The last boom in the western Colorado economy came as oil prices approached and then cleared $100 a barrel.
By Gary Harmon
Oil prices again are forecast to hit the same milestone, but energy companies, rather than rushing back into the Piceance Basin, are looking elsewhere.
That’s not a situation that will last forever, though, industry observers said, forecasting a bright future for natural gas drilling in northwest Colorado.
Still, BJ Services said this month it is moving two hydraulic-fracturing crews to other fields, and a major Piceance Basin player, Exxon Mobil, said the company has “reduced our drilling tempo at Piceance, due to the business environment.”
Part of that business environment is the newfound interest in the Niobrara Foundation in eastern Colorado, where energy companies are moving to drill for oil, the stuff that’s now fetching $90 a barrel, with some experts calling for the price to hit $100 a barrel by summer.
“My members that are focused on the West Slope are pretty inactive now,” Colorado Petroleum Association President Stan Dempsey said.
The Niobrara, “that’s where a lot of the activity is happening,” Dempsey said.
The infatuation with oil won’t last, said Marc Smith, president of the Western Energy Alliance, which previously was known as the Independent Petroleum Association of Mountain States.
Eventually, the Piceance and other gas producers in the Rocky Mountain states will have a competitive advantage as other regions of the country use the natural gas they produce and need more, Smith said.
The Rockies fields are the only fields that export, and with the completion of pipelines to the east and west, they will be positioned well to meet new demands when they arise, Smith said.
“I know five or six different service companies that are bringing rigs back into the Rockies,” Smith said. Exxon Mobil remains optimistic about its holdings in the Piceance, spokesman David Eglinton said in a statement.