Astride Two Wests, Colorado County Faces a Tricky Economic Balance

By Felicity Barringer

SILT, Colorado — For those speeding by on Interstate 70, Silt is a hiccup of a town between Grand Junction and the Rocky Mountains. But its visions belie its size. Jeff Layman, the town’s administrator, believes Silt contains the seeds of a new economy. It could mean the end of the days when most of its three thousand residents drive an hour east to work in the recreational world of ski resorts — places they can’t afford to live. Many others drive an hour west to work in the industrial world of oil and gas wells.

As Layman sees it, “We’re in the sweet spot” of Garfield County, a long stepladder of land with its eastern end near Aspen and its western end at the Utah border. About 60,000 people live there; the Colorado River and Interstate 70 are its twin arteries. Silt is one of about 10 communities clustered around major highways. New businesses are arriving in town: Skip’s Farm to Market, with its offerings of vegetables and fruits opened on Main Street a few months ago, getting the attention of young foodies. A marijuana dispensary sits across the street.

Garfield County is a long stepladder of land with its eastern end near Aspen and its western end at the Utah border.   Geoff McGhee/Bill Lane Center for the American West

Solar panels in town generate 20.5 kilowatts of electricity and the town is investing $40,000 to install four electric vehicle chargers downtown.  “We’re talking to a guy who is involved in new-age energy — wind turbines for residential apartments. He’s a Western Slope guy and looks at Silt as being less expensive for land, buildings and labor,” Layman said. He dreams the man will decide to bring 180 jobs to town. He expects the town will allow all-terrain vehicles to ride on the same streets as cars, which could bring more ATV riders to town to head for the stunning plateaus above it. A town park is being expanded to make it more of a Colorado River boating hub.

Silt is one of many rural small towns balanced precariously between the old western economy and an emerging economy whose shape is unclear, but which could become a hybrid of recreation jobs and some kind of 21st-century manufacturing or technology. As Don Albrecht, executive director of Utah State University’s Western Rural Development Center explained, “Rural communities that are thriving are starting to make a transition,” recognizing that traditional industries are fading away.

Left: the Crown Mountain bike trail near Carbondale and Basalt Colorado; right, tourist gondolas at Glenwood Caverns Adventure Park outside of Glenwood Springs.   Bob Wick/BLM via Flickr; Clean Energy Economy for the Region via Flickr

Can Rural Economies Decouple From Energy Booms and Busts?

The future Layman envisions for Silt would move toward manufacturing, retail and leisure industries. These could keep some of his commuting workers home. But he thinks some will always work for the oil and gas industry, which has been central to Garfield County’s economy for decades. The county government and many public services, from schools to libraries to fire stations, rely on property and severance taxes from oil and gas wells.

On the other hand, towns like Silt, Rifle, Parachute, Carbondale and Glenwood Springs benefit directly from sales taxes.

“We’re in the sweet spot” of Garfield County  Jeff Layman, town administrator of Silt, population 3,129.   Felicity Barringer

The region has almost recovered from the bust a decade ago, when everything — the oil and gas industry, the real estate market, and the stock market imploded simultaneously. Its unemployment rate rose to 11.3 percent by 2010; in August it was at a national low figure of 2.4 percent. But nervousness — or resignation — about the boom-and-bust cycle lingers. Right now, one coal mine after another is closing in counties near Garfield. Oil and gas income fluctuates — it has declined in recent years — but could be more stable if demand is reliable.

It almost never is. Low gas prices just led Halliburton to lay off 178 petroleum workers in Mesa County, next door to Garfield County and home to Grand Junction, the Western Slope’s biggest city. It is 87 miles southwest on I-70 from Glenwood Springs, Garfield’s county seat.

