Traditional Energy

oil rig on Colorado prairie

In 2016, coal was used to produce 54 percent of Colorado’s electricity. And more than half of the coal produced was exported, bringing new money into the state’s economy.

Natural gas is the primary heating source for homes in Colorado and accounts for more than 20 percent of electricity production. The resource potential for natural gas, coupled with advances in extraction, have been a primary driver for Coloradans, paying 23 percent less on average for household energy costs than the national average, according to the U.S. Energy Information Administration.

While energy production provides strong economic benefits to Colorado, the extraction of fossil fuels can result in negative environmental impacts, such as the emission of greenhouse gases. Colorado encourages responsible mineral extraction by working collaboratively with industry leaders on regulations to reduce negative impacts and protect Colorado’s world-class environment.

Oil and gas development is regulated as a matter of mixed state and local concern. In 2014, Governor John Hickenlooper issued an Executive Order establishing a taskforce regarding how to most reasonably and effectively balance land use issues in a way that minimizes conflicts while protecting communities and allowing reasonable access to private mineral rights. More information on the outcome can be found on the Colorado Department of Natural Resources taskforce website.

Counties in Colorado often work directly with operators to negotiate Memorandum of Understandings (MOU) or Memorandum of Agreements (MOA) through which the parties agree on stipulations and best management practices for oil and gas development within the purview of the local authority. A searchable database maintained by the Intermountain Oil and Gas BMP Project at the University of Colorado, and funded in part by the Colorado Energy Office, identified 43 MOUs signed between 2005 and 2016. That database also can be used to search for operator best management practices.  

For more information on oil and gas production, as well as mining in Colorado, please see the Colorado Department of Natural Resources.  There you can find the Division of Reclamation Mining and Safety and the Colorado Oil and Gas Conservation Commission. More information on the air and water quality regulations for extraction of minerals can be found through the Colorado Department of Public Health and Environment.