Boom! Boom!

In western Colorado, an energy boom of unprecedented proportions has been layered on top of a thriving amenity economy. Which will come out on top?

  • Rush hour traffic in Glenwood Springs, Colorado, where workers pass through on their way home from resort towns like Aspen to down-valley bedroom communities. ED KOSMICKI

  • Gas wells and their supporting truck traffic have boomed along the scenic Colorado River in Garfield County, Colorado, where more than 2,500 gas well permits were issued last year. ED KOSMICKI

  • In Rifle, Colorado, the average home now goes for $350,000. ED KOSMICKI

  • Barber Mike Wood has held on through Rifle's ups and downs. FRANCISCO THARP

  • The East Fork of Parachute Creek - home to rare plants and animals and one of Colorado's tallest waterfalls - runs through the 70,000-acre Roan Plateau in the heart of oil shale and gas country. Despite strong public opposition to drilling on the top of the scenic plateau, the BLM has released plans to allow 193 well pads there in the next 20 years. COURTESY COLORADO ENVIRONMENTAL COALITION

 

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Last year, Colorado's Legislature shifted the regulatory balance by overhauling the state's gas and oil regulatory commission. Long weighted toward industry, with a mandate to encourage energy development, the commission now is charged with protecting public health and the environment, and the membership is less industry-heavy. This spring, Colorado Gov. Bill Ritter, D, appointed Houpt to the commission (much to the dismay of the energy industry). In late March, the commission released a draft of new rules, including policies that would give local governments more say, restrict drilling in some wildlife habitat, and require gas facilities to be more than 500 feet from drinking-water sources.

Lambert, Rifle's mayor, feels that the proposed regulations, if enforced, will be enough to keep his community from being steamrolled by the boom. "I just want to make sure that at the end of the day, when the industry has extracted the gas, our land is left to sustain the long-term economic driver, and that we have the same quality of life as before the gas industry was here, and hopefully even better."

Dean, however, isn't willing to wait for the new regulations to take effect or for the gas companies to leave. She moved back up-valley to Carbondale, where housing is more expensive, in mid-April. "I came to grow old and die (in Rifle), somewhere peaceful and charming," says Dean. "But, boom, here we are in this mecca of contamination and industry. Everyday, when I see rigs or something like that on the front page, it's a constant downer."

A lot of people in western Colorado are bracing themselves for the next Black Sunday, when the energy storm subsides. They may have to wait a while, though.

Even if all the drilling stopped tomorrow, the bottom would not drop out of the energy economy the way it did in 1982. Thousands of wells would continue to suck gas from the earth and pump taxes into local and state coffers, and they'd provide jobs for hundreds of workers - one person is needed to service and maintain every six wells or so. EnCana, one of the largest operators in the region, expects to have about 1,000 employees and contractors in the field during every phase of production, from drilling to reclamation, says company spokesman Doug Hock. That should keep paychecks rolling until at least 2030.

In all likelihood, the drilling phase, which requires 35 workers for each rig, will continue for a long time, however. Natural gas prices have cranked up tremendously since 2000, and are expected to stay high. New pipelines are opening up new markets. And even if the next administration in Washington is less friendly to industry, it may not hamper drilling much. The energy companies already have purchased enough mineral rights to leave them with a huge backlog of drillable land.

Current economic forecasts predict that some 1,000 or more new wells will be drilled in the Piceance Basin every year for the next few decades. By 2035, there will likely be more than 37,000 producing wells in the region - about five times the current number.

And that's just the baseline. Though it may seem like a cruel joke to those who lived through the last bust, oil shale is poised to return. The Energy Policy Act of 2005 mandated aggressive leasing of federal lands in oil shale country, and Shell jumped on the opportunity. It is currently testing a new extraction technique about 25 miles northwest of Rifle called "in-situ" drilling, in which an entire oil shale formation is heated for a few years to coax the fuel out. Recent results look promising, says company spokesman Tracy Boyd, and the company expects to have what Exxon didn't 30 years ago: a "positive energy balance,"meaning that more energy comes from the shale than is used extracting it.

It may prove profitable this time. A 2005 RAND Corp. report warned that oil shale, extracted using the 1970s method, would not be profitable unless oil topped $70 per barrel. Back then, that seemed inconceivable. Today, of course, oil prices are in the $120 range, and Shell's in-situ technology could bring oil shale production costs down further. Oil shale could double western Colorado's gas boom, with some 25,000 employed directly by the energy industry by 2035.

In the soft light of the 3rd Street Studio, weeks before she will pick up and move to Carbondale, Darla Dean pulls on dusty cowboy boots after one of Ganesha's yoga sessions. Before class, she'd visited her horse, Rex, and shoveled manure. She looks down and sighs with a thin smile. "I came here for this," she says, pointing at the boots. "And I got this,"she says, touching a Nepalese symbol on her tie-dye tank top.

Dean appreciates places like the yoga studio; they help balance out the gas industry, which she calls "a rolling money machine that comes to plunder the money, the women, and especially the land."

Leaving the building, Dean glances at the block-long line of diesel pickups and tanker trucks stopped at the intersection. Streetlights and neon beer signs reflect off their hoods. Northwest Colorado has always known a roller-coaster existence, and its energy future is largely unpredictable. But on this chilly spring night, one thing seems clear to Dean. "Well," she says, turning to head home, "this sure isn't a sleepy little cow town anymore."


Francisco Tharp is the first High Country News intern of the new millennium to write an HCN cover story.

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