Gas drilling fuels pay growth

Elizabeth Bell, left, of Western Slope Auto shows a pickup to Terri Nelson in the showroom of the Grand Junction dealer. Household incomes rose, in some cases dramatically, in areas of Colorado where oil and gas development is the chief engine for economic growth, according to census data.

Coloradans elsewhere in the state saw a substantial dip in their buying power during the past decade, but not so for most people living in Western Slope counties, according to recent census figures.

While the state’s median household income dipped 9 percent from 2000 to 2010, it increased as high as 39 percent in parts of the Grand Valley.

The data, compiled by Denver-based nonprofit news service iNewsNetwork, show household incomes rose, in some cases dramatically, in areas of the state where oil and gas development is a chief economic driver.

“Study after study after study continues to confirm that our industry is among the highest paying in the state and throughout the nation,” said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association. “The benefits from that to communities in tax revenues and job creation and infrastructure development becomes critically important.”

Over the past decade, oil and gas production levels skyrocketed on the Western Slope. Garfield County, which leads the state in gas development, went from producing about 70 million cubic feet in 2000 to more than 438 million cubic feet this year.

And Ludlam promises the region hasn’t seen anything yet when it comes to the future of natural gas in the region. Because of newer technologies in deep-well drilling and increased pipeline capacity in the state, producers are expecting things to turn around dramatically in the next two years, he said.

“We’re beyond optimistic,” Ludlam said. “We’re certain that when we do see a commodities-price recovery, we’re going to be in a good place here in Grand Junction and Mesa County. There’s too many variables to be able to hammer down a certain date, but some of our companies are optimistic about 2013.”

The wellhead price of natural gas was as high as $10 per 1,000 cubic feet in 2008, but dipped to under $3 a year later. Today, it’s hovering at around $4, according to the U.S. Energy Information Administration.

Though oil and gas development is a major part of the region’s economy, some of the Grand Valley’s increase in buying power over the past decade should be credited to efforts to diversify the types of businesses that opened here, said Diane Schwenke, president and CEO of the Grand Junction Area Chamber of Commerce.

Schwenke said economic-development efforts during the past decade focused on two things: getting higher-paying jobs in the region and diversifying the valley’s businesses.

“I would definitely assume that this is related to the energy sector, and also potentially our position as a regional hub for health care,” she said. “Everything from the (registered nurses) to the docs to the specialties have also been growing over that decade. We also do have slightly more manufacturing than we did in the past.”

Schwenke credits the energy industry for helping improve other sectors of the economy, particularly their paychecks.

“It drove up overall wages for other sectors as employers across a huge band of businesses strove to be competitive and keep qualified employees in their businesses,” she said.

Like Ludlam, Schwenke is encouraged by the region’s economic future, pointing to recent increases in sales and use tax revenues for Grand Junction and Mesa County as indicators of good times ahead. According to city and county year-to-date tax collection figures for October, the city is up about 7.7 percent over last year, while the county is up 8.4 percent.

The means local residents are feeling confident enough in their financial situations to buy more local goods and services, she said.

“The sense I’m getting from folks on the ground is that we’re not going to go any lower, and we’re kind of on a gradual incline,” Schwenke said. “We’re starting to see some signs of improvement, and we’re hopeful that will continue. It will be growth at a very slow rate going into next year.”

Not all census data provided by iNewsNetwork, however, was so rosy.

The figures also showed the rate of children living in poverty increased in the four-county area over that 10-year period, and some local communities were higher than the statewide average of 5 percent.

While the city of Montrose and Montrose County experienced declines in their child-poverty rates, Grand Junction’s rate increased 6 percent, and the cities of Delta and Rifle went up 7 percent.

The rate in Mesa and Garfield counties increased 4 percent.

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