01 July 2013

The Black Gold Behind Weld County's Rodeo Fascade

Weld County, Colorado identifies as a farming and ranching county that celebrates that heritage with the annual Greeley Stampede, a major stop on regional rodeo circuit.  But, property tax rolls there tell a different story.  According to a Colorado Public Radio report that I heard this morning, just 2% of the property values in the county are agricultural.  About 55% of the county's property values are attributable to oil and gas property.  Some of the biggest components of its "real economy", however, at the public schools and CSU, are tax exempt.

Abundant oil and gas drilling (in many cases through the controversial technology called fracking) gives Weld County the fourth highest aggregate property valuation in the state, despite ranking far lower in population and having a generally working class non-oil and gas economy made up of a mix of long distance bedroom community commuters, slaughter house workers, the non-flagship Colorado State University, and a main street that has been updated much since the 1950s.

Not all of this oil and gas wealth is purely a result of being lucky enough to have those natural resources in its boundaries.  Weld County has welcomed oil and gas development where many of its peers have resisted it.

The county's abundant oil and gas revenues relative to its population is also more important than grit and country values in explaining how the governments in the county have managed to maintain little or no public debt.  While Weld County and its school district aren't in a regulatory position to retain its ample oil and gas wealth to stockpile cash for the future as Alaska and most oil rich national governments do in sovereign wealth funds, it can at least mirror that kind of behavior by keeping public debt at levels far lower than its local government peers elsewhere.  The realized preference of governmental leaders almost everyplace that oil and gas exploitation is an important part of the economy in every part of the world to horde those revenues demonstrates the reality that the oil age is temporary and that Peak Oil is a reality that will hit in a matter of decades if it hasn't already.

The doomed movement of Northeast Colorado to secede from the rest of Colorado has been sold by the region's Republican politicians as a way to allow conservative values and morality to prevail in the face of an increasingly blue state overall.  But, the movement has economic foundations that have as much or more to do with these aspirations which flow from a deep understanding among politicians that a separate state of Northeast Colorado wouldn't have to share its oil and gas wealth with the rest of the state.

The trouble with that attitude is that while the oil is in Weld County and can't be offshored, much of the wealth from that activity is realized in skyscrapers in downtown Denver like my own where most of the floors of the thirty-two story building are leased by oil and gas companies.  Denver may have almost no oil and gas properties on its property tax rolls, but it realizes a lot of the state's oil and gas wealth anyway.  Regardless of where the oil and gas are actually located, the exploration, financing and management of that resource in the United States is handled in major cities, not in small town America.

1 comment:

Dave Barnes said...

Surely you meant Fa├žade