A drilling rig south of Rifle, photographed in 2008.   Courtesy Lee Gelatt/Conservation Colorado via Flickr

In 1982, the area faced an economic apocalypse as Exxon left and 2,000 oil-field jobs disappeared. It was the biggest of the Western Slope’s recent economic downturns. As Headwaters Economics, a Montana research firm, said in a 2011 report, “Oil and natural gas jobs are more volatile than coal jobs because oil and natural gas prices tend to fluctuate more widely than coal prices. The bulk of the growth in mining employment over the past decade has been in the oil and natural gas sector, along with the bulk of lost mining jobs.”

Visions Range From a Rural ‘Start-Up Mecca’ to Pursuing Overseas Gas Exports

Sarah Shrader is a co-founder of Bonsai Design, a Grand Junction business specializing in recreation facility design — they make zip lines, among other things. She said hard experience has bred a downbeat attitude. “There have been five significant booms and busts in the last 50 years. This creates a culture of hopelessness… you’re always thinking prosperity is temporary.”

One option is Shrader’s dream. As a board member of the Grand Junction Economic Partnership, she wants to transform Grand Junction, the Western Slope’s biggest city into a tourist and start-up mecca. Shrader advocates enhancing access to the natural world to lure hikers, mountain bikers, hunters, fishers, and other recreation enthusiasts. Ideally start-ups seeking an outdoor-oriented workforce would arrive, paying employees good wages.

The pollution from the extractive industries does not add to the region’s tourist appeal. But the $15-an-hour salaries of service industry workers in resorts cannot match annual salaries of $60,000 to $100,000 that oil and gas workers can command.

The other option is doubling down on the fossil-fuel industries. In 2012 the county produced 703 billion cubic feet of gas; that declined to less than 500 million cubic feet last year. But industry leaders are banking on the Jordan Cove Project, a proposed liquified natural gas terminal that Pembina Pipeline Corp., a Canadian company, seeks to build in Coos Bay, Oregon. It would export gas to Asia from the Western Slope's Piceance basin, one of the largest deposits in the country.

This avenue to ending booms and busts relies on the terminal’s access to overseas markets. Local officials have personally lobbied Interior Secretary David Bernhardt — a Rifle native — to help get the Jordan Cove Energy Project approved by the Federal Energy Regulatory Commission. This summer, the commissioners wrote a letter urging FERC to approve it.

  Geoff McGhee/Bill Lane Center for the American West
 

Geoff McGhee/Bill Lane Center for the American West
 

Landowners in the pipelines’ path and Oregon environmental regulators are resisting. Colorado’s current governor, Jared Polis, has changed the state’s position from supportive to neutral. All this has made 2019 a fraught moment for the Western Slope’s corridor county. Western Slope officials argue angrily that it is not just their jobs, but their culture and values that are being tossed away,

“We can’t recreate our way out of the natural resource industry we have put ourselves into” with the existing tax structure, said Doug Monger, a commissioner of Routt County, speaking last month to a visiting group of state legislators specializing in energy issues. In the same meeting, Ray Beck, a commissioner in Moffat County, said the state’s government has launched “an onslaught of legislative and policy efforts aimed at destroying our way of life.”

The Oregon gas-export facility could change that. “We think the beauty of Jordan Cove is the long-term evening out of the boom-and-bust cycle,” said Kevin Batchelder, the County Manager in Garfield County, in an interview. “It would provide us a direct market to the Pacific Rim where there’s a lot of energy demand, particularly for cleaner energy like natural gas.” Half of the county’s spending money, he said, comes from taxes on natural gas.

From Dispensaries to Broadband: A Plan for Every Town

Town-level efforts to cobble together new economic options also receive county support, said Tom Jankovsky, a county commissioner. “Each community is unique and each community wants to direct the effort” for economic development, he said. “The county is a conduit for different economic development groups in different communities.” He said that Parachute, an oil and gas hub hit hard by the last bust, has added the marijuana industry to its playbook; it is now home to six dispensaries.

“There are a lot of sales off the highway,” Janovsky said. “From there the town has reached out to do more events — tourism, boat ramps on the Colorado River, a float business, renting ATV’s and Rzrs,” — two kinds of off-road vehicles. Internet access is also a big part of future economic development. “Broadband is essential,” he said.

