. Thanks to a 150-year history of oil and gas development across several regions of the state, Colorado culture has been deeply intertwined with the resource. Ten years ago, chances were high that anyone living outside of Boulder or Aspen had a pragmatic perspective on Colorado’s oil and gas industry–regardless of their politics.

Since 2012, Colorado voters have transitioned from “leaning Republican” and “reliably Republican” to an electorate increasingly dominated by registered Democrats. Colorado’s politics are unique in a number of ways, including: nearly one-third of the electorate is registered Independent (over 1.3 million); voters can participate in either primary (but not both); and, Independents are increasingly leaning Democratic.  The figure below shows that Colorado Democrats currently have 51,000 more registered Democrats than Republicans.

Data from Colorado SOS. https://www.sos.state.co.us/pubs/elections/resultsData.html?menuheaders=5. Copyright Colorado 2020

Let’s translate these changing politics into perspectives by looking at a snapshot of Coloradans’ attitudes toward fossil and climate-related topics last year. In the figure below, you can see that a strong majority of Coloradans are now concerned about climate and support climate-related action such as a carbon tax, regulating CO2, and holding companies accountable for their effects on the climate.

Data from Yale Program on Climate Change. https://climatecommunication.yale.edu/visualizations-data/ycom-us/. Copyright 2019 Yale.

In our assessment, Colorado’s oil and gas industry missed two critical opportunities in the intervening decade:

  1. The opportunity to consistently embrace environmental regulations and sustainability, rather than rely on a Republican Senate majority to defeat bill after bill.
  2. The long window available to transcend partisan politics. Instead, the industry overwhelmingly supported Republican candidates and political priorities to the exclusion of building partisan-neutral bridges to both sides.

For the last five years, the oil and gas industry did not give Democrats enough meaningful cover to support us as demographics shifted their way. Today–given that it is both increasingly politically risky for Colorado Democrats to support industry and very few have relationships, ties, or reasons to appreciate us–why would they take the risk?

It matters because:

There are places across North America where changing demographics and public opinion will create an imperative to build bridges with a broad swath of stakeholders, including those left and left-leaning. Because we don’t necessarily know where politics will shift under our feet and quickly, we need to preemptively build bridges as a risk mitigation strategy.

It’s never too late, it just gets harder the longer you wait.

The critical mistakes companies are making:

We made them here in Colorado: pursuing a partisan strategy; giving too little in the way of environmental leadership, too late.

Seize the day.   Successful companies will:

  • Assess your company’s government-affairs strategy. Does it foster relationship-building with Democrats, Republicans, and Independents? For some companies, you may need to engage within your internal company culture on the risks of one-sided outreach.
  • Cultivate relationships with stakeholders, policy makers, and elected officials of both parties. Because of the late day in which we find ourselves, the engagement with left-leaning individuals and groups will be challenging, but the investment is necessary as part of a long-term outreach strategy.
  • Consider building longer bridges. Get to know the environmental NGOs that engage on your topics. You will find there are opportunities to work together.
  • Build these engagements over time, because particularly with a skeptical audience, building trust is the key step before educational efforts can begin. This requires showing up again and again, deliberately building and maintaining authentic relationships.
  • Once rapport and trust are established, you may conduct educational efforts on oil and gas in general, or for specific projects.

We take a broader look at these trends in our new research report, which you can check out here. Our Colorado-focus series continues next week with a look at the importance of Colorado’s growing and grown-up millennial population.

Got a different take or important insight from your Colorado experience? Reach out and let me know what you think.

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