Royalty and aristocracy were expert and exercising arbitrary power, disconnected from any sort of economic or social reality. The whole argument over shale oil exploration out west smacks of this. But while the Bush Administration has bolloxed its handling of the problem, the Colorado Democrats' response is just plain irresponsible.
One of the main obstructions to shale oil development was the lack of a regulatory regime, and a major part of that regime was the royalty rate that companies would have to pay for their leases. The Administration has proposed a rate that starts at 5% and climbs to 12.5%.
Now, the Democrats are half-right when they say:
"A rate of 12 percent might be too high, but it also may end up being too low," [director of Colorado's Department of Natural Resources Harris] Sherman said."Setting a royalty rate without knowing the cost of production makes no sense."
The half- part is that it's not the cost of production at issue, but the profit margin.
But then, how can Salazar know that, "it [is] a 'pittance' that would short Colorado by billions of dollars?"
[Sen.] Salazar's brother, Democratic Rep. John Salazar, was also critical, saying water, energy and the impact of shale development on Colorado towns remain unresolved.Harris Sherman, director of the Colorado Department of Natural Resources, said it was "irresponsible" to move ahead before officials have a better idea of which technologies will work and what the likely impact will be on towns, air, water and land.
No kidding. Because Sen. Salazar and Governor Ritter have done everything in their power to prevent even experimental exploration and production on the land here.
Their complaining about putting the cart before the horse would be funny if they weren't trying to force you back into using them.
In the meantime, the Post not only ignores that irony, but also lets their complaints about water usage go unchallenged. We currently let about 1 million acre-feet of water leave the state, or about 22% of our supply in a normal year. And Colorado's oil shale actually traps considerable amounts of water that could be captured during the oil recovery process. Ignoring these facts reinforces the image of western Colorado as a bone-dry wasteland, except for peach orchards.
