The Greeley Tribune
The Niobrara shale play that is booming in Weld County is spilling over into neighboring communities to the west and having a big economic impact.
Communities all along the Front Range – from Fort Collins to Brighton – are seeing sharp increases in the number of oil-related businesses and jobs.
There are at least 30 oil-related companies (excluding gas stations, convenience stores, etc.) that have sprung up in recent years in the Fort Collins/Wellington/Timnath area, according to yellowpages.com. Approximately 52 such firms have settled into the Loveland/Berthoud area while another 60 have located in the Longmont/Boulder/Brighton area.
And, most of them are reporting strong, rapid growth.
“We opened our plant in Loveland two years ago,” said Gail Meisinger, director of human resources for Leed Fabrication. “We bought 15 acres and started initially with a 22,000-square-foot building. We just expanded and added close to another 60,000 square feet. It’s a massive expansion.”
Meisinger said her firm, which produces wellhead production equipment and emission control devices for the oil and gas industry, has 110 production employees and 15 to 20 administrative personnel at the Loveland plant.
Most of that hiring, Meisinger points out, has been done since last September, more than doubling the original workforce. And, the hiring hasn’t stopped.
“We’re still struggling to fill jobs,” she added.
In addition, Leed Fabrication has offices in Brighton and Greeley.
Wellington-based machine shop 3J Inc. offers a similar story.
The small operation started five years ago doing most of its work with the U.S. Department of Defense. But, a year and a half ago, the firm began building flanges that are used for drilling operations.
“We have grown by 25 percent since then,” said Taylor Nguyen, the company’s quality control manager.
He says his firm, which has increased to 13 employees, now works closely with about five oil companies. That work comprises nearly half of the company’s overall production today.
Select Energy Services is another fast-rising player in the oil and gas support industry. The firm acquired Greeley-based Schneider Energy Services Inc. in early 2011. They quickly expanded to more than 600 workers from 100 with offices in Greeley, Brighton, Longmont and Fort Morgan.
“Our growth? It’s been extremely fast,” said Susan Redman, the company’s director of human relations.
Redman said most of the company’s employees in Colorado live and work east of Interstate 25, although the Longmont office has about 30 employees. The company is a provider of water-related solutions through its sourcing, transfer, hauling, well testing, disposal and treatment operations.
Besides the obvious economic impact of jobs and high-paying salaries, the oil and gas industry has a lot of indirect benefits for Front Range communities that often go unnoticed.
Betsey Hale, Loveland’s economic development director, recently took time to study all the benefits that were being felt by Loveland’s economy.
“I think what surprised most people was they didn’t think about what the indirect benefits were … things like hotels, restaurants, grocery stores, department stores … and all those jobs,” Hale said. “And, they certainly didn’t think about construction. Right now we’re at historic numbers of building permits (for housing). I think you’ll find the same thing going on in Windsor, Fort Collins and Greeley. All these workers need to live somewhere.
“We’re seeing, as a result, job growth in all sectors … health, doctors, dentists.”
According to the Colorado Department of Labor and Employment, the Fort Collins/Loveland metropolitan statistical area has seen a huge increase in jobs in the last year. Though not specifically carving out numbers for oil and gas operations, industry-affected job categories are growing. The mining, logging and construction industry has gained 300 jobs in the last year, according to February statistics. Leisure and hospitality grew by 1,000 positions, retail grew by 600 and professional and business services, into which the engineers and oil and gas support services could go, grew by 1,400 positions.
The Boulder/Longmont area saw slightly lower growth in those areas, but there was growth: 200 in mining, logging and construction; 500 in leisure and hospitality, and 400 professional, scientific and technical positions.
They’re not quite the numbers seen in Weld County, which includes southern Interstate 25 communities of Frederick, Firestone and Fort Lupton. There, the mining, logging and construction industry has seen a push of 2,200 positions; 700 in trade, transportation and utilities, which includes truck drivers, in high demand in the oil and gas industry.
Walt Elish, the president and CEO of the Northern Colorado Economic Development Corporation, while lacking hard statistics such as the ones Hale developed, readily acknowledged the impact of the oil and gas industry on Front Range communities.
“Oh, yes, it’s significant,” Elish said. “And, I think it will be that way as the oil and gas industry continues to grow … unless something stifles it.
“It (the oil and gas industry) is spurring our economy not as directly as it is in Weld County, but it’s still significant.”
While most of the employees working for oil-related companies are living in or near the cities in which they work, company officials say there apparently are no hard numbers to track just what the economic benefit has been to the housing and hotel industries.
Clint Skutchan, the CEO of the Fort Collins Board of Realtors, said there’s really no way to track that. While admitting that it’s logical to assume that these workers do buy homes and rent apartments in the communities where they work, it’s hard to separate that from the large number of people who come here to live, retire, work or go to school.
“The market here is tight,” Skutchan said. “It’s a desirable community that … brings in an influx of people. I imagine the impact might be a little greater in Loveland.”
Rob Proctor, the president of the Loveland Berthoud Association of Realtors, agreed.
“It’s probably there, but it’s really hard to split it up,” Proctor said of oil-related company homebuyers. “We get the full gambit. It’s just hard to say.”
The story was the same in Longmont.
But, one thing is constant in all three markets – oil and gas related companies have grown exponentially and the amount of available housing has dropped sharply, creating tight housing markets in all three cities.
For some communities, the emergence of these oil and gas related companies has been a godsend following the devastating recession years between 2005-2010.
Loveland is one of those.
“When Hewlett Packard and Agilent went away, we did not have the economic recovery equivalent (as in other communities) until oil and gas came along,” Hale said. “They downsized. Then oil and gas has come along and backfilled those losses. This is the economic recovery we’ve been waiting for the past 10 years.
“At one time (in the 1970s), Hewlett Packard was the economic driver in Loveland. Now, it’s oil and gas,” Hale said. “In fact, oil and gas, right now, is the economic driver of northern Colorado – if not for the whole state.”