As the steep spike in gas prices continue to be felt across Colorado, we're investigative what's driving up costs locally.
For clarity and context on the issue, News 5 turned to the CEO of Colorado's Oil and Gas Association (COGA) for answers.
If you've filled up at the pump this week, you've probably noticed prices are soaring and there's no signs of them dropping anytime soon.
Tuesday, the Biden Administration announced a ban on Russian oil.
News 5 asked, "What percentage of oil is actually imported to Colorado from Russia?"
"I don't know if any of that oil is necessary imported into Colorado," Colorado Oil and Gas Association President and CEO Dan Haley said. "I do know the United States gets something like 3-percent of its imports from Russia---and that's of crude oil."
We wanted to know: How is banning 3-percent of the nation's crude oil supply from reaching the U.S. resulted in gas prices jumping 40-50 cents in a week?
"What you're seeing is a supply problem and we've had a developing supply problem globally for the last several months," Haley explained.
Haley says gas prices were already rising prior to the Russia-Ukraine War---which we found to be true.
In fact, four months ago, gas was under $3 a gallon in most of the state.
As the pandemic winds down, people have started traveling more and demand for gas has increased quicker than the supply.
That's the first problem, according to Haley.
The second problem is that there's a lot of uncertainty with what's going on overseas and that has rattled the market everywhere—-much like the impact we're seeing with the U.S. stock market.
"Those are disruptions in the global supply chain," he said.
News 5 asked, "Where does the majority of oil in Colorado come from?"
"About 90 percent of the oil developed in Colorado comes from Weld County," Haley said. "Underneath the Western Slope are the second largest natural gas reserves in the country and we would love to be able to develop that gas."
He says recent Colorado legislation has slowed permitting and oil drilling in our state. Even if regulations or legislation were to change, it's not an overnight fix.
As federal lawmakers have brought up the possibility of temporarily suspending the nationwide gas tax to save drivers a few bucks at the pump, it's important to note that Colorado taxes drivers pay 22 cents for every gallon of gas they put into their car.
News 5 asked, "Have their been any conversations in Colorado to temporarily suspend the state tax on gas to help provide some relief?"
"I have not been privy to any conversations like that," Haley said.
In the end---is there a long term solution?
"There's a lot of people who say we need to turn to renewable energy and that can certainly be part of the solution," Haley said. "However, we know we're going to rely on oil and natural gas through 2050 and beyond. So where do you want to get that oil and gas from? Do you want to get it from Russia, Saudi Arabia or Venezuela? Or, do you want to get it from local workers under tough environmental standards here in Colorado and the United States? That's the conversation we need to have as a country and now is the time to have it."
Just last year, Gov. Jared Polis signed a transportation bill into law---implementing an additional 2 cents per gallon fee on top of current state and federal taxes.
The fee was set to take effect this summer and the extra money collected is supposed to go toward improving roads, bridges and bike paths in our state.
Polis has since requested that fee be placed on hold as gas prices rise.
A press secretary for Polis also released the following statement regarding the topic of gas prices and oil drilling:
Colorado consistently ranks among the top seven states for energy production. There are over 2,600 oil and gas permits issued but not drilled yet in Colorado and they are ready to go. The Governor is also supportive of cutting red tape including the work of the COGCC to speed up the review process through a preferred operator program to ensure best practices are used as well as a comprehensive site permitting that allows for expedited processes while also protecting health and safety.
It's important to note that Polis signed a letter Tuesday with other governors across the country. This letter asks congress to temporarily suspend the federal gas tax.
We did not receive an answer regarding our question about possibly suspending state taxes on gas.
Have a story for News 5 Investigates? Email us: Eric.Ross@KOAA.com
