Many longtime Colorado folks can identify with mythical
hillbilly characters that go from rags to riches as oil begins
bubbling up out of the ground on their property. They have had
reason to hope. But they also know about the flipside of boom and
bust.
Twenty-three years ago, the young, busy, not-so-little town of
Parachute died one night in its sleep. In what is still called
“Black Sunday” on the western slope, Exxon pulled the plug on its
$5 billion Colony shale oil project in Garfield County and laid off
over 2,200 workers on May 2, 1982.
Now, with oil prices over $65 per barrel and an estimated 1.5 to
1.8 trillion barrels lying around in Green River shale deposits
that are mostly in Colorado, it seems sort of interesting again.
Especially, given the fact that new technology may allow recovery
at about $30 per barrel.
Shell has been working on an in-situ process that involves
drilling holes, inserting heaters and slowly extracting oil out of
the rock at its Cathedral Bluffs property in Rio Blanco County for
the past five years with promising results.
Of course, we have seen the boom before. With gold, with silver,
with uranium, and even with oil and natural gas several times.
Colorado was the second state to produce oil commercially and has
usually resided in the top 10 states in terms of production over
the years, according to “Historical Atlas of Colorado” by Thomas J.
Noel.
“Commercial use began when Alexander M. Cassidy developed an
‘oil spring’ near Florence in 1862,” writes Noel. “To exploit the
Florence Field, Cassidy formed a firm that evolved into the
Continental Oil Company, or CONOCO. Headquartered in Denver until
the 1930s, CONOCO inadvertently erected the first Colorado Gas
station in 1909 when two large hot-water boilers were put on a
warehouse platform with gas to fuel autos.”
The Florence Field, a few miles south of us, continues to
produce as it has for over a century. In 1901 rich fields were
found near Boulder and Rangely. The Wellington Field near Fort
Collins opened in the 1920s along with the Moffat Field south of
Craig. Then in the 1970s, after the 1973 Arab oil embargo, domestic
crude soared and made the first billions for well-known Colorado
tycoons like Phillip Anschutz and Marvin Davis.
But as we know all too well, mineral prices travel both
directions – up and down. In 1979, crude oil by the barrel was $42
and nearly everyone in the world saw its price going only upward,
thus time for a $5 billion investment in “burning rocks” from the
Green River basin. By 1983, oil prices had dropped like a stone to
$9.
According to a story by Gargi Chakrabarty in the Sept. 21, 2005,
Rocky Mountain News, “A year after Black Sunday, property
foreclosures in Grand Junction and Mesa County were more than four
times their 1980s numbers, and bankruptcies had doubled.”
Hillbilly dreams or not, it is something for us Coloradans to
think about. As Mother Teresa once noted, “To keep a lamp burning
we have to keep putting oil in it.”
Rob Carrigan (rcarrigan@ccnewspapers.com ) is a third-generation
Colorado native and publisher of the Courier, Gold Rush and
Tri-Lakes Tribune.