Energy boom has adverse effects

Study: Development takes toll on other segments of economy

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— A new study indicates the natural gas boom on the Western Slope has made it harder for other sectors of the regional economy to thrive.

Those business segments - such as the service, professional, construction and tourism - helped the local economy recover from the oil shale bust of the early 1980s and currently sustain most households on the Western Slope, according a report from Headwaters Economics, a Bozeman, Mont., nonprofit research group.

"If you can maintain those sectors through the energy surge, through the boom period, you are going to be better off coming out at the other side," said Mark Haggerty, one of the authors of the report.

The release of the study, which focused on energy development's impacts on the state and analyzed Mesa and Garfield counties as a case study, comes at a time when natural gas companies are cutting back on drilling in the Piceance Basin, which stretches across Garfield, Rio Blanco and Mesa counties.

Representatives of several companies have said those decisions have been spurred by the problems affecting the credit markets, declining price of natural gas, limited pipeline capacity in the area and the prospect of new rules for the state's oil and gas industry.

The report's authors said energy development on the Western Slope has created new "economic opportunities, reduced unemployment, and raised wages for many workers."

But on the negative side, that boom has exacerbated inflation, contributed to a growing wage and wealth gap, increased pressure on housing and commuting, and has made it "difficult for other industries to thrive."

"The energy surge also raises the danger of returning to a more specialized economy subject to slower long-term growth as well as greater volatility," the study said.

Garfield County Commissioner John Martin, a Republican who recently won re-election, largely disputed the study's contention that the natural gas development in the area has made it difficult for other sectors of the regional economy to be successful.

"I think it has stimulated most of the economies of the local areas," he said.

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