Huerfano County
When the fizz goes out of carbon dioxide production, this county’s economy may go flat.
Or flatter, perhaps. Like many parts of rural Colorado, Huerfano already is struggling to hang on.
For 25 years carbon dioxide has been the glue helping hold the local economy together. Yet this major extraction industry – recovery of naturally occurring COb from underground wells – is in steep decline.
“Carbon dioxide is what has saved this county, but it looks like it’s really starting to drop off,” said Huerfano County Commissioner Roger Cain.
Not that anybody expected the COb to last for centuries. Although Colorado is the nation’s largest producer of natural carbon dioxide, the 4,000-foot-deep deposits have a finite production life.
The produced COb is shipped via pipeline to the Permian Basin in west Texas. It then is pumped into declining oil wells to help push the remaining petroleum up to the surface.
But when the carbon dioxide wells under Sheep Mountain ultimately stop producing and the 408-mile pipeline to Seminole, Texas, goes dry, Huerfano County is facing a bust after which officials have no good contingency plan.
Nobody – not even plant operator BP, formerly British Petroleum – knows exactly when the COb will stop bubbling up. But statistics paint a bleak picture.
Sheep Mountain’s production peaked at 287 million cubic feet per day in 1988, but now has dwindled to 37 million cubic feet per day, according to Larry Nugent, operations supervisor at the $300 million facility.
At its peak, the plant produced enough carbon dioxide to stimulate about 57,000 barrels of oil production each day in the Permian Basin. Now, COb output is enough for about 7,400 barrels of oil.
Cain and fellow commissioner Scott King recall the boom days of the early 1980s when a workforce of about 200 built the pipeline and the sprawling, 15,600-acre carbon dioxide complex at Sheep Mountain, 35 miles northwest of Walsenburg.
Stores and restaurants exploded with customers. Motels were filled to the max. Walsenburg’s Main Street hummed with vitality.
At sleepy Gardner, a town of 250 people on the Huerfano River north of Sheep Mountain, the facility brought a surge of business to Mandella’s bar. Workers packed the place every day for breakfast, lunch, dinner and drinks.
But Mandella’s restaurant closed a few years ago, and the lounge is barely surviving. Owner Ann Hudson said the bar’s sales have plummeted from $20,000 a month during the boom times to $2,755 last month.
Even after the construction workforce left in 1983 and the facility’s permanent workforce leveled off at about 10, carbon dioxide built a legacy as the main property-tax generator for Huerfano County.
“At the high point, that operation accounted for 50 percent of our assessed valuation,” King said. “It’s tough when a county has to rely so much on one source of income, and now it’s fading.”
Huerfano County’s property tax revenue from oil and gas – almost all of it from carbon dioxide production – peaked at $2.8 million in 1989. That made it possible for the county to issue bonds for the $13 million hospital and veterans’ nursing home built west of Walsenburg in 1995.
“We probably couldn’t have passed that bond issue without the COb facility,” said Ed Ludvik, owner of Ludvik Propane Gas and former chairman of the hospital district.
But now carbon dioxide property-tax revenues have declined to $591,000, representing 30 percent of all county revenue.
Services have been cut back, notably in the sheriff’s department, where six deputies represent half the staffing level of the 1980s.
The boom-to-bust scenario is reminiscent of earlier in the 20th century when Huerfano County was a coal-mining center and its population burgeoned to 17,000 in the 1930s.
The coal economy was still running strong in the 1950s and ’60s when King recalls that Walsenburg had five auto dealerships and Sears, J.C. Penney and Montgomery Ward stores.
Today, the dealerships and department stores are gone. One by one, all the coal mines have closed and the population has fallen back to 7,850. Nine empty storefronts leave visible gaps on Walsenburg’s eight-block Main Street.
BP’s Nugent hopes to keep carbon dioxide’s economic stimulus going as long as possible.
“We get a lot of people asking us how long we’re going to be around,” he said. “All I can say is that we’re going to keep it going as long as we can.”
Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.
