Oil and gas contractors scramble for housing in Garfield County

Click to Enlarge Browse and Buy Post Independent Photos A hotel under construction in Silt will soon house oil and gas workers on off days. Chad Spangler | Post Independent

By Pete Fowler
Glenwood Springs, CO Colorado
April 27, 2008

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A growing industry

• Initially focused mostly in Garfield County, gas production in the region grew from 179 billion cubic feet in 2002 to 421 billion cubic feet in 2006. • 1 to 2 trillion barrels of oil are thought to be locked in oil shale deposits in the Piceance Basin. • There are about 3,900 wells now in Garfield County, and the energy industry expects well development in the county will continue at around 1,000 wells per year for at least 10 years until there are up to 20,000 wells, by about 2023. Source: Associated Governments of Northwest Colorado, Northwest Colorado Socioeconomic Analysis and Forecasts

GARFIELD COUNTY, Colorado — Bob Guska finds it ironic that oil and gas work has, for some, reversed the old cliché of workers driving from western Garfield County toward Aspen.

With increasing natural gas activity over the past few years, workers book hotel rooms like crazy and scramble for housing from Grand Junction to Glenwood Springs. It’s all to drive to the gas and oil fields where they can expect the $75,000 a year or more. That money has lured employees away from all kinds of other jobs and even from other states.

Guska, a driver for Anchor Drilling Fluids USA, has been on the both sides of the commute. He’s driven about 45 minutes to work near Parachute from both Grand Junction and from Glenwood Springs. He used to own Budget Blinds in Glenwood Springs, but he moved to Florida and then back to work in the energy industry about three months ago. During that time, he’s stayed with friends and paid about $1,700 a month to live in a Glenwood Springs hotel with his wife before finding a decent apartment to rent. As he knows, it’s tough even in western Garfield County.

“It’s been absolutely horrendous,” he said. “What’s happened in Parachute is a lot of the companies have rented whatever is available and put three guys in a house.”

Living in a hotel in Glenwood and driving to Parachute daily, on top of 12 to 14 hour shifts five times a week, was a hardship. There was the bed, the microwave oven, the television, the small refrigerator and the long drive. It got expensive to eat out most of the time. Luckily, his patience paid off and he’s got a line on a rental in Parachute.

“Nobody likes to live in a hotel for months at a time,” he said. “You’re stuck in a bedroom, basically.”

The jobs are often very demanding. The biggest challenge companies face is finding housing for employees close enough to work so they can get enough rest, Guska said.

No vacancy
In towns like Parachute and Rifle, it takes a conscious effort not to sell every single hotel room to workers.

Mike Cross, manager of the Rusty Cannon motel, said rooms in Rifle started getting booked solidly about two or three years ago when oil and gas activity really started booming again.

“You can’t find a motel room in Rifle, Colorado during the week,” he said. “Everybody’s sold out.”

On Monday, work trucks and pickups lined the hotel’s courtyard. Many had license plates from other states, such as Texas, Wyoming, Utah, Oklahoma and Louisiana.

One out-of-state worker asked his child on a cell phone about what mom made for dinner. He waved jovially to someone on a balcony across the courtyard before entering his hotel room. Its door was flanked by small barbecue grills.

Carrie Belstra, general manager of the La Quinta Inn in Rifle, said the hotel operates at 98 to 100 percent occupancy every single night. Of those customers, she estimated around 75 percent are oil and gas workers.

“We try to hold back maybe 10 rooms to actually sell as walk-ins,” she said.

Belstra said the new hotel under construction in Silt, which she’ll be managing, has been approached by energy companies who want to sign a contract to rent all 80 rooms for two years.

“The biggest problem that we have is there is just no housing,” Belstra said. “The cost of living is so high here that people can’t move here. I’m losing help like crazy because people are moving to Grand Junction because it’s cheaper to live.”

She said oil and gas workers from places like Oklahoma, Texas and Louisiana are used to inexpensive housing. They think moving to Colorado and making $80,000 a year sounds great, but may not realize a “dumpy” one-bedroom apartment goes for close to $1,000 a month, Belstra said. Workers also don’t want to put down hefty deposits and sign long-term leases if the job might not last too long.

Annick Pruett, executive director of the Rifle Chamber of Commerce, estimated about 80 to 90 percent of the hotel and motel rooms in Rifle are booked by oil and gas workers.

“Probably every single room could be booked to energy,” she said.

Some hotels cater to the industry while some limit energy industry bookings to try to keep rooms open for travelers and tourists who may drop in.

“The good news is that there are more hotels coming into the area,” she said.

Apartments and housing haven’t kept pace with the influx of workers. Pruett said the demand wasn’t there until oil and gas activity exploded in the area and cities are trying to catch up.

Demand has stretched as far east as Glenwood Springs.

The Glenwood Springs Chamber Resort Association estimates that anywhere from 200 to 500 rooms out of 1,500 total rooms in Glenwood are occupied by workers. The demand boosts occupancy rates and lodging tax revenues but can drive up prices and decrease lodging availability to tourists. Kate Collins, vice president of tourism and marketing, said the estimate is based on anecdotal conversations with hotel managers and owners.

Sean Cronin, manager of the Quality Inn and Suites in Glenwood, said the hotel is about 20 percent full of workers — mostly in oil and gas. The hotel could fill its rooms with workers if it didn’t impose a limit, he said.

Thousands of contractors
The two largest oil and gas companies operating in the area employ at least 3,000 contractors plus hundreds of actual employees, mostly in Garfield County.

Contract workers typically come with drilling rigs rented by the companies. They go where the rigs go and might work somewhere for a few years then move to another location out-of-state. Many work a pattern of seven days of work at a time before seven days off. During the seven days on, workers often share the same housing and even bedrooms in places like Battlement Mesa and Parachute.

Susan Alvillar, spokeswoman for Williams Production, RMT, said Williams has about 200 employees and a contract workforce of more than 2,000. EnCana Oil and Gas spokesman Doug Hock said EnCana has more than 150 employees working for its Parachute office and as many as 1,000 contractors working in the field on any given day.

An April 11 report for the Associated Governments of Northwest Colorado says in 2006, there were about 6,300 jobs in Garfield, Moffat, Rio Blanco and Mesa counties directly related to oil and gas activity and numerous other supporting jobs.

There is no exact data available, but based on interviews, BBC Research and Consulting of Denver estimated that up to 30 percent of the 6,800 motel rooms and camp sites in Garfield, Moffat, Rio Blanco and Mesa counties are occupied by gas workers. But the figure is much higher in Parachute and Rifle.

“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 report states.

The report predicts oil and gas development will shift north from Garfield County to Rio Blanco County over the next 20 years. The number of new wells drilled in Garfield County will peak in 2015 fall to zero by 2030, the report projects. At that time, the population of Garfield County is expected to reach almost 120,000.