Poulson: Fracking and Colorado’s urban-rural conflict
President Barack Obama has
promised to make economic inequality the central issue in congressional
elections this year. Similarly, urban-centric activists in Colorado
have launched campaigns around economic inequality, such as higher wages
for fast food workers. Much of the debate focuses on claims of private
market failures as the major source of financial inequality in the
United States.
Colorado’s experience suggests an alternative source of inequality: an urban-rural conflict.
As state and federal policies and
regulations are increasingly dominated by urban elites, rural economies
and standards of living are increasingly being threatened and
undermined.
For example, Weld County has pursued a
pro-growth strategy with minimum regulation and low taxes, designed to
promote business investment and jobs. During the past decade, Weld has
experienced rapid growth in jobs and production, with many people moving
in.
In contrast, urban Front Range counties
have pursued so-called “smart growth” policies designed to limit
economic and population growth. During the past decade, 19,000 residents
have left Boulder County, roughly twice the number of people moving in.
Boulder now relies on 70,000 employees who commute into the county to
work, roughly the same number of employees who also live in the county.
According to census data, Boulder County enjoys a median household income of a little more than $67,000, well above Weld County’s (still healthy) median of $56,500.
Yet Boulder County’s median owner-occupied housing cost of more than
$350,000 is wildly out of proportion to Weld County’s more modest and
affordable $192,000.
The census data also shows the largest
municipalities in both Boulder and Weld counties (the city of Boulder
and Greeley, respectively) to have roughly the same population at about
100,000. While the city of Boulder’s median household income of a little
more than $56,000 is higher than Greeley’s $44,000,
Boulder’s housing costs are prohibitively high, with a median
owner-occupied price of just under $490,000, compared to Greeley’s
roughly $166,000.
In other words, urban “smart
growth” policies have essentially turned Boulder into a wealthy enclave,
with disenfranchised workers, similar to many ski towns. But Boulder’s
middle class is not disappearing. Instead, it has been displaced to Weld
and other rural counties with lower costs of living.
The urban-rural conflict has been
heightened over the issue of hydraulic fracturing, or “fracking.” In the
last election, four Front Range cities voted to ban fracking: Boulder,
Broomfield, Loveland and Fort Collins. Anti-fracking proponents promise
to take their campaign statewide.
Anti-fracking bans have been enacted in 400 cities around the country.
Anti-fracking forces (or “fractivists”)
are lobbying hard in Colorado to have severe limitations and punitive
regulations placed on fracking by the urban Democrat-controlled Colorado
Legislature, and are quite open about their desire for a ballot measure
to outright ban fracking in Colorado.
The battle also is being waged at the
federal level. Republicans have introduced separate legislation in both
houses of Congress that would limit or prohibit federal reach in states
that already regulate fracking. President Obama has promised to veto one
of the pieces of legislation: H.R. 2728.
It is easy to understand why Weld stands
at the center of Colorado’s fracking battle. Weld is the state’s
largest producer of oil and gas, with more than 21,000 wells (more than a
third of the state’s total) producing more than 10 million barrels of
oil annually. Oil and gas development accounts for a significant amount
of county’s revenues, jobs and economic growth.
But being anti-fracking is basically the
same as being anti-jobs or anti-growth. Or, put another way, being a
“fractivist” is essentially the same thing as being in favor of yet more
economic inequality.
If anti-fracking groups successfully
push a statewide ban, it would wipe out a major source of investment,
growth and jobs in rural Colorado counties while significantly raising
the cost of power for low-income city-dwellers already struggling with
the high cost of living driven by urban “smart growth” policies.
State and federal regulations that
limit hydraulic fracking will only deteriorate hard-won incomes and
standards of living throughout rural Colorado, exacerbating the economic
inequality the president and urban elites claim to be so concerned
about.
Barry Poulson is a retired University of Colorado economics professor and senior fellow in fiscal policy at the Independence Institute, a free market think tank in Denver.
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