A Boulder company that counts oil and gas operators among its customers and cited Lafayette’s ballot measure to prohibit fracking as a major reason behind its decision not to relocate to that city has opened a new office in Louisville.
XetaWave, a maker of long-range radios and wireless technology platforms, began its expansion into a 17,000-square-foot building in the Colorado Technology Center over the weekend.
Founder and CEO Jonathan Sawyer said the Lafayette Community Rights Act, which was passed by voters in November and bans all new oil and gas drilling within city limits, puts a business like his in questionable legal territory.
XetaWave provides radios to oil and gas operators that can relay information about operational aspects at remote sites, such as condensation tank levels or flow rates at the well.
Because the charter amendment states that it is illegal in Lafayette to “engage in the creation of fossil fuel, nuclear or other non-sustainable energy production and delivery infrastructures,” Sawyer said it’s not clear to him if a company like XetaWave could be prosecuted even if it doesn’t extract energy itself.
“My read of it is that we sell into the oil and gas industry and our equipment is used in the infrastructure of fracking,” he said. “The way the ordinance reads is that it doesn’t matter where the fracking infrastructure is.”
Sawyer said when he asked David Williamson, the city attorney in Lafayette, whether XetaWave could get into trouble per the language of the act, he was given no assurances that it wouldn’t.
“If the city attorney cannot assure me that I am not in violation of an ordinance in the city of Lafayette, that tells me there is a substantial risk that I, my employees or my company could be prosecuted,” Sawyer said. “That’s pretty much a showstopper.”
It came down to a basic business decision of going where uncertainty was minimal.
“Erring on the side of caution is a big thing here,” Sawyer said. “You don’t want to be the test case that goes to court.”
East Boulder County United’s Cliff Willmeng, who led the effort to get the Lafayette Community Rights Act on to the ballot, said the fears being expressed by XetaWave are unfounded.
“The Community Rights Act is very specific in that it only prohibits the extraction of oil and gas, the disposal of associated wastes and the immediate infrastructure associated with the oil and gas industry,” he said. “The spirit of the amendment rests in the protection of public health and safety, and any business that does not threaten that safety is not considered by the language of the act.”
Opponents of fracking, formally known as hydraulic fracturing, contend that the practice of injecting water, sand and chemicals underground to crack rock and free deposits of oil and gas can contaminate the air and water.
The industry says the practice has been used safely for decades.
The issue has become more contentious as drilling operations have moved closer to populated areas in the wake of massive oil and gas discoveries in Colorado.
Lafayette was one of three cities on the Front Range to pass anti-fracking measures last fall. But Lafayette’s all-out ban on new oil and gas drilling went further than its neighbors — Boulder and Fort Collins — which imposed five-year moratoriums on fracking.
Broomfield voters also narrowly passed a five-year fracking ban in November, but the election results have been challenged and a judge has disallowed the final numbers to be certified until the dispute is resolved.
Language of act criticized
Lafayette’s measure, Question 300, came under attack a couple of times during the election campaign last year, with a spokesman for the Colorado Oil and Gas Association warning in August that the “confusing” language in the measure “could stop the transportation of all natural gas through pipes, which means disallowing natural gas to your homes.”
A couple of months later, the Lafayette City Council passed a resolution urging voters not to support Question 300 because, among several reasons, the “city will also be detrimentally affected by the loss of businesses that refuse to locate in Lafayette as a result of the uncertainties surrounding the enforcement of the charter amendment.”
Williamson said it’s not clear what voters specifically meant when they voted 60 percent to 40 percent to pass the measure.
“Did the voters intend to preclude a business like (XetaWave) under the charter amendment?” he said. “It’s a difficult question.”
Williamson said that question likely will be resolved in court, but in the meantime, he has not heard of any other companies deciding against coming to the city because of the charter amendment.
Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce, said it shouldn’t be a surprise that a measure like Lafayette’s could make the city seem less business-friendly than other places.
“Any time you create greater uncertainty for companies, you create more unpredictability about whether they can locate there,” she said. “We’re still trying to put Coloradans back to work and anything that doesn’t help that is unfair to every Coloradan.”
The Colorado Oil and Gas Association has filed suit against Lafayette, challenging the city’s power to preclude state authority by regulating drilling activity at the local level. The council last week hired outside attorneys to help defend the city against the lawsuit.
“Current council is focused on getting this lawsuit in front of a judge so there will be greater clarity concerning home-rule municipalities and our ability to ban industrial activity within our city limits,” Lafayette Mayor Christine Berg said when asked for comment on the situation.
Meanwhile, Sawyer is happy to finally leave the 4,000-square-foot space XetaWave has occupied on Valtec Lane in Boulder for the past three years. The company employs 23 people and landed a $7 million round of funding last fall.
“We’re going to be having our first million-dollar month,” he said.
And Sawyer, who years ago helped found Louisville-based Inovonics and Boulder-based FreeWave Technologies, said it only made sense to open up its new facility in a place that didn’t have anti-fracking language as part of its charter.
“Do I want to be in a community where my customers are cast as criminals?” he said.
Contact Camera Staff Writer John Aguilar at 303-473-1389, firstname.lastname@example.org or twitter.com/abuvthefold. ___