Glenwood Springs feels effects of natural gas development

By Heidi Rice
Glenwood Springs, CO Colorado
April 23, 2008

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GLENWOOD SPRINGS, Colorado — Gas wells don’t dot the landscape around Glenwood Springs like they do in the western part of Garfield County, but the effects of natural gas development are still heavily felt by the city — mainly through lack of housing and workforce labor.

Results from a socioeconomic study commissioned by the Associated Governments of Northwest Colorado and supported by the Colorado Department of Local Affairs were released on April 11. The study analyzes the effects and forecasts future impacts of the natural gas industry in the four-county region of Garfield, Mesa, Rio Blanco and Moffat.

The Northwest Colorado Socioeconomic Analysis and Forecasts study was prepared by BBC Research & Consulting of Denver.

“Northwest Colorado is in the first decade of an extraordinary period of challenges, risks and opportunities,” the executive summary of the study states. “As the focal point of one of the largest ‘gas plays’ in North America — as well as the center of potential U.S. oil shale production further in the future — economic activity in this mostly rural region is rapidly expanding.”

The study identifies the natural resource industry as a major economic driver in the area that has dramatically increased the costs of local housing and labor.

“Housing affordability issues, once considered a challenge of resort areas only, have become one of the study area’s most pressing problems, particularly given the influx of young gas workers and the difficulties many businesses have in finding workers,” the study says.

Glenwood Springs Mayor Bruce Christensen agrees.

“The impacts Glenwood Springs is feeling are fairly significant,” Christensen said. “We have an extreme workforce shortage particularly in the service industry. And we have a severe shortage of workforce housing.”

Christensen said the last information he received was that one-third of the city’s hotels were being occupied by gas workers.

City Manager Jeff Hecksel said he’s heard stories of different gas workers sharing the same bed in a motel room while working different shifts.

“One person would use it after his shift and a guy on another (opposite) shift would use it after his,” Hecksel said. “There’s a shortage of beds.”

However, the shortfall does not seem to be adversely affecting the city’s tourism numbers, according to Marianne Virgili, president and CEO of the Glenwood Springs Chamber Resort Association.

“We know it does affect our tourism, but we don’t know to what extent,” Virgili said. “So far, we’re not having any trouble. Our tourism numbers are off the chart. Between Memorial Day and Labor Day, we’re getting an 80 percent occupancy rate mid-week, and on the weekends we’re full.”

Virgili agreed that there are motels renting to oil and gas workers, but said they typically work for two weeks and then go home for a couple of weeks. She also pointed out that many of the gas workers lived in the western part of the county and came to Glenwood Springs for recreation.

But Garfield County can likely expect to continue to see impacts from the oil and gas industry in the future as gas drilling activity is expected to increase through 2015 and then remain stable at least through 2035, according to the study.

“Over time, more and more of the gas-related jobs in the region will be tied to maintaining and reworking existing wells,” the study says. “There are currently about 7,500 operating wells in the region. Even with stable drilling activity, an estimated 50,000 additional wells may be drilled over the next 30 years. Barring unforeseen changes in the national supply and demand for natural gas, the industry will provide a long-term supply of jobs.”

High-paying jobs that will likely continue to draw from the local supply of workers throughout the county.

“I think we’re feeling the same impacts that the west end of the county does,” Christensen said. “Not so much traffic, but the workforce shortage is our biggest impact. Along with the lack of workforce housing, we have a severe labor shortage."