The Global West: how foreign investment fuels resource extraction in Western states

  • Composite photo: Wyoming drill rig and Chinese flag.

    Istock, Jim W. Parkin
  • An American flag flaps in the wind on a ranch near Douglas, Wyoming. The area is part of the Niobrara Shale Formation in which the Chinese are invested.

    Michael Shane Smith
  • A loaded China Shipping Line container ship makes its way down the main channel at the Port of Los Angeles.

    Tim Rue/Bloomberg via Getty Images
  • The Climax Molybdenum Mine in central Colorado, closed for more than a decade, held a job fair in February, and is gearing up to reopen, market conditions permitting.

    Robert Moran
  • U.S. Sen. Harry Reid (center), Democrat from Nevada, and Republican Jon Huntsman (far left), former Utah governor and now candidate for president, meet with Wu Bangguo, chairman of the Standing Committee of the National People's Congress, during a mission to China in April. Nine other U.S. senators traveled to China for talks on topics from clean energy to human rights.

    Ng Han Guan, Pool/Getty Images
  • Governors Brian Schweitzer, D-Mont., and Christine Gregoire, D-Wash., meet to discuss the controversial proposal to build a coal-export terminal near Longview, Washington.

    Elaine Thompson, Associated Press
  • Arizona Gov. Jan Brewer, R, gets an explanation of photovoltaic cells from Suntech founder Zhengrong Shi at Suntech's new manufacturing plant in Goodyear, Arizona.

  • Holli and Patrick Guillory ride near their home south of Hillsdale, Wyoming, where the increase in drilling operations -- sparked by global demand and international investment -- has them worried.

    Michael Shane Smith

Page 5

Out on the western edge of the Powder River Basin, about 60 miles as the magpie flies from Douglas, the little town of Midwest sits mostly forgotten by the rest of the world. Its small houses are crammed together along bumpy streets. Some of the yards have been cared for, but others are cluttered with the detritus common in the rural West: an old stove here, a car up on blocks there, a torn-up sofa perched on a weathered plywood porch. On a windy day in April, when the sky is gray and the light flat, the town seems empty, despite all the cars parked haphazardly before the homes. The distinct aroma of burnt oil lingers in the air.

Midwest exists for only one reason: the Salt Creek Oilfield. A Dutch company drilled its first gusher in 1907. Then the place went crazy. The Midwest Refining Company took over the field and ran the company town. Midwest got its own hospital, held one of the first night-lit football games in the U.S. -- Casper beat Midwest, 20-0 -- and had a tennis court, a clubhouse, a theater and a hotel. Back then, money gushed out of the field like water, and the company gave a little bit of it back.

Then, beginning in the 1930s, it shriveled up. Standard Oil, based in Indiana, bought the field and took over its operation. The hospital closed, the theater was torn down, the company offices were moved to Casper. Today, the Salt Creek Field's owner is based in Houston, where decisions are swayed by the need to please shareholders, i.e. short-term profit, and driven by oil prices determined by forces emanating from far away.

The wealth never really stopped flowing out of the Salt Creek field. With the help of CO2 injections and high oil prices, its wells still produce hundreds of thousands of dollars worth of oil each day. Anadarko, the field's operator, reported $363 million in post-tax profits for the first quarter of this year, and the guys working in the field probably make pretty good money. But it hasn't added up to what one might consider a prosperous community.

There was a time when the mine and oilfield managers and bosses, if not the owners themselves, lived alongside the workers in the local community. The bosses witnessed the needs of their communities firsthand, and they had the power to influence the company to do something about it. If they didn't, the workers and the unions had the clout and access to make certain demands, and have them met.

In today's world, we're not even sure who the bosses are or where they live. How can we expect a firm that's based in another state, or another country, to build a new library or school, or to pay for economic diversification efforts and new roads? How can we demand that it set up a safety net to catch the roughneck who gets his arm ripped off on the rig, or the single mom who's fallen on hard times, or the entire community when the oilfield finally does dry up?

Not that we even try that hard. We've long surrendered these sorts of demands in return for a few high-paying jobs, for the distant prospect of a Hummer in the gravel yard of the factory-built home and a Walmart close by. We have blindly handed over our own sovereignty to the corporate giants in the name of energy independence. We have watched our bounty slide along the rails and the interstates to the East without complaint, comforting ourselves with the illusion that it would make our nation stronger and our nation would return the favor by lifting us up with it. Today, the centers of control are drifting even farther away, and, in our desperation for jobs, we hardly even notice.

A couple days after driving around the Powder River Basin, looking unsuccessfully for Russian uranium smugglers, I sit in the Denver office of Jeremy Nichols, climate and energy program director for WildEarth Guardians, an environmental group that is fighting plans to expand mining in the Powder River Basin of Wyoming. Nichols sees the latest invasion as nothing more than another iteration of the story our region seems doomed to repeat: "This is the constant struggle of the West," he says. "We try to have this independent face, but our future is always tied up with someone far, far away. We're always sending our value somewhere else."

Adding another global twist, native Westerner Jonathan Thompson wrote this story while based in Berlin, Germany. He's back stateside for the next nine months as a Ted Scripps Environmental Journalism fellow at the University of Colorado in Boulder and an HCN contributing editor.

This coverage is supported by contributors to the High Country News Enterprise Journalism Fund.

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