By Liz Hampton and Nichola Groom
Nov 7 (Reuters) - Voters in Colorado, Arizona and Washington states rejected ballot initiatives that sought to curb fossil fuels use by restricting drilling, putting a fee on carbon emissions and mandating wider use of renewable energy.
The results were a setback for green activists, but a win for the energy industry and the Trump administration, which has sought to unfetter oil, gas, and coal production by rolling back environmental protections.
The outcomes showed "voters reject policies that would make energy more expensive," said Thomas J. Pyle, president of free market advocacy group American Energy Alliance.
While polls had indicated rising concerns among Americans over carbon emissions and water quality, the measures on the ballot in the three states to rein in fossil fuels industries were soundly rejected on U.S. Election Day on Tuesday.
In Colorado, an initiative to limit new drilling near populated or vulnerable areas, which would have heavily curtailed the industry, received 43 percent of the vote, less than the majority required to pass.
The Washington state measure, meanwhile, which would have imposed the nation's first fee on carbon emissions - mostly at the expense of the state's oil refiners - garnered only 44 percent of the vote.
Groups defending the oil industry spent a combined $66 million to defeat the Colorado and Washington measures, with much of the contributions coming from large energy companies - including BP Plc and Marathon Oil Corp unit Andeavor.
Environmental groups blamed the defeat of the Washington state carbon fee on the hefty spending by opponents.
"Big oil spent unprecedented amounts of money to tell big lies," Gene Karpinski, president of the League of Conservation Voters, said at an event on Wednesday to discuss the election.
Washington state's measure was supported by millions of dollars in contributions from Microsoft co-founder Bill Gates and an alliance of other billionaires and environmental groups.
Ted Halstead, head of the Climate Leadership Council, an industry-backed group proposing a nationwide carbon tax, said the defeat of the Washington state carbon fee "highlights the need for a popular and politically viable approach to carbon pricing at the federal level." A tax or fee is intended to reduce carbon dioxide emissions.
In Arizona, voters defeated a proposal backed by billionaire activist Thomas Steyer that would have required electricity providers to use renewable energy for half of their needs by 2030, up from the current 15 percent.
The measure was opposed by Arizona Public Service Co, the state’s largest utility, which argued it would be forced to shut coal and nuclear plants, and pass along those costs to customers.
A similar measure backed by Steyer in Nevada passed.
On Wednesday Steyer said the failure in Arizona was due to the way the measure was described on the ballot, implying the change could drive up costs for consumers and which had been written by the state's Republican attorney general.
"What we saw in terms of the ballot initiatives is that Americans in purple states support clean energy overwhelmingly as long as you are allowed to talk honestly about it," Steyer said, referring to states where the Democratic and Republican parties have similar levels of support.
DRILLER SHARES JUMP
Shares in oil producers operating in Colorado rallied on Wednesday after the state's proposed drilling restrictions failed. Anadarko Petroleum Corp gained 6 percent and Noble Energy Inc jumped 5 percent.
"We think the wide margin of victory matters and that it will serve as a deterrent to those who might otherwise decide to fund another round of opposition to the industry in the next election cycle," Capital One Advisors wrote in a Wednesday note about the Colorado measure.
Colorado's proposal would have required new oil wells to be at least 2,500 feet (762 m), five times the current minimum separation, from occupied or sensitive areas, effectively placing much of the state off-limits to new drilling.
"We are going to keep fighting," Russell Mendell, of anti-fracking group Colorado Rising, which backed the measure, said on Wednesday.
But opponents, including Colorado municipal officials, warned that the measure would have cost the state's economy billions of dollars, and would have reduced funding for roads, schools and public safety.
(Reporting by Liz Hampton and Gary McWilliams in Houston and Nichola Groom in Los Angeles; Writing by David Gaffen; Editing by Jeffrey Benkoe)
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