Industrialization affecting Colorado

Geologist: China, India growth changing world energy markets

State geologist Vince Matthews said the ravenous appetite China and India are showing for energy and minerals will directly affect Colorado.

"China is growing at a much faster rate than the United States," said Matthews, who is the Colorado Geologic Survey director. "In 2005, they built 70,000 new supermarkets, and in 2006 they became the number three car manufacturer in the world."

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All of the industrialization comes at a cost to Colorado and America, as prices soar on not only energy commodities but on minerals as well, Matthews said Thursday night at the Northwest Colorado Energy Producers Association meeting.

While oil production is down in the U.S. after peaking in 1970, China's consumption is steadily increasing, with effects on a global scale and in Colorado.

"The decline in oil production has been reversed in Colorado," Matthews said. "But there will be serious consequences when the world can no longer produce the oil it needs."

Colorado holds large oil reserves near Rangely, and the richest and thickest oil shale reserves in the world lie northwest of Rifle.

Matthews said if U.S. production stays flat, all the new sources are coming from the Rocky Mountains.

Coal is also in big demand on the world market. China and India are importing 51 percent of the world's coal, and China is building a new power plant every three days, Matthews said.

Coal prices doubled between 2004 and 2005, he said, but Colorado's impact on coal production has reached its maximum level and is limited by transportation issues in moving the product to market.

"Colorado is a major producer," Matthews said. "The largest reserves of 'good' (low sulfur and low ash) coal in the U.S. are here."

Besides higher energy demands, increased industrialization worldwide has had impacts on the state's minerals as well.

Copper and nickel have seen more than 400 percent increases in costs since 2003, and the number of states experiencing shortages of cement climbs each year, with China consuming half of the world's concrete.

Potential impacts on Colorado, Matthews warns, include inflation and increasing shortages of critical raw materials, along with pressure to quickly develop natural resources in the state.

"In the future we are going to need every single energy source we've got," he said.

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