RIFLE, Colo.—The oil and gas boom has pushed western Colorado’s economy into overdrive but has also polluted air and water, damaged roads, overtaxed government services and scarred landscapes, local officials told lawmakers and industry officials on Tuesday.
“It’s a double-edged sword,” La Plata County finance director Karla Distel told an interim legislative committee studying the way the state spends severance taxes collected from oil, gas and other minerals.
Distel said the boom-and-bust cycle of the energy industry is often out of sync with local government revenue, and La Plata County was forced to cut millions of dollars from its budget just as demand for services increased.
She said the county is setting aside money to cover economic dips but eventually will have to raise taxes.
Jim Spehar, a former Grand Junction city councilman, said oil and gas resources are finite and counties need to plan for the future, especially those caught up in the energy boom.
“How do you have these communities prepared for a soft landing? This is a limited resource we’re dealing with,” he warned the panel.
Sen. Josh Penry, R-Fruita, said the current payments are unfair because they aren’t going to the communities that were promised help dealing with the impacts of the boom.
“There’s this cavernous disconnect for areas impacted and the distributions,” he said.
Panel members said money is going to other counties that have not been hit as hard, and they’re using it for swimming pools and recreation centers.
La Plata county commissioner Kellie Hotter told lawmakers that energy producers in her county paid $272 million in severance taxes over the past five years, but less than 1 percent of that came back to the county in direct distributions.
The distribution formula is based on where the oil and gas workers live, but she said many can no longer afford to live in the county.
Hotter cited other costs as well: five homes razed because of methane seeps blamed on drilling; vegetation destroyed; tourism hurt.
“Dead and dying vegetation from methane seeps is a devastating sight. What are the costs of a lost view?” she asked.
Dean Wingfield, a commissioner in eastern Colorado’s Yuma County, said oil and gas have been a boon to drought-stricken farmers they are lucky enough to have wells on their property.
He said the biggest impact has been to the county’s roads, which were not designed for the loads they now carry.
Demand for welfare and other social services has also increased, he said, citing people who travel to the area in hopes of finding work but fail.
“When some of these are found to be as unemployable here as from where they came, they do become a burden,” he said.
