A new study predicts that the energy industry will drive a doubling in population growth in northwest Colorado by 2035.
And that’s not even taking into account what would happen if oil shale development takes place in the region, the report says.
It was commissioned by Associated Governments of Northwest Colorado and conducted by BBC Research & Consulting.
It forecasts that the total population for Mesa, Garfield, Rio Blanco and Moffat counties will increase from about 200,100 in 2005 to 417,000 in 2035, as an estimated 50,000 new natural gas wells are drilled.
If oil shale development occurs in the region as well, the population could reach more than 466,000, with Rio Blanco and Garfield counties bearing the bulk of the additional increase.
That additional growth is based on an assumption of oil shale development reaching 550,000 barrels per day by 2035.
Even without oil shale development, Mesa County’s population would increase by more than 100,000, to 235,000, the study says. Garfield County’s population would jump from about 51,000, to 137,000. Moffat’s would double, to about 26,000, and Rio Blanco’s would triple, to about 18,600.
“This study was commissioned originally because the state and region needed to prepare to respond to the U.S. Bureau of Land Management’s Programmatic Environmental Impact Statement on Oil Shale,” Rio Blanco County Commissioner Ken Parsons said in AGNC’s news release Friday. “As it turned out, the baseline economic conditions that BBC defined as part of developing an understanding of the potential effects of oil shale development ended up being rather shocking in and of themselves.”
That baseline growth would create $2.1 billion in capital needs, and county property tax revenues from energy production would generate just $766 million to help meet them. State Department of Local Affairs (DOLA) grants could make up $1 billion of that shortfall if past funding patterns hold true, still leaving a gap of more than $300 million, the study says.
It predicts that a commercial oil shale industry would overwhelm the area’s rural infrastructure.
“Some form of major financial intervention and regional planning effort will be required to develop requisite infrastructure at the appropriate time in preparation for worker needs,” the report says.
It predicts that even without oil shale development, job growth in the region will roughly double by 2035, reaching 213,000. The energy sector’s share of those jobs is expected to peak at 17 percent in 2010 before trailing off to 11 percent over the next quarter century.
Annual natural gas well drilling for the region would peak at 2,075 in 2015, but remain strong over the entire study period, with 1,835 wells drilled in 2035, the study says.
In addition, Garfield County would eventually lose its status as the state leader in drilling activity. Drilling in the county would begin to drop off in 2016 and would cease by 2025. Meanwhile, much of the drilling activity would shift north to Rio Blanco County, where all drilling in the region would be occurring by 2030, the report predicts.
Federal royalties and severance tax revenue from the region will grow rapidly, “but distribution of revenues to this region is uncertain,” the report says. Aron Diaz, executive director of AGNC, notes that the threat also exists that DOLA funds that traditionally have gone to the region might be diverted for other purposes. “That’s going to make our ability to mitigate any of those impacts more difficult, if we don’t have the resources to do that,” he said.
