Anadarko recently announced a new investment in upstream facilities near Erie, Colorado that will bring millions of dollars in tax and licensing revenue to the town.
According to the Denver Business Journal, Anadarko plans to drill 23 new wells on acreage the company owns just outside of Erie. Anadarko and Erie have struck a deal that intends to bring the land supporting those wells into incorporated Erie. The planned annexation of this land will enable Erie to collect fees and royalties from the site for years to come.
Anadarko — Colorado’s largest oil-and-gas producer — and the northern metro-area town of Erie struck a deal in which Anadarko will drill 23 new wells on property it owns in unincorporated Weld County and then annex the 47 acres into Erie to be part of a larger town urban renewal project.
The wells and others drilled in the area are projected to generate tens of millions in tax revenue annually, helping fund infrastructure improvements needed to transform the rural properties.
For Anadarko (NYSE: APC), the Woodlands, Texas-based oil company, the deal is like many it reaches with area towns, said Jennifer Brice, Anadarko’s spokeswoman in Colorado.
“Our teams continuously seek ways to coexist with the communities around us,” Brice said, “which can consist of condensing our operations and reducing the footprint and/or distance between our operations and developments.”
The Town of Erie has been a hotbed of anti-fracking activism for years, with groups like Erie Rising, formed in 2012, opposing oil and gas development, and home to some of the most prominent activists, as EID has previously revealed.
A report by the Boulder Daily Camera indicates that the deal could be worth up to $85 million for Erie. Most of that funding would be devoted to economic development efforts along the I-25 corridor, geared towards supporting the town’s rapidly growing population. Studies commissioned by the Erie government have shown that the town will need to invest about $96.7 million into local infrastructure projects, such as highway interchanges and expansions of utility services.
Orchestrated through its urban renewal authority, that cash influx would go toward funding the infrastructure necessary to attract developers to its stake of land along the Interstate 25 corridor, say trustees who this week approved an initial agreement with the drilling firm.
The land in question — nearly 50 acres near the intersection of I-25 and Colo. 52 — is owned by the company and already slated for more drilling.
“They’ll be paying this money anyway,” Erie Town Attorney Kendra Carberry said Friday, though without the deal “it just wouldn’t be coming to Erie.”
In addition to the annexation deal, which is poised to be completed in 2020 once Anadarko’s wells are completed, the company is also donating four acres of land to Erie’s fire department, which will likely set up a new fire station on the property.
Erie’s planned annexation deal with Anadarko is just the latest among dozens of such deals that have benefitted many local communities across Colorado and throughout the country. As the American Economic Review found in 2017, every $1 million invested in shale development results in $500,000 of increased wages, royalties, and business income for communities nearby that development.
Erie is far from the first town to see its fortunes improve thanks to investments from companies like Anadarko. Weld County (which includes much of Erie) saw its property tax revenues surge since 2013, thanks in large part to property investments made by the oil and gas industry. Hopefully, this latest deal with Erie can help spur continued investment into Colorado’s communities for years to come.
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