Energy industry slowdown illustrates need for diversity
One doesn’t have to look far to see the positive developments that have occurred in the Grand Valley in the aftermath of the energy boom. Since 2000, energy exploration and development have brought in extra dollars to build highway infrastructure, whole new retail developments and a housing boom that lasted until 2009 — not to mention all the philanthropic contributions made by many of the energy firms located here.
Energy development hasn’t been the only driver, but it has been the most prolific and constant driver in the Grand Junction economy over the past 12 years. But, as they say, good things don’t last forever.
The word in the industry is that many of the drilling rigs we’ve watched in operation over the past 12 years will be idle for the winter season. Natural gas is a commodity, and commodity prices rise and fall. The natural gas industry is experiencing the results of the atrophy in natural gas prices over the past few years.
Perhaps the first to see this initial decline in energy development are the few commercial and industrial real estate brokers whose livings over the past 10 plus years have been made primarily by serving those companies in the energy industry in Western Colorado. My survey of these brokers elicited various responses, but there also was a common theme: the short-term correction in natural gas pricing could have long-term effects on our local economy.
The brokers were asked how much of their commercial and industrial real estate business was related to servicing companies involved in energy exploration — now and five years ago. The responses varied from 90 percent five years ago and 10 percent today to very little five years ago and 50 percent or more today. In spite of the latter reply, most commercial brokers said their business and business income has declined up to 80 percent from where it was five years ago, and most of that’s tied to the slowdown in the energy sector.
It’d be interesting to survey retail businesses and commercial service companies in the valley to see what effect the slowdown in energy exploration has had on their businesses.
As we all know, it’s all about jobs — the jobs energy companies bring to the community and the trickle-down effect of additional job creation because they’re here. Regardless of how you feel about natural gas drilling and energy development, the positive results in building community infrastructure and providing jobs are irrefutable.
We’re all told continually the energy business is here to stay. There are enough existing wells to service and enough demand for present natural gas and natural gas byproducts to continue to employ many individuals. But the excitement of new discoveries and the investment of millions of dollars to extract those resources seem to have passed.
Now appears to be the time to remember and appreciate the positive things our community has built as a result of the past exploding job market. It also could be a good time to consider how future job growth could be channeled into additional community benefits. The situation is reminiscent of the old bumper sticker from 1984 that pleaded “Dear Lord, please give me one more boom, and I promise not to piss it all away.”
There’s never been a better time to support and promote industry and job diversity than right now. I hope that we, as a community, see the benefits of promoting and supporting the work of the Grand Junction Economic Partnership. It’s economic diversity that will drive this community and provide steady jobs well into the future.