Gas bonanza shakes dust from Western towns

April 11, 2005

By Todd Wilkinson | Correspondent of The Christian Science Monitor

PINEDALE, WYO. — Landscape painter Alfred Jacob Miller set up his easel on the shore of Fremont Lake 168 years ago and rendered one of the most famous romantic portraits ever made of the wild American West. Today, in the small ranching and tourist community that grew up around the venerated lake, motel rooms in Pinedale are sold out, but not from traditional tourists exploring the haunting Wind River range. The influx stems from an unprecedented invasion of oil-patch "roughnecks" creating a round-the-clock beehive of drilling rig crews, pipe layers, roadbuilders, and truck fleets. Indeed, tiny Pinedale represents ground zero in one of the biggest natural-gas booms in the postwar era. Driven by high energy prices and looser government regulations, it is transforming many of the small towns here along the rumpled spine of the Rockies - creating thousands of lucrative jobs, pouring money into local treasuries, and, as always happens with sudden growth, producing new problems ranging from traffic to drug use. "The US national energy policy is being played out on an epic scale in our backyard," says Ward Wise, the city manager whose folksy municipal attire is a pair of jeans, denim jacket, hiking boots, and a leather cowboy hat. "All of a sudden, our little rural town has come face to face with the hurricane force of the global energy market." In many ways, the continuous drilling of new wells outside Pinedale is just one example of an energy boom being played out across the American West. Oil and gas prices at record highs (until adjusted for inflation) and the opening of more public lands to development have brought small wildcatters out of retirement and attracted the usual assortment of Big Oil interests. In just the past year alone, the Bureau of Land Management (BLM) has approved 5,700 new drilling permits in Wyoming, New Mexico, Utah, Colorado, and Montana - an increase of about 62 percent over the previous year. But perhaps nowhere is the bonanza more evident, and the financial and social impacts more deeply felt, than here in Pinedale (population 1,400) the Sublette Countyseat. It currently has the second-lowest unemployment rate in the country and is a major reason why Wyoming is enjoying a massive budget surplus. As billions of dollars worth of gas is being extracted annually, output is expected to grow exponentially. At the current going rate of $5.75 per thousand cubic feet of gas, the spoils are the equivalent of oil companies planning to exploit a large untapped reserve of crude and counting on profitability at $30 a barrel yet to yield $90 a barrel. Already, some 3,000 wells reach deep into the Jonah Gas Field and Pinedale Anticline - yielding a billion cubic feet of gas a day - but three times that many wells are projected as part of a bonanza that geologists believe could last 40 years. The only thing that could cause a downturn, experts say, is a dramatic fall in gas prices. Reasons to stay in Pinedale "For the first time ever in Pinedale, good-paying jobs are available year round," says Janet Montgomery, the county assessor who has tracked the tsunami of tax revenue pouring in, most of it going to the local school district. She says it's not uncommon for gas field workers to earn $60,000 or more a year. Montgomery is also happy that young families have a reason to stay. A recent report found that Wyoming was third from last among the 50 states in its ability to keep residents aged 15 to 44 from leaving. "People used to have to work like the devil during the warm months to be able to survive over the winter," Mrs. Montgomery adds. "But now all kinds of businesses are able to stay open." Last year, $115 million was collected by Sublette County in taxes. Seventy-five percent of it went to schools but other town improvements include a new courthouse, a senior citizens' center, a library in Big Piney, an an indoor hockey rink, and an Olympic-sized swimming pool. According to Montgomery, the best way to quantify the richness of the gas is by real estate. Ten years ago, Sublette County had a total property asset evaluation of $262 million, but she predicts the total in 2005 will be over $2.5 billion, led by 10 energy companies that account for roughly 95 percent of the value in the form of gas reserves and equipment. "I would say that most people in Sublette County don't have any idea how much money is being made," says Mark Eatinger, who designs commercial and residential developments. Still, if you talk to any local residents in Pinedale, Big Piney, or Daniel, even boosters admit their communities reeling from the prospect of unstoppable change overtaking these Cowboy State versions of Mayberry. The same concerns are being expressed in the Powder River Valley of Wyoming and in neighboring states like Montana, Colorado, and New Mexico, where parallel booms are under way. The juggernaut in Sublette County, however, bears little resemblance to the stereotypical wildcatter frenzies of west Texas that made millionaires out of cowboy investors who flaunted ten-gallon hats and drove around in new Cadillacs and Mercedes. Most of the gas here is coming from federal lands administered by the Bureau of Land Management and leased to large multi-national companies, such as EnCana, ExxonMobile, BP America and Shell, with faraway corporate offices. Threats to small-town life Not long ago, Mr. Wise, who traveled the world in his younger days and also worked as a brokerage specialist in Denver, returned to his hometown, desiring to give his family a taste of a simpler life. He admits that for tourists passing through town, it might be hard to recognize any overt signs of a boomtown. But if you head south of Pinedale at night, you see the landscape, once dark, is lit up with a constellation of wellhead lights. Instead of being clear, sunsets glow red from haze. Even a local astronomer has complained of air pollution obscuring nighttime observation of the stars. The green light for gas development was actually granted by the Clinton administration. In 1999, an environmental impact statement completed by the BLM concluded that drilling would have negligible socioeconomic impacts. But with a dramatic upturn in gas prices, and an energy-focused Bush administration, the rush by companies to rapidly maximize production has overwhelmed local residents. Handling the boom It has spurred calls from community leaders like Mr. Wise, a third-generation Pinedalean, to slow down the pace so that planners can catch their breath. "The BLM should have helped us to better prepare," Wise says. "It's mind-boggling that the people who have permitted the gas drilling drilling claimed there would be no significant impacts. And now they're getting ready to turn it up another notch." BLM officials, in the agency's defense, have said they are only empowered to weigh and try to mitigate impacts on the tracts they oversee, even though their activities have spillover effects. They have no authority or expertise to tell communities how to handle a boom. Draft findings of a socio- economic task force report being delivered to the BLM and provided to the Monitor indicate that: • Wyoming counties with population surges because of energy development are reporting an increase in domestic violence and drug use. • Since 1997, traffic has increased sixfold on scenic US Highway 189. • Fire department calls have tripled in three years and ambulance calls rose 50 percent. • Skyrocketing property values and lack of affordable housing are making it extremely difficult to retain sheriff's deputies and public school teachers. • Recreational tourists, who have been important to the economy, often can't find hotel rooms because they're all taken by gas field workers. • Planners estimate that 1,000 new homes will be built (this in a county of only 6,400 inhabitants) in the coming years, marring the beauty of the Upper Green River Valley and fragmenting wildlife habitat. "I'm not opposed to energy development, but it needs to be managed in a smart, common - sense way," Wise says. "So far, that hasn't happened and the problems it is causing are huge." "Some people feel very strongly about trying to protect the intangible elements that shape a high quality of life in Sublette County and others are passionately invested in doing everything they can to promote the economy," says Carmel Kail, an archaeologist and the chairwoman of the socioeconomic task force. Ms. Kail says that although citizen discussion has been emotional and heated, people are reflecting on what kind of community they want to have in ways they never did before. Painted across a weathered brick building in downtown Pinedale is a mural depicting a line of cattle. The artwork is a fixture of local identity. Yet despite the enormous energy profits being pulled out of the ground, the scene itself is falling into disrepair. Seeing irony in that, Randy Carpenter a community planner with the Sonoran Institute says that Sublette County holds the potential to redefine what boomtime prosperity means while escaping the legacy of previous boom and busts Wyoming has suffered over the past century. "With all the wealth that's being generated here, Pinedale in 40 years should be the coolest, most desirable small town to live in the West," Carpenter says. "The only question is whether the opportunity will be seized or if it gets frittered away, leaving Sublette County more impoverished than it was when this all began."