— Diane Schwenke
In Grand Junction, natural gas crash still reverberates through struggling economy
Editor’s note: This is the first in a three-part series examining parts of Colorado left out of the economic boom including Colorado Springs and Pueblo.
Russell Adams works as a roughneck on drill rigs. When he can find work, it tends to be about 800 miles away from his home outside Grand Junction. The drive to North Dakota’s booming oil fields is not one Adams looks forward to.
“Especially when you’re leaving your family and kids,” says Adams. “Anything could happen to one of them, and there ain’t no way you can drop on a dime and come back.”
He got his start on drill rigs when natural gas was booming in western Colorado in 2007. By then natural gas prices were on the accent, topping out at $12.69 per million British thermal unit (a standard measure for natural gas) in June 2008. The next year prices would crash, falling 76 percent to $2.99 by September of 2009.
Not long after the rigs pulled out, Russell followed the work to North Dakota. He works there sporadically, for a month at a time, usually living in a man camp.
“You do that for 30 days, that’s $10,000 you bring home,” says Adams.
Adams loves the Western Slope. His five kids have good schools, there’s plenty of natural beauty and lots of sunshine.
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He’s looked for other jobs nearby, but none can replace the money he makes on the rigs.
“There’s jobs, but how are those little dinky jobs going to support a family of seven?”
The Grand Junction metro stands in contrast to a booming Colorado. The area has yet to recover more than 3,000 jobs lost since the recession. It’s lagged all other metros in the state in job growth for so long that many have given up.
“People left,” says Diane Schwenke, president and CEO of Grand Junction Area Chamber of Commerce. “Those high-paying jobs were still available, and in fact starting to come back fairly strong, in other parts of Colorado, Weld County, or North Dakota.”
Jobs flowed to more lucrative oil-rich deposits, and have yet to flow back since natural gas prices are still depressed.
Schwenke has lived in Grand Junction since the early 1980’s when there was a similar boom and bust in energy that sent the community into a tail spin.
“We actually had a billboard that said, ‘Lord, just give us one more boom. We promise we won’t piss this one away,’”
Booms and busts, she says, are the nature of commodity-based economy, and may always haunt Grand Junction.
Natural gas prices remain far too low to support new drilling. But the industry says price isn’t the only problem.
“Price is a big challenge, but when you lay on top of that the most overbearing and overreaching regulatory regime our industry has ever seen, I think that makes a bad situation worse,” says David Ludlam, executive director of the West Slope Colorado Oil & Gas Association.
Most drilling on the western slope occurs on federal land, where permit delays have stymied operations, according to Ludlam.
“We have, just on the outskirts of Grand Junction right now, at least three companies who if they could be drilling today would be drilling today, and can’t get their permits,” Ludlam says.
It takes 194 days, sometimes longer to get permits to drill on federal land, according to the Bureau of Land Management. On private land, permits are usually approved in 45 days. Environmentalists argue drilling should not be fast tracked on what they call sensitive public lands.
At High Country Orchards in the small town of Palisade, just east of Grand Junction, it’s harvest time for the area’s famous peaches.
There’s a wine tasting room outside the warehouse where tourists sip on local vintages. Theresa High, who owns the orchard and winery, says the lackluster economy is proof that no region should be reliant on one big industry.
“That’s why it’s important to build the tourism industry, the wine industry, the agricultural industry so that we always have that foundation, and we don’t have to depend on energy,” says High.
Lodging tax collections for May increased 6.4 percent over last year, the biggest May since 2008, according to the Grand Junction Visitor & Convention Bureau.
High, like many tourism boosters, hope a proposal to designate Colorado National Monument into national park will spark even more visitors.
For now, the vineyards are taking off: from just one in the mid-1980s to 25 today. The growth in the quality of the wines too has caught the attention of aficionados from the Denver area.
“It’s right in our backyard, it’s kind of like a fun taste of wine country right here,” says Mark Drexel who’s spending the weekend in the area with his girlfriend. “Particularly this time of year when the peaches are going and everything. The weekend’s a blast.”
Drexel’s family is from the area, and he’s surprised to see the transformation.
“It was a lot more rugged around here when I was a kid. I mean it was just farm country,” Drexel says.
For all the hope surrounding tourism, the jobs don’t pay what the energy industry does, which still leaves underemployed drill rig workers like Russell Adams struggling to pay the bills. He’s trying to get a gig in North Dakota again, since he’s three months behind on rent.
“I have so much on my shoulders,” Adams says. “Having all these kids, trying to give them a life I didn’t have growing up.”