Commissioner advises government caution concerning oil and gas production
September 9, 2011
Mesa County Commissioner Craig Meis, one of the featured speakers at Wednesday night's Northwest Colorado Oil and Gas Symposium in Hayden, described oil and gas activity in Colorado as volatile.
The Community Agri-cultural Alliance and Yampa Valley Partners hosted the event, which included more than 150 area landowners, industry representatives and elected officials.
Meis cautioned the audience not to become too caught up in the revenue stream associated with oil and natural gas production.
Using his own county as an example, Meis described how oil and natural gas production has affected the assessed value of Mesa County over the years.
Because of the production in Mesa County, Meis said the county's total assessed value has grown exponentially in the last decade and a half.
In 1996, Mesa County's total assessed tax value was $583.2 million. By 2010, the county's assessed value had grown to $2.3 billion as a result of oil and natural gas activity, he said.
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"Those numbers show just how big of a tax generator the energy industry can be," Meis said.
But, looking at those two bits of data doesn't paint an accurate picture of the volatility in the energy market because Mesa County has experienced a sharp decline in energy revenue in the last year, Meis said.
Meis said oil and gas production declined in Mesa County by 37 percent between from 2009 to 2010.
In contrast, Moffat County is at the beginning of a potential oil and gas surge.
Moffat County Comm-issioner Audrey Danner said the local economy has always been energy-driven.
"I've been here since 1979 and have witnessed the cyclical nature of the energy industry, primarily in regards to coal and utilities," Danner said. "Oil and gas move quickly where coal has been a stable mineral in the county."
Numbers support Danner's opinion.
In 1996, the assessed value of Moffat County was $317.4 million.
By 2010, the value had grown to $473.3 million with more than 11 percent of revenue coming from natural resources.
Meis conceded Mesa County has benefited from energy industries, but also emphasized the importance of communities being prepared for periods when oil and gas production slow down.
"I don't want to paint this horrible picture of the energy industry," he said. "But, when the rest of the country started to feel the effects of the recession, our oil and natural gas activity was really beginning to grow.
"In regards to workforce, we were growing, growing, growing. When the downturn started to effect us late in 2008, we found ourselves with all of these people who had moved to Mesa County to work."
At the beginning of 2008, Mesa County's unemployment rate was around 3 or 4 percent. Currently, unemployment is 10 percent and the county spends $2.2 million a month in food assistance for struggling residents.
"That is a phenomenal figure," he said.
Unlike Mesa County, where oil and natural gas production appears to be trending downward, Moffat County seems poised for a significant increase in energy production.
"It's difficult to compare my county with Moffat County," Meis said. "Moffat is very rural, where we have the largest metropolitan area between Denver and Salt Lake City.
"If I were to give Moffat or Routt counties advice based on the lessons we've learned in Mesa County, it would be to use the revenue stream from oil and natural gas for capital construction and not projects that require long-term operations."
"We may have an amazing opportunity here in Moffat County," she said. "It is important that we plan for it properly and maximize the opportunities for the county.
"I agree with Craig about the need to assess what the future may bring, the importance of infrastructure and preparing for the volatility of oil and natural gas."
Joe Moylan can be reached at 875-1794 or firstname.lastname@example.org.