The county’s broadband service is better than it was, with wired connections along Interstate 70. Batchelder, the county manager, said the county is finishing the design and engineering of a wireless system to connect 7,700 homes in remote areas, assuming that commercial internet service providers would provide the “last-mile” service by beaming wireless signals — an improvement, even though wireless service can be unreliable.

Extractive wealth versus tourism and perhaps new, innovative businesses? The debate is also playing out in Congress: the House is expected to pass the Colorado Outdoor Recreation and Economy Act, a section of which would ban future oil and gas leases in Thompson Divide, a hunting, fishing, and mountain-biking mecca west of Carbondale in the White River National Forest. County commissioners oppose a permanent ban.

“We’ve been having this discussion for a long time,” said Trési Houpt, a Democrat who is a former Garfield County commissioner and a former member of Colorado’s Oil and Gas Conservation Commission. Ms. Houpt, now retired, focuses on preventing the industry’s negative effects on human health, and on preserving environmental values, though she recognizes the industry’s past importance to the local economy. For the future, she said, “one of the most important industries that could continue to grow are those companies feeding recreation.”

The state legislature this year passed a bill that requires that permits for new gas wells must be considered with a primary emphasis on human health and environmental protection. But Garfield County’s point man on oil and gas, Kirby Wynn, points out “the permitting process has been vastly diminished. It’s slowed to a crawl, a standstill.”

If that continues, and Jordan Cove is never built, what can Garfield County do? The sun shines here about 300 days a year – should it build out more solar energy? The process has already begun in Rifle and other sites; government-owned projects generate 8,400 megawatt-hours of energy annually. Or will developers expand the second-home growth of towns like Carbondale and Glenwood Springs, which are bedroom communities for thriving ski resorts?

A worker installing solar panels on the Garfield County Fairgrounds Riding Arena in Rifle. Government-owned projects generate 8,400 megawatt-hours of energy annually in the County.   GARFIELD CLEAN ENERGY via Flickr

Connection Matters, But It’s Not the Only Thing

Mark Haggerty, an economist with Headwaters Economics, said airports and broadband are necessary preconditions for economic transformation, but are not sufficient to ensure it. “Innovation clusters,” he said, are “the real value in the new economy, where wages are high and … drive real economic growth..The problem is, nobody knows how to do that…. The kernel that starts those things is serendipitous.”

The kernel could be the rooftop turbine manufacturer looking at Silt. Or a new Bill Gates who seeks to live amid heart-stopping landscapes and might arrive with a world-changing business idea. Or an entrepreneur attracted by a workforce trained in an innovative education program.

Tinker Duclo, dean at Colorado Mountain College’s Rifle campus, has been trying to anticipate future needs and find the right mix of programs for CMC’s students. “The campus has had to pivot away from oil and gas training,” she explained. A few years ago, it had a program to train students to install solar panels, but students with CMC’s installer certificate could only get entry-level jobs that did not pay a living wage; the program ended. “To go deeply into solar, you have to be an electrician,” Duclo said.

Now the college trains students to perform locally-needed services: teaching, fighting fires, nursing. It is exploring curricula to mesh with the needs of the automotive, construction, and marijuana industries. For the latter, students could learn to grow and harvest hemp, extract fiber and oils from the plants, and become fluent in the industry’s legal requirements. “What is the workforce the future needs?” Duclo wonders.

Unclear. No-one has found the secret sauce that lets communities find and nurture the kernel of a new economy. For all the new things being tried, oil and gas employers remain the surest source of income. But Layman, the administrator in Silt, isn’t giving up. “I’ve been joking about putting up billboards in Silicon Valley,” he said.

But as much as he wants economic diversification, he fears his residents’ reaction if he finds a goose that lays too many golden eggs. “It’s sort of a two-edged sword. People here … like this part of Colorado the way it is. Simple, not fast-paced. They are holding back the tide.”

 

 

Edited by Geoff McGhee.

 

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