Chevron gets time to rebuild road to its Garfield County site
Problems on Wall Street reverberated Monday for a rural road near De Beque as Chevron said it faces a slight delay in meeting terms of its deal to improve the route to its natural gas field.
Chevron asked for, and received, more time from Garfield County to produce a $25 million letter of credit in association with its agreement with the county for rebuilding County Road 204.
Chevron spokeswoman Kristi Pollard said the problem arose when Chevron learned last week that the lender it had planned to work with, Wachovia, no longer was issuing letters of credit.
“The financial institutions, as you can imagine in this environment, are being very cautious,” Pollard said.
She said Chevron immediately began working with another financial institution to obtain the letter of credit. Pollard said Chevron expects to have the letter in hand within days.
“We are as committed as we can be to this project,” she said.
County commissioners agreed to revisit the matter in a special meeting next Monday morning.
County manager Ed Green shared Pollard’s confidence that the setback for the project is only temporary.
“I think it will go, no problem,” he said.
“They have just done their banking with Wachovia. Now that Wachovia is being looked at by others, they basically could not reach an agreement.”
Wachovia is being acquired by Wells Fargo after facing possible collapse because of bad mortgage assets.
Green said Chevron is experiencing “just what’s happening in the market today” when it comes to trying to borrow money.
“All of us are facing the same thing, I’m afraid, from buying a house to buying a car,” he said.
The financing delay is just the latest wrinkle in connection with the road deal, which has become the subject of steady criticism by Democratic County Commission candidates Steve Carter and Stephen Bershenyi. They have questioned the county’s agreement to support Chevron if it applies for severance tax credits to recoup much of its investment in the road.
Incumbent Commissioner John Martin, a Republican running against Bershenyi, has called the agreement a good deal for the county and said it is doubtful Chevron would have any luck retroactively receiving the tax credit even if it applies.
On Monday, Democratic state Senate candidate Ken Brenner of Steamboat Springs joined the fray, calling the deal the latest example of Republican giveaways to the energy industry. Brenner is running against Republican Al White of Hayden.