Taming energy cycles

Colorado’s 150 years of mineral extraction have been marked by boisterous booms and appalling busts. State, federal and local oversight have ameliorated the worst aspects of the boom-and-bust syndrome, but one need only look at recent news stories to know it hasn’t disappeared.

As long as Colorado continues to take advantage of our mineral wealth — and we believe it must do so — there will continue to be ups and downs in the various energy industries. But we think this state and this region can also do more to obtain benefits from energy resources instead of simply being a place from which mineral wealth is extracted and shipped elsewhere.

Consider some of the recent news stories about energy:

First, there is the report from the Energy Department this week that the United States is now second only to Saudi Arabia in oil production, and may be No. 1 within a few years. This in a country where, just a few years ago, it was projected we would be facing a crucial oil shortage before long.

Most of the oil boom has occurred on private and state lands in places like North Dakota and Texas, coupled with increased off-shore drilling in the Gulf of Mexico. But Colorado hasn’t been shut out of the oil boom. There has been considerable drilling along the Front Range. And energy companies are exploring similar formations on the Western Slope, from Routt County to De Beque.

Still, it’s no secret many jobs that once were available in the gas fields of western Colorado have moved North Dakota and other regions.

Although drilling activity has clearly decreased in this region over the past half-decade, nationwide natural gas is helping to create jobs and stimulate manufacturing. So says Daniel Yergin, an energy expert who won a Pulitzer Prize in the 1990s for his book, “The Prize,” about the oil industry.

The natural gas boom, combined with the oil boom, has created 1.7 million jobs since 2008, Yergin said. That could reach 3 million by 2020, he wrote in The Wall Street Journal Tuesday.

More importantly, cheap natural gas is prompting U.S. manufacturing companies that moved their operations overseas to reconsider factories in this country, Yergin said.

Natural gas from western Colorado remains an important part of the national supply, even if drilling has dropped off. That’s evident from the news reported in The Daily Sentinel Wednesday about the $207 million acquisition by a Dallas company of gas pipeline and processing facilties in this area.

While all of this is occurring, however, uranium prices have dropped, causing Energy Fuels Inc. to delay plans to reopen uranium mines on the Western Slope, as was also reported Wednesday. And last week, there was the news that a coal mine near Loma has yet to find new customers to replace the market it lost when the Cameo Power Plant closed.

To alleviate some of the highs and lows of the energy business, Colorado and the Western Slope need to do more.

For one thing, while state and local officials continue to work hard to boost compressed natural gas as a fuel for vehicles, they are hampered by prices much higher than CNG sells for in other parts of the country. The state needs to examine issues that are causing prices to be higher here.

Boosting the uses of CNG in this region — through lower prices and more facilities for both large fleets and individual drivers to fuel their vehicles — is one way to add value to a natural resource produced here. More such ideas can no doubt be developed, and one way to encourage them is to continue the effort to establish an energy research center at Colorado Mesa University.

Although further funding for the research center was blocked last year by the decision of federal authorities regarding mineral leasing funds for Mesa County, the idea hasn’t died. The community should support such a research center.partners in local projects.

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