High point for GarCo gas jobs may be past
GLENWOOD SPRINGS — Garfield County’s natural gas industry will make a comeback, but probably never employ as many people as it had in recent years, state Demographer Jim Westkott said Thursday.
Energy had been responsible for 2,400 jobs, or 11 percent of the county’s total, as of 2007, Westkott said at an economic luncheon presented by the Glenwood Springs Chamber Resort Association.
The recovery of the natural gas industry will be directly tied to the recovery of the nation’s economy, said Don McClure, vice president of finance and services for EnCana Oil & Gas (USA).
Industrial activity and electrical power requirements, as reflected by the nation’s gross domestic product, drive demand for natural gas, McClure said.
Gas is used intensively for production of products such as plastic and fertilizer, he said.
He said things could well get worse for gas producers before they get better. The national active drilling rig count, which peaked at 1,606 in September, had fallen to 790 by mid-April, and McClure said a lot of people in the industry think it could drop below 600 before starting to rebound.
“Some of that will be driven probably by some coal-to-gas power generation switching, just because of the low levels of natural gas pricing. … But it’s not demand-driven, it’s price-driven,” he said.
He said gas prices are projected to rise again in coming years, but only gradually.
Donna Gray of Williams Production said that company has about 9,000 wells yet to drill in western Colorado, putting it in a good position once the economy starts turning around.
Rig counts in western Colorado’s Piceance Basin have fallen from 102 last year to 29 in mid-April, McClure said. EnCana is a major gas producer in the basin, centered in Garfield County.
The drilling drop-off is contributing to a significant economic slowdown in the county, where home sales and construction have fallen off sharply. The county also supplies services and commuter labor to the Aspen and Vail resort regions. Westkott said a lot of anticipated growth for Garfield County was to have come from the second-home construction market in Eagle County, but national economic factors have caused that market to soften.
A silver lining from Eagle County’s perspective is that it has been able to better provide affordable housing for workers, Westkott said. But that has reduced demand for worker housing in Garfield County.
One bright spot for Garfield County is that it continues to be an attractive destination for tourists, Westkott said.