Steamboat Springs Yampa Valley Data Partners’ new economic analyst wrote about the future of the region’s energy production in the organization’s April newsletter.
Brandon Owens has a history of energy-related data work, including with Cambridge Energy Research Associates and the National Renewable Energy Laboratory.
In the newsletter, Owens covers the three main energy sources in the Yampa Valley: coal, oil and natural gas.
Owens wrote that fluctuating prices, changing technologies and an uncertain environmental regulation outlook have put the valley’s energy production in flux similar to how the same factors have affected the national environment.
These factors will keep the Yampa Valley’s energy production in flux beyond 2013, according to Owens.
The drop in Yampa Valley coal production in the past few years is expected to stabilize in 2013 despite persistent low prices for natural gas, Owens wrote.
Peabody Energy ramping up production at the Sage Creek Mine will supplement Twentymile Mine, which accounts for 60 percent of the region’s production.
“Sage Creek has 110 million short tons of coal reserves, and owner Peabody Energy has signed a 16-year agreement to supply the Hayden coal-fired power station with Sage Creek coal,” Owens wrote.
The outlook for oil in the Yampa Valley is positive as two emerging oil fields grow.
Horizontal drilling techniques have increased production in the Niobrara formation, and the Waddle Creek formation also has seen growth in the number of barrels it is producing per year. Continued high prices for oil and expanded hydraulic fracturing in Moffat County should extend this trend.
“Look for even higher levels of oil production in the Yampa Valley in the coming year,” Owens wrote.
“The same drilling techniques that are available for oil production are also suitable for natural gas production,” he wrote. “In this manner, natural gas has been the beneficiary of drilling technology improvements.”
However, Owens explained, the market for natural gas is more regional than the oil market, and exploration is sensitive to falling prices caused by a glut in supply
“Yampa Valley’s natural gas production has oscillated in response to changing natural gas prices,” Owens wrote.
To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com