According to a Bloomberg.com, Colorado is the nation’s fifth-largest producer of natural gas and ninth-largest producer of oil. In fact, the state’s oil production is now at its highest point in 55 years. The popular technique of horizontal drilling is largely responsible for this recent boom. Even in the last decade, the state has experienced exponential growth in oil and gas production. In 2002, Colorado was producing about 50,000 barrels of crude oil per day. In 2013, that number had increased to 156,000 barrels per day. Advancements in hydraulic fracturing have led to a record number of businesses applying for permits to drill. In 2009, there were less than 300 horizontal permits applied for, while in 2013 that number was well over 1,200. Interestingly, the Fiscal Times has reported that the Green River Formation in Northwest Colorado holds enough oil to satisfy the world’s oil needs for 100 years. However, the regions tighter rock formations make the cost of extraction extremely high.
The energy boom is causing considerable economic growth according to Stan Dempsey, president of the Colorado Petroleum Association. “When crude-oil prices are at these levels, companies are investing capital at an opportune time. This is good job growth for Colorado and it creates a strong economy.” Although many Democrats in the state legislature are calling for increased drilling restrictions, Governor Hickenlooper (Dem.), who holds a Master’s degree in geology, has opposed most of the measures.
According to a recent article in the Denver Business Journal, the oil and gas boom will create a boom in the construction industry as well. Oil and gas companies are hiring contractors for infrastructure projects and for building offices. The energy boom will likely create additional housing demands as well, which will help fuel the residential construction recovery. A Denver Post article from March 3, 2014 claims that public-works and residential construction starts doubled in 2013 when compared to 2009, and that construction job numbers have exploded. All of this positive data suggests that both the energy and construction industries are responsible for the economic growth and economic potential available in Colorado today.