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Natural gas in Wyoming | Boom and doom | Economist.com

http://www.economist.com/world/na/displaystory.cfm?story_id=9261736 (1 of 9)6/4/2007 4:31:47 PM

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United States

Natural gas in Wyoming

Boom and doom

May 31st 2007 | PINEDALE, WYOMING From The Economist print edition

Gas has brought riches, and trouble, to America's least-populated state

A FEW years ago, Pinedale seemed destined to become a summer retreat for the rich. Impressed by its Wild-West Main Street, and its spectacular position between three mountain ranges, buyers were snapping up second homes in the area. An interior-design store and a micro-brewery opened. Then the drillers and roughnecks arrived and the fate of Pinedale, together with other oil- and gas-rich parts of Wyoming, abruptly changed.

Pinedale is at the centre of a Rocky Mountain gas boom that began in 2000 and accelerated five years later after Hurricane Katrina knocked out Gulf supplies, forcing up prices. On a mesa south of Pinedale, Wyoming's busiest field is laced with dirt roads and pock-marked with well-heads and drilling rigs. Questar, one of several exploring companies, has 199 productive wells, says Kevin Williams, the district manager. It plans to drill about 1,000.


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The boom has swelled the population of Sublette county, which grew by 24% between 2000 and 2006, faster than anywhere else in Wyoming. Count the man campstrailer parks where itinerant gas workers collapse, exhausted, at the end of long shiftsand it has increased by about 40% since the boom began, according to Jeffrey Jacquet, an analyst. With barely 7,400 permanent residents, Sublette is still one of the least densely populated counties in America. But it already strikes locals as too crowded. You don't live in Wyoming because you want to be sociable, explains Freddie Botur, a rancher.

Government budgets have inflated even more quickly. In 2001 Sublette county raised $16m in sales and other taxes. Last year it took in $53m. Property-tax revenue, all but 3% of which derives from mining companies, went up by 50% between 2005 and 2006. The torrent of money is likely to slow, thanks to a ballot initiative passed last year that will force resource-rich counties to share more of their loot with poorer parts of Wyoming. But plenty will be left over. Next year Pinedale's school district will pay newly qualified teachers a base salary of $43,000about the same as in Chicago.

Teachers nonetheless earn less than rig hands, most of whom have no more than a high-school education. They are paid at least $49,000 plus overtime, according to a survey last year. The ready availability of well-paid work, albeit hard and dangerous, means that unemployment has almost disappeared (see chart). So have seasonal fluctuations. Jobs used to disappear when the snow fell. But the gas rigs now keep going through the winter.

So tight is the labour market that the economy of western Wyoming is suffering a first-world version of the resource curse. High wages and property values mean it is difficult to start a business in the area, or even to maintain one. Mr Jacquet describes the parts of the economy not directly linked to the gas business as in paralysis. Indeed, between 2001 and 2006 the number of retail and entertainment outfits in Sublette county fell even as disposable income soared.

Maggie Palmer, an estate agent, says that houses near the gas field have become much more expensive. But grander properties in prettier, more remote places have hardly increased in value. What really irks the locals, though, is the boom in crime. The shift pattern favoured by the gas industry (12 hours on, 12 hours off, for two weeks, followed by a fortnight's break) encourages the use of stimulants, including methamphetamine. It also leaves time for drinking and fighting in local bars. Jim Whinnery, the under-sheriff, says that gas workers are responsible for less crime than local rumour would suggest. Yet the number of arrests in Sublette county, which has almost quadrupled since 1995, closely tracks the rise in the number of rigs.

For all the problems it has brought, the most serious threat posed by Wyoming's gas boom is that it will end. The Rocky Mountains are littered with ghost towns that were once thronged with men mining silver, lead or uranium. And if the price of gas falls so far that drilling becomes unaffordable, Pinedale will not just lose the backbone of its economy. It will have lost some of its natural beauty, too.

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