We alluded earlier this week to a concerted effort on the part of Western Slope governments to preserve the status quo on energy severance taxes.

The idea being that the oil and gas industry is showing signs of a fragile recovery after an eight-year slide and that altering the tax structure would throw cold water on any hope of greater production in the Piceance Basin.

As the Sentinel’s Gary Harmon noted, no legislation has been introduced to boost rates, but local government officials were concerned that the idea was being kicked around at the end of the last session. The Associated Governments of Northwest Colorado initiated a working group to pencil out the implications. Their conclusion: A rate increase would yield diminishing returns for local governments, school districts and special taxing districts that depend on natural gas royalties as an important source of revenue.

Raising the rates 12 percent (a figure we’ll get to in a minute) would lift revenues from the production of Piceance gas dramatically – from $69 million to $97 million per year at current production rates.

Read more at The Grand Junction Daily Sentinel.