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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Current forecasts show that Garfield County will be able to cover operating costs. But even with all of its tax revenues, the county may come up short on capital costs in the next three decades. And towns in the gas patch face an even tougher future. Rifle's sales tax revenues - cities don't collect property or ad valorem taxes - have shot up an average of 16 percent each year thanks to the boost in retail trade brought by the workers. But that's short of what's required to build badly needed infrastructure.

So both counties and municipalities must rely on state mineral severance tax revenues (85 percent of which come from oil and gas) to cover funding shortfalls. In recent years, the county and its communities have received some $37 million to refurbish a town hall, construct traffic roundabouts and help Rifle build a community park. But relying on those taxes is a bit of a gamble. Because of its taxing structure, Colorado has one of the lowest severance tax rates in energy country (due to a provision that allows energy companies to deduct their property tax payments from their severance tax liabilities). And the money is distributed to local communities in ways that don't always equate with the energy industry's impacts.

Garfield County, for example, produces about 20 times more natural gas than neighboring Mesa County, yet over a five-year period collected $23 million less in severance tax funds. This is partly because Mesa houses so many of the region's energy workers, but it's also because a good portion of the severance tax funds are doled out in the form of grants, which are scattered around the state.

Local governments are trying to use the funds more wisely than they did during the last boom. "The last time Rifle was booming, people pretty much sat back and said, 'Yeah, good times are here,' and it was gravy,"says Daler. "Then the bust happened, and people didn't see it coming. This time, we see it coming."

Garfield County is cooperating with Rifle and the local school and hospital districts to build 200 units of affordable housing, and the county has permitted 47 company man-camps - modular housing units that sit near the drill pads themselves - to alleviate the housing crunch.

Rifle's planners are working to develop the downtown area to attract more sustainable businesses, says assistant city manager Matt Sturgeon. A lumberyard has already been moved north from downtown to make way for more retail and residential space. The city plans to build an 11-acre, $6 million park along Rifle Creek, as well as a "health and wellness"community center.

Additionally, Rifle hopes to host an "energy village": a downtown collection of companies developing solar, wind, biofuel and other non-fossil fuel energy sources. "The catalyst for this vision,"says Sturgeon, "was the resurgence of fossil fuels in this area, and the desire of the community to assess its other economic opportunities so we're not held hostage by the cyclical phases - the ups and downs - of the fossil fuel industry. We're trying to maintain a sustainable community."

This economic diversity is key to long-term growth, says Ben Alexander of Headwaters Economics, an independent nonprofit research group. "People are earning real money in this job market, and that's a great thing. "But, he warns, regions with economies that are overly dependent on energy development - places like Gillette and Rock Springs, Wyo., southeast New Mexico, and Big Horn, Mont. - are "less resilient, more volatile, and over the long run, they can grow more slowly."

Ultimately, something much less tangible than drill rigs may determine the future of the gas patch communities. Rural communities like Rifle appeal to tourists and long-term residents largely because of their "quality of life." It's an elusive, and subjective, concept, but an important one for non-energy economies. And it is something that could be destroyed by rapid gas development.

Duke Cox, the contractor, loved living in the town of Silt, just east of Rifle. But he recently left, moving from the center of the boom to its fringe, in Palisade, Colo., where peach orchards and vineyards still outnumber gas wells. "Silt was a little piece of Colorado heaven, and we chose to abandon that," says Cox. "We want to live somewhere where you can find clean air and relative peace and quiet, none of which you'll have in a gas patch, by the way." He followed the lead of his family doctor, who left for the same reasons.

The gas boom kept Darla Dean's car-cleaning jobs coming, but she says that's not worth the environmental "toxicity" she's experienced. Last September, after walking through a marsh of black sludge on the south edge of town, she and her dogs all got sick. The dogs vomited all night, and Dean went to the ER with a racing heart beat and skyrocketing blood pressure. Dean says it took her five months to recover. Anecdotal reports of similar illnesses crop up frequently in energy country, and some believe the chemicals used in hydraulic fracturing - a method for getting at the oil or gas trapped deep in rock - are to blame. A definitive link has yet to be made, but the mere perception of a link, combined with the well-documented fact that gas wells damage air quality and increase ozone levels, can be enough to drive away people who were attracted to the region by its clean air.

Meanwhile, the public lands - most notably the wildlife-rich Roan Plateau - are targeted for more gas development in the future. A new study was just launched to determine how energy companies can ease their impacts on wildlife in the region. A 2006 report from the Pinedale Anticline gas field in Wyoming's Upper Green River Valley found that winter mule deer populations declined 46 percent - much more than herds on the study's nearby control area. Another study in that area (funded by Shell, the Wyoming Game and Fish Department and others) found that oil and gas development pushed pronghorn antelope off winter range.

New roads and well pads cutting through the brush, or drill rigs grinding away in the wild, could also endanger Rifle's top 20 ranking in Outdoor Life's survey of the best places to be an outdoorsman. "We have heard from some hunters that the increased traffic and activity is changing their hunt,"says Randy Hampton of the Colorado Division of Wildlife. "Not necessarily that there aren't critters, but that it makes the hunt less quiet, less remote."

Local officials hold out hope that stronger regulations can mitigate impacts. "I would hate to see us so blinded by the notion of a boom time that we aren't careful about the area,"says Garfield County Commissioner Tresi Houpt. "If we don't have responsible regulation in place, we won't be in control of our destiny. Industry will be."

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