Colorado Oil Industry Struggles Despite High Prices

Colorado's oil and gas industry is struggling despite high oil prices, contradicting Governor Jared Polis' (D) claim in his January state of the state address that it was thriving. Since the passage of SB19-181 in 2019, which redefined the mission of the state oil and gas commission from fostering development to regulating it, Colorado's oil production has not recovered from its peak at 577,000 barrels per day in November 2019.

The permitting timeline in Colorado is a significant contributor to this issue, with operators facing wait times of up to 250 days. In comparison, Texas requires a turnaround time of just 30 days and averages only two days for permit approval. This discrepancy has led to a decrease in well starts, with only 704 wells initiated in 2025, down from 4,470 in 2008.

The ECMC website tracks annual well starts by county since 2000. According to the data, prior to SB19-181, Colorado drilling rebounded after every downturn. However, since 2019, there has only been one substantial rebound, a 41 percent increase in 2022 when Colorado crude averaged $92.

The increasing costs of complying with SB19-181 have favored companies large enough to absorb them, leading to the consolidation of major operators. In 2023, all nine major Denver-Julesburg Basin operators were absorbed into Chevron, Civitas, and Occidental, which made up almost three-quarters of Denver-Julesburg Basin production in 2024.