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Try this boom on for size

Don Cohen

Somehow, in my high school classroom in Denver, I thought I’d feel the ground shake when the nuclear bomb exploded. It was Sept.10, 1969, when the Atomic Energy Commission set off a 40 kiloton proton bomb a couple of hundred miles away at the Rulison site near Rifle.It was an experiment to see if a nuclear blast would fracture rock 8,000 feet below the surface and free up pockets of trapped natural gas. And it was just another footnote in the decades-long pursuit of a way to unlock the world’s richest oil shale reserves locked in the earth in a band of arid land running through Colorado, Wyoming and Utah.In the March 10, 2005, issue of The Wall Street Journal, reporter John Fialka wrote of the reawakening in government and private industry’s interest in exploiting this potentially rich source of energy.It’s estimated that there could be upward of two TRILLION barrels of shale oil within the United States. A big bulk of that lies in the West in the Green River Formation. Keeping that two trillion barrel figure in mind, compare it with Saudi Arabia’s proven reserves of only 261 million barrels.If, and this is a massive if, this domestic supply could be tapped, the global oil market would radically change. Already, mining tar sands north of Edmonton, the Canadians are shipping 95 percent of that oil to the U.S. Environmental and economic constraints still form a high wall between a hungry child and a bountiful banquet table, but slowly that barrier is melting away.Energy self-sufficiency looms large as a national security issue, with the Pentagon being an active proponent of developing domestic supply. Additionally, our competition with China for oil continues to increase. So, with tightening supplies and increasing global demand, the price for a barrel of crude is almost guaranteed to climb. These market forces may start turning pipe dreams, or more accurately, pipeline dreams, into reality.So what does this have to do with the price of gas in Edwards? Very little, really. But, unlike the 1969 Rulison detonation, a drive to exploit our oil shale resources might very well set off an economic explosion throughout the entire state.An oil boom on the Western Slope could have implications on our state and Eagle County that are difficult to fathom.The last big building boom in Denver, which reshaped its skyline, happened in the 1970s and early 1980s. It was a boom driven by oil and gas companies. Calgary and Edmonton also saw similar real estate booms. A lot of the executive payrolls in Denver increased the pool of upper-income buyers who bought weekend properties in Summit and Eagle counties. In a 21st century boom, we’d probably see a similar pattern re-emerge.In the 1970-’80s boom, Grand Junction experienced increases in population. Battlement Mesa appeared overnight as a community designed to service the anticipated influx of workers. Today, Grand Junction has become a more attractive place to live with a good climate, small city feeling and affordable housing choices across the real estate spectrum. I would expect that some of the new boom growth would choose Grand Junction over Denver.What would this do to I-70? Well, it would get widened sooner rather than later. More than likely, the money to pay for rapid expansion would come from mineral severance taxes. But with wider lanes there’d be a lot more traffic and noise. The dreams of a high-speed rail might become far more practical with an idea of extending service from Denver to Grand Junction. Again, a high-priced item like this may become “affordable” with mineral severance tax underwriting.Air transportation would change, too. I would expect much more frequent commercial air service in and out of Grand Junction. Instead of flying into DIA, skiers might increasingly look to fly into Grand Junction, rent a car and head east. The impact on the Eagle County airport might be in more general aviation (private) flights, as more executives may choose to live or vacation here.Under this scenario, with increased growth on the Front Range and unexpected growth west of Eagle County, we’d find ourselves smack dab in the center of a completely new population dynamic. Our mountain oasis would become even more desirable with improved transportation access. And with easier access, the view of being a mountain county might change to be one of an extended suburb. That’s not a particularly pleasant vision.If this all seems a little farfetched to you, our state’s past history proves that natural resources and economic opportunity are powerful, community-altering forces. Denver sprang to life in 1858 fueled by the gold and silver mines in Central City. At one time Leadville was one of the largest cities in the state. And closer to home, Eagle County’s early history was based on the mines at Holy Cross City. A little over a 100 years later, the energy boom of the 1970s and ’80s propelled Denver from an overgrown cow town to a top tier city.Sometimes economic explosions don’t happen with a big bang, but with a slow inexorable wave. Either way, it’s not a bad idea to keep an eye on the detonator. In this case it’s the one with the word “oil” stenciled on it.Don Cohen, executive director of the Vail Valley Economic Council, can be reached by e-mail at dcohen@vvec.orgVail, Colorado


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