Rifle rides the oil/gas boom | VailDaily.com

Rifle rides the oil/gas boom

Judith Kohler
Associated Press
Vail CO, Colorado

RIFLE ” Keith Lambert is the perfect guide to this western Colorado city: he’s lived in the same house for 26 years, taught school here and, as mayor, has to keep up with the changes wrought by one of the biggest energy booms in state history.

But even he’s stumped by a newly excavated swath down a hillside. Stopping his SUV, he looked down at the front-end loaders and said: “I don’t know what this is. It’s possible it’s some home development site approved in this area.”

Lambert can be forgiven for not knowing about every freshly turned mound of earth in his town. Rifle, a community of 8,100 on the Colorado River with deep agricultural roots, has become an epicenter of the region’s natural gas drilling boom.

Hotel rooms are booked for weeks by pipeline and gas-field crews. Traffic backs up nearby Interstate 70 and clogs Rifle’s main street, Railroad Avenue. Wages and real estate prices have skyrocketed; housing and municipal and police services are strained.

“We have a situation where the city is scrambling to meet needs in all sectors,” City Manager John Hier said.

Rifle is in the Piceance Basin, a geographical formation that federal and industry officials estimate holds at least 100 trillion cubic feet of natural gas. One trillion cubic feet is enough to heat 15 million homes for one year. The basin is considered among the best natural gas plays nationwide.

Statewide, a record 5,904 drilling permits were approved last year, more than double the 2,915 issued in 2004. Garfield County, home to Rifle, accounted for 31 percent of those permits and this year leads the state with 37 percent _ 1,196 _ of 3,273 permits approved through July 13.

Also looming are plans to tap the area’s vast reserves of oil shale.

Companies are experimenting with ways to extract the oil and tap what federal officials say could be three times the proven reserves of Saudi Arabia _ theoretically enough to supply the United States for a century.

A new report by the Colorado Energy Research Institute, created by the Legislature, pegged the industry’s total economic output at $3.4 billion in the Piceance Basin. Jobs, direct and indirect, numbered 6,694. The industry paid $71 million in royalties and lease payments for access to private minerals and land.

All told, the industry generated $22.9 billion in benefits for Colorado in 2005. The trade group Colorado Oil and Gas Association estimates the industry employs about 70,000 in jobs paying an average of $60,000 a year.

In Rifle, that’s meant more, higher-paying jobs for residents, more business for local stores and more tax revenue.

Garfield County’s unemployment rate was 2.2 percent in July. The statewide rate was 3.8 percent.

Hundreds of new homes are planned in the gulches and fields north of downtown. Through June, the city approved 157 building permits, up 48 percent from 106 permits a year ago and up 241 percent from the 46 issued in 2002.

Rifle also has seen its total revenue skyrocket, reaching nearly $23 million last year, compared with roughly $8 million in 2000.

But the costs are also up _ way up. City expenditures totaled roughly $9 million in 2000; this year’s budget is $46.5 million, boosted by a $20-million-dollar-plus wastewater treatment plant being built years ahead of schedule because of the growth.

City officials want traffic roundabouts to speed up the flow. They originally budgeted $1.9 for three roundabouts but now need more than $3 million for just two because local construction and materials costs are up.

Rifle’s increasing costs forced it to cut its budget for a new police and courts building to $3.9 million from $4.5 million. Energy companies have kicked in at least $100,000 for the project.

Crime, too, has risen. Police Chief Daryl Meisner estimates that his 17-officer department is fielding double the calls it got five years ago. “I haven’t had time to analyze the statistics,” he said.

Problems with drug abuse and traffic dominate. A regional task force Meisner works with is targeting methamphetamine use, which Meisner believes will soon outpace cocaine use in the area. He attributes the problems to a higher volume of people, not necessarily the energy boom.

Gary Pack, superintendent of the school district that includes Rifle, is just trying not to fall too far behind. The district began recruiting teachers in January in 24 states and still had 22 people back out of contracts because they couldn’t find places to live.

“Housing is the most challenging thing,” Pack said. “We don’t even use the term ‘affordable housing.’ It’s ‘attainable housing.'”

Two teachers camped in a local park for six weeks last year until they could find a place to live. Pack said those teachers didn’t return this year.

In 2003, the median price of a house in Rifle and neighboring towns was $191,000, said Danette Dickey of the Colorado Heritage Real Estate Co. It’s now $297,400.

Another headache for the school district is keeping employees such as bus drivers and food service workers. Pack said he can’t keep workers at $14 to $16 an hour when the gas industry pays double that to drive a water tanker.

“Busy is kind of a mild word” for Rifle’s economic climate, said Annick Pruett, the local chamber of commerce director.

Fast-food restaurants and other businesses offer starting wages at $12 an hour or higher and are beefing up benefits to attract and hold on to workers.

“A lot of high school graduates just go straight to the gas fields for $25 an hour,” Pruett said. “How can you turn that down?”

Last year, Gary Miller, owner of Miller’s Dry Goods, offered $200 rewards to anyone who helped him find new workers.

“I thought it was bad then. Ha!” said Miller, who’s down to one employee in his Rifle store. He usually has three.

“The gas industry just has a rippling effect, from gas stations to grocery stores,” Miller said. “Even the local pharmacy’s drive-up window is closed. They can’t keep people.”

Rifle and other Western Slope towns have seen boom and bust before.

The last attempt to mine oil shale collapsed in the early 1980s amid when oil prices and government subsidies dropped. Rifle struggled, shellshocked after Exxon laid off 2,200 people in one day at its oil shale project in nearby Parachute.

The town began seeing slow, steady growth in the 1990s, thanks in part to tourism, retirees and people working in Aspen and Glenwood Springs looking for affordable housing. But the pace has quickened in the last five years, fueled by rising natural gas prices and the push for more domestic energy production. Rifle’s population went from 4,636 in 1990 to about 6,700 in 2000 to the current 8,100.

Brad Moss has experienced the energy industry’s growing pains _ and growth feels good to him.

He has worked for 27 years in western Colorado’s gas fields, and was one of only two employees when he joined Barrett Resources in 1987. The company, which later merged with Williams Production Co., now employs roughly 150 people in the area and is one of the region’s largest gas producers.

“My goal was to raise my kids here. We’ve been able to stay,” said Moss, 46.

Thanks to the rejuvenated industry, his three children can stay as well if they want. A daughter attending college to become a teacher wants to work in the local school district.

“A lot of folks from their mid-20s to mid-30s who grew up here are staying or coming back,” Moss said. “We’ve got so many people we’ve hired who wouldn’t have been able to stay otherwise.”

Rifle’s changes are not for everyone.

Duke Cox recently left Rifle for Grand Junction, 60 miles to the west. As a small homebuilder, Cox said it got tougher to compete with the energy industry’s high wages.

Quality of life was also a big issue: the noise, dust and traffic from the constant stream of 18-wheelers; the wells drilled on ranches and near homes in the tree- and shrub-covered foothills. Cox missed the small-town atmosphere that drew him to western Colorado more than 30 years ago.

“It’s an industry town now,” Cox said.

Looking down on town from a hilltop, Mayor Lambert notes that new arrivals often ask where the recreation centers are.

“Our recreation center has always been the hundreds of thousands of acres around us,” he said.

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