Uinta Basin residents deridingly called it "The Strip" - a classic late-1800s boomtown that teemed with saloons, gambling halls and brothels tucked beyond the reach of law near the Uintah-Duchesne County border.
Passers-by likened The Strip's bawdiness to San Francisco's infamous Barbary Coast - a comparison that horrified Utah's religious and political establishment at the time.The Strip was, quite simply, an oasis of vice for soldiers, teamsters and waves of gilsonite miners, all of whom poured into the Uinta Basin in what would be the region's first rush to harvest what seemed to be a limitless supply of hydrocarbon resources.
It would not be the last.
In fact, the history of the Uinta Basin is defined by cycles of economic boom and bust, virtually every one of them linked to the nation's demand for hydrocarbon resources. First gilsonite, a tar-like substance used for asphalt and oil paints. Then oil and natural gas.
More so than any other region of Utah, the Uinta Basin - home to one the richest reserves of oil and natural gas anywhere in the world - is the epitome of boom and bust economics. When demand for petroleum resources is high, good-paying jobs are plentiful, businesses are bustling, and a flood of tax revenue fuels the construction of roads, schools and government buildings.
When the market goes bust, the unemployment soars to double-digits, Main Street businesses are abandoned, people by the thousands pull up stakes and local governments are crushed by a demand for services that far exceeds dwindling tax revenues.
It's the way it's always been in the Uinta Basin. And economic development experts say it is a situation unlikely to change much in the years ahead.
All eggs in one basket
"The difficulty here in the Uinta Basin is we've had all our eggs in one basket," said former Uintah County Commissioner Max Adams, who now heads economic development for the Ute Indian tribe. "When oil and gas is active, we feel pretty good about ourselves. When oil and gas becomes less active, it hurts us badly."
Local officials have recognized for years the need to diversify into other economic arenas like manufacturing and specialized agriculture. But it's one thing to talk about it and yet another to do something about it.
It's even harder when you have no freeway or railroad to transport what it is you produce. Consequently, over the past 15 years the region has seen little growth in business sectors not directly or indirectly related to oil and gas development.
There are positive signs. Unemployment rates have dropped from the double-digit highs of the late 1980s (to 9.3 percent in Duchesne County and 7.1 percent in Uintah County in 1995), but they remain twice to three times the state unemployment rate. And much of that decline is attributed to people leaving the region, not to an increase in jobs.
The economy is growing slowly, "but at least it is steady growth," Adams said.
That is also evident in the region's population, which is just now approaching what it was a decade ago - the end of the last boom cycle.
Fire in the Hole
For good or bad, the Uinta Basin remains seduced by its hydrocarbon economy. State geologist Lee Allison, for one, argues that it is not necessarily a bad basket into which the region could put its economic eggs. Never mind that oil production has fallen by 50 percent since 1986.
"The richness of the reserves, the natural resources out there are unbelievable, and they will always be a significant part of the economy for decades to come," he said. "There is no avoiding the fact it is one of the richest oil basins in the world, and those resources are still going to be there 10 and 15 years from now."
The Utah Geological Survey estimates there are at least 1.5 billion barrels of recoverable oil in the Uinta Basin; to date, less than 400 million barrels have been recovered.
In addition, there are 6.5 trillion cubic feet of natural gas. The tar sands in the region, if developed, could produce 11 billion barrels of oil at a minimum, perhaps as much as 29 billion barrels. And there is enough oil in the oil shale there to produce 1.3 trillion barrels (in some places as much as 1 billion barrels per square mile).
A technological solution
Allison said the real key to the region's economic future is the technology behind developing those resources. Even though only 5 percent of the region's oil has been extracted, the oil wells to date have targeted the "easy" oil that can turn a quick profit.
"What we have seen is companies starting to walk away from wells because they are not economic, leaving behind 95 percent of the oil in the ground," Allison said. "And once a well is abandoned, it is unlikely it will ever return to production. And once the easy oil is out of the ground, it is hard to justify drilling new wells in old fields."
That problem, which is common nationally, has prompted the Department of Energy to work with states and the petroleum industry to develop new techniques to recover more oil from the existing fields.
One project with the University of Utah and Inland Resources involves injecting water into the underground well to flush oil into locations it can be recovered economically. Inland has been so successful that other companies in the basin are now emulating the process, and it is expected the technology will be expanded by the DOE nationwide.
Elsewhere, technology is currently being developed in Venezuela, Canada and Australia to recover oil from tar sands and oil shales. If that proves successful, the reserves of the Uinta Basin could become immensely profitable.
Gas is a natural solution
In addition to changing technologies that Allison believes will revitalize Uinta Basin oil fields, there is a changing environmental landscape that mandates increased use of cleaner-burning fuels like natural gas. In fact, don't be surprised to see an ever-increasing proportion of cars powered by natural gas in the years ahead as cities - including Salt Lake City - struggle to meet federal clean air standards.
And one of the biggest markets for Utah's natural gas will be power plants. "With the coming deregulation of electric power, there will be a big push for natural gas power plants," Allison said, noting about 60 percent of the nation's power is currently generated by burning coal.
With nuclear power no longer a viable option for political reasons, and oil- and coal-burning plants proving too polluting, "the economics are such that gas-fired plants are the only new ones coming on line," Allison said.
The drawback to developing Utah's natural gas reserves has been transmission lines to large Midwestern markets. Allison believes that will come with time. In fact, Questar is developing a pipeline from Utah through Colorado to link up with major natural gas supply lines in the Midwest.
"It is not so much a boom (in oil and gas production) may be coming, but it is here," Allison said. "The demand is increasing dramatically. And that will create jobs."
Jobs to run the water injection programs. Jobs to work the revitalized wells. Drilling jobs. Jobs to service the well equipment. Jobs to haul water and to get rid of it when they are done.
"The impact will be substantial," he said. "I believe this will stabilize the economy for years to come, and the tax increase should be dramatic. You consider those companies pay property tax on their equipment, and they pay royalties and severance tax on what they produce. I'd say the future of the region is very, very bright."
Cultures in conflict
If there is one area in the Uinta Basin that is poised for economic prosperity it would seem to be the Uintah-Ouray Indian Reservation. And there is no other that needs it more.
The state says unemployment on the reservation is 21 percent. "But if you look at the real numbers of those eligible to work, the unemployment is actually 43 percent," Adams said.
It is even more disconcerting, Adams said, when you consider that of those who do have jobs, 80 percent work for the tribe in some capacity, while only 20 percent work outside the reservation jurisdiction.
"The numbers are scary," Adams said. "It is hard for Native Americans to get jobs in the white market. Yet these people have college degrees, some with master's degrees, and if they get jobs they end up working in areas not related to their education. It is difficult for them to get accepted in the white community."
Historically, the problem of rampant poverty with its associated social ills on the Ute reservation can be attributed to long-standing cultural differences that has segregated American Indian and white populations. Some of it is probably due to failed social policies.
But another part of the problem has been a history of mismanagement of tribal resources, including a litany of failed business endeavors that frittered away millions of dollars of tribal money.
No matter what the cause of past failures and no matter who was to blame, Adams said the Utes are determined to do it right this time.
A big financial boost
The tribe is getting a huge financial boost due to compensation from Ute water claims arising from the Central Utah Project. The federal government has earmarked $125 million for economic development on tribal lands with the sole intent of creating economic prosperity.
The tribe hired Adams to spearhead those efforts, which now include the restoration of the Bottle Hollow resort, the development of a massive cattle feed yard and construction of a tax-free shopping center. And there is renewed emphasis on harvesting oil and gas resources on tribal lands, which not only employs Utes but returns tax revenues to tribal coffers.
"The tribe has enormous resources, ranging from water to wildlife to scenic rivers to minerals to forestry," Adams said. "They are all resources that can and need to be developed. And for the first time the tribe has taken on the responsibility to develop a master plan for land planning, land use and zoning, and economic development strategies."
One of the most ambitious plans calls for a cattle feed yard for some 1,000 head of cattle to be raised by Ute ranchers. The feed yard will be expanded within three years to accommodate 5,000 head of cattle.
The tribe is currently developing farm lands to raise the grains to support that feed yard. It has formed a farmers cooperative so that small farmers can join together to market the products they produce. The tribe has purchased equipment to help with planting and harvesting so that individual farmers do not have to purchase expensive equipment.
Another project on the drawing board - one certain to provoke a showdown with state tax officials over tribal sovereignty - is a plan to develop a shopping center with a grocery store, shops, franchise fast-food outlets and a truck stop. Patterned after similar developments on tribal lands in other states, the shopping center would likely be a "tax free" zone where products like gasoline and cigarettes would be sold without state taxes.
"Rather than the state collecting that revenue, the tribe would collect it, and it would go back to the tribe for the benefit of those living on the reservation," Adams said.
A broader discussion?
Adams hopes that such a marketing strategy would prod the state into a broader discussion on inequities in state tax policy as it relates to American Indians. For example, the state collects a "fly-over" tax on airlines that pass over the state and returns the revenues to the counties where the airline routes are. Uintah County gets about $1.5 million a year from the fly-over tax, Adams said, but the tribe gets nothing from that, despite the fact that 60 percent of the lands the airplanes fly over are reservation lands.
Furthermore, tribal businesses currently collect state sales tax from non-tribal members making purchases on the reservation. They do all the paperwork, send the money into the state and then 1 percent is sent back to the counties. None goes to the tribe that collected the revenue.
"The state does not have a good record when it comes to tax equity with Native American tribes," Adams said.
Another possible windfall for the tribe is recreation and wildlife. Plans are currently being implemented to market trophy hunting permits and guided hunts. There is also talk of white-water rafting trips, wilderness hiking and backcountry touring.
Adams has some advice for Uinta Basin businessmen: With $25 million a year over the next six years being pumped into tribal economic development, "I would get real friendly with the Ute tribe."
And even though the two cultures may have profound disagreements over things like tribal sovereignty, hunting rights, taxation and reservation boundaries, Adams believes the two sides can find common ground when it comes to economic development.
"We want the state and the counties to be partners with us, but we don't want to be treated the way we have been treated in the past and the way we are being treated now," Adams said. "There is no question Native Americans have struggled, and there is no question the (Ute) tribe is going to be aggressive in its economic development to turn that around."
White leaders in the basin are nonetheless skeptical. "Money down a rat hole," said one Duchesne County official. "We have watched them throw away money for decades. We watched Ute Manufacturing go belly-up. We watched Bottle Hollow - which was a tremendous idea - wither and die. They have never given us any reason to believe it will be any different this time around."
Adams says the reality of modern economies mandates cooperation. "If (the Ute tribe) does things right, if we plan it right, there will be a lot of change in the Uinta Basin," he said. "The question is whether they (white community) want to be part of that."
Status quo
The fact the Utes have an economic strategy with specific projects in place puts them far ahead of their white counterparts who seem content to let the future evolve as it will.
From coffee shops to ward houses, people may talk about the need for economic diversification, but they are more concerned about getting in their second cutting of hay. Most see little need to climb on Gov. Mike Leavitt's planning bandwagon.
"We really are pretty content, and we don't want things to change," said state Rep. Beverly Evans, R-Altamont. "We like the lifestyle here. Career-wise and opportunity-wise, we could have made more money with a different lifestyle in a different area, but we chose to live here for the lifestyle."
She acknowledges it is increasingly difficult to make ends meet, especially for the farmers and ranchers. The northern part of Duchesne and Uintah counties has already seen prime farm land being subdivided for vacation homes and retirees as landowners piecemeal their land to keep their farming operations solvent.
More and more farmers and ranchers are opening their homes as guest lodges to hunters and anglers. In fact, state Sen. Alarik Myrin makes his Duchesne County home available to hunters.
Another farmer turned his operation into a pheasant farm. Others are marketing cow manure. Some are trying their hand at dude ranching.
"We have oil and gas, and we have agriculture," Evans said. "Without a railroad or decent highway, we're never going to have much more than that, so we get by the best we can with what we've got."
It would be better with fewer government regulations, with fewer restrictions on the use of public lands. And if beef prices stabilize and if the telecommunications infrastructure is improved, things could get even better, she said.
"Maybe change is inevitable, but hopefully we will not lose the sense of community we enjoy here," Evans said.
That may or may not happen. The only thing certain in these parts is that another oil boom is inevitable. And so is another bust.
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ADDITIONAL INFORMATION
Meetings in Uinta
Most of Utah's 104 lawmakers will meet in the Uinta Basin this week for their monthly interim meetings and to listen to concerns about local industries, government services and health care.
Lawmakers will participate in a golf tournament on Tuesday, followed by tours of Duchesne County on Wednesday and a town meeting in Roosevelt that night. On Thursday, the lawmakers will tour Uintah and Daggett counties and hold a town meeting in Vernal that night. Recreational river trips and golfing are scheduled