West’s natural resources industries are booming again

Sandy Shore

Monday, Sept. 26, 2005 | 9:56 a.m.

PARACHUTE, Colo. -- John Loschke climbs out of his truck in the cramped parking lot outside the Outlaws restaurant and surveys the collection of cars, trucks and RVs.

It's lunch hour on a hot summer day and he figures about 70 percent of the vehicles bear the unmistakable signs of oil and gas country. It reminds Loschke, the town's mayor, of the chaotic scene when Parachute's fortunes were changed during an oil shale boom some 30 years ago.

Today's energy boom, he says, is "managed chaos."

"We're better prepared. It's 25 years later and we've got infrastructure," he said.

Some two decades after the West's last oil bust, production of coal, natural gas, oil and uranium is on the upswing as the world's energy supplies dwindle and demand rises unabated. Even oil shale is getting a fresh look.

Operations are scattered across the sparsely populated land, prompting concern about potential impacts on land, water, air and even the communities, says Pete Kolbenschlag of the Colorado Environmental Coalition.

"Communities in the West are not being given the opportunity to really see what this package of possibilities means," he said.

Audra Moore, who owns a video game rental shop in Battlement Mesa, is worried about the landscape, noting the oil wells seem to be sunk every few acres in the Grand Valley area.

"I'm concerned about the looks and how it will affect the wildlife," she said.

Natural resources have helped sustain the West's economy since it was settled -- gold, silver, copper, coal, natural gas, oil. It's proven to be a roller-coaster ride with thousands of jobs created during prosperous times and then lost as demand ebbed.

A recent example occurred when Middle East oil producers shut off oil supplies to the United States in 1973 over U.S. support of Israel. The move sent companies scrambling to develop domestic supplies as gas was rationed and prices skyrocketed.

Thousands of workers filled housing complexes; city and state coffers were bolstered with revenue and government began bolstering infrastructure. Then the price free fall began, sending the West spiraling into economic doldrums as tens of thousands of jobs were lost, bankruptcies jumped and businesses were shuttered.

Difficult years followed as the region eased its reliance on natural resources by diversifying the economic base to include tourism, manufacturing, technology and construction.

"All of Colorado has grown in the meantime to a much more sophisticated place," said Russell George, a native of nearby Rifle who heads the state Department of Natural Resources. "We have a much broader mix of people than we had then."

As the United States and other countries search for reliable energy sources, the West's industry has turned around yet again with a new demand for oil, natural gas, coal and uranium.

Luke Popovich of the National Mining Association said the resurgence in mining is "almost unprecedented in modern times."

The bulk of the nation's electricity is produced in coal-generated plants, with nuclear power plants generating about 20 percent and natural gas, 17 percent to 18 percent, Arch Coal Co. spokesman Deck Slone said.

St. Louis-based Arch, which operates the world's largest coal mine near Gillette in Wyoming's Powder River Basin and three other mines in Colorado and Utah, is gearing up to open other facilities.

"We expect demand to be tremendous for coal going forward," he said.

In Colorado, coal production hit a record in 2004 for the fifth consecutive year with 40 million tons produced. Wyoming, the nation's No. 1 coal producer, had a record 396 million tons, up 5.4 percent, according to the Wyoming Mining Association.

Standing in Parachute about 160 miles west of Denver, oil rigs are on buttes; crude oil is produced in Rangely, and uranium and coal reserves aren't far away.

"This is a natural area for energy development. And it's not going to be stifled. People are going to complain and all that stuff but they're not going to stop it," said Robert Loucks of Grand Junction, a former manager of oil shale operations here for Shell and Occidental Oil Shale. "Hopefully, they'll get it to where it's far more acceptable to more people."

With most industry watchers predicting production will continue for years, government leaders and residents are hoping they can strike a balance between the need for energy and the desire to protect the environment. Each energy process has the potential to affect the environment.

George says governments need to coordinate development.

"You can't have oil shale on the same place as a gas field," he said. "I think there are ways of sorting all that out."