It's hard to imagine anything quite as dismal on a sunny winter weekday as a bus ride to Greeley to examine oil and gas wells with the Colorado Springs city Oil and Gas Committee. Nice folks, one and all — but I wanted to go for a bike ride!
The committee, led by indefatigably cheerful City Councilor Val Snider, had scheduled the tour to see how Greeley has dealt with challenges created by the explosive growth of the drilling industry in the past 30 years.
Greeley's geology differs from that of Colorado Springs. Shallow, low-production wells have been part of the landscape of Weld County for decades, but higher market prices and new drilling techniques have led to explosive growth since the 1990s.
Today, Greeley and Weld County are firmly in bed with the oil and gas industry, just as Colorado Springs is firmly in bed with the military. Twenty percent of Greeley's tax revenue comes from the industry, as does 40 percent of the county's. The numbers are staggering. Within Greeley's city limits, there are 400-plus wells, and in Weld County, approximately 18,000.
Such figures seem to suggest that the whole area is a grim industrial wasteland, a ruined landscape of derricks, pipelines, wellheads, separators and tank farms.
That's not the case. Greeley and the surrounding countryside haven't much changed. Greeley still smells of livestock, the quaint old downtown is still quaint (many buildings have been attractively renovated), and the rolling farmland is still intensively cultivated. So where are those 18,000 wells?
They're mostly invisible, just a few pipes rising from the ground, maybe a low-slung circular tank or two, and that's it. We passed by dozens of them as we approached Greeley, and my first impression was that they were water wells feeding center-pivot irrigation systems.
Like Colorado Springs, Greeley was once a center of high-tech manufacturing. We stopped at a vast, vacant microchip plant on the outskirts of town. Behind it, a couple of acres had been redeveloped as a well site. Thanks to directional drilling, multiple wells drew in oil and gas not only from the formation directly below the wellheads, but from thousands of feet surrounding the site.
There wasn't much to see — just a low-slung tangle of pipes, gauges and small-scale machinery. It was neither noisy nor smelly.
At Greeley's city museum, a splendid 1920s building that once housed the Greeley Tribune (note to Matt Mayberry at the Pioneers Museum: Want to move to the Gazette building on Prospect? I thought not ...), we listened to Greeley Mayor Tom Norton and County Commissioner Sean Conway.
As one of the committee members said afterward, "They've sure drunk the Kool-Aid!"
Did they like the industry? They loved it! Sure, there had been a few problems early on, when the city obstinately denied a land use permit to a company that wanted to drill next to an elementary school, but they worked through their differences.
How? The company sued the city, the case went to the Colorado Supreme Court, the court ruled against the city, and the city paid the company $500,000. As Norton and Conway explained, they learned a lesson: The law was on the side of the drillers.
The city could not so regulate the industry as to effectively prevent drillers from extracting the oil and gas to which they had a legal right. What Greeley has done is create reasonable parameters for drilling, development and extraction, requiring noise abatement when drilling, post-drilling landscaping and appropriate site selection.
So now it's all sweetness and light. While the actual drilling process may be noisy and disruptive, it only takes a few weeks — and after that, the results flow silently to the company, are converted to money, and some of the money flows back into the coffers of local government.
Won't the boom end, as all booms do? And won't local governments be caught short when it does, just as sales tax-reliant Colorado Springs was when local retail sales plummeted?
Norton and Conway claim that all will be well.
"We've got a $40 million rainy-day fund," Norton says. "And we're growing it."
Pretty impressive, for a city of 93,000 souls. But thanks to the Niobrara shale, which underlies Weld County, the boom may go on for quite a while.
Anadarko Petroleum already has a substantial presence in Weld County, with bigger plans for the future. In the next five years, according to Norton, Anadarko plans to invest $7 billion (yes, billion!) in Weld County exploration and development. Noble Affiliates, another national firm, is a distant second, at a mere $3 billion.
The Niobrara underlies much of El Paso County and our Banning Lewis Ranch as well, so who knows? Maybe we'll have a Greeley-scale boom! Maybe we can weather the coming contraction of our military base, and even prosper! Just as gold brought us prosperity a century ago, maybe oil will bail us out of our current difficulties!
Maybe — but Collin Richardson has his doubts.
I asked Richardson, VP for operations of Mineral Resources, a Greeley-headquartered oil and gas producer, what he thought of Banning Lewis. He shook his head.
"I wouldn't go there," he said. "That's a very expensive, risky play. We're just a little mom-and-pop company — we'll just stay here in Weld County. We're comfortable with what we know."
How much, I inquired, does Mineral Resources plan on investing in Weld during the next five years?
"About $300 million."
Some mom-and-pop ...
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