Recession in the gasfield?
Last weekend, the family and I drove over to Grand Junction, Colo., about an hour away from here, to run some errands. GJ, as we call it, is the metropolitan and service center of Colorado's Western Slope. In other words, it's awash with malls, big boxes, strip malls and fast food chains, not to mention the biggest airport and hospital around.
GJ is also a gasfield town. And for the last year or so, that's helped the city prosper while the rest of the nation's economy slides downward: Unemployment is way below the national average, home prices continue to stay high, and the wages are good. This spring, Burger King became famous for advertising a $300 signing bonus to lure burger-flippers. HCN covered the thriving gasfield economy in its "Boom Boom" cover story.
But now, natural gas prices are collapsing, dropping more than 20 percent in recent months. Drilling is declining nationwide, and there are signs the slump will hit Colorado's gasfields. Chevron just announced that it will slow its pace of development in Western Colorado, as have Williams Production and Bill Barrett Corp. Even a few less drill rigs could have a big impact, since each employs about 35 highly paid workers.
This boom has been so big, though, that a little dip will, by no means, equal a bust. Last month, the Colorado Oil and Gas Commission set a record for the number of drilling permits issued, and it's already issued 6,739 permits statewide -- already breaking last year's record.
That's enough, I guess, to give shoppers in Grand Junction confidence. As we drove into town on the grand new bypass "parkway," I fully expected to see ghostly malls and empty shops. Instead, we had a tough time finding a parking spot. The teeny-bop accessory store, Claires, had a line out the door. And people were opening up their wallets left and right. But perhaps the busiest place we saw was Victoria's Secret, where women lined up several deep at the two cash registers.
Bustiers, apparently, don't lose their appeal, even with when a bust looms on the horizon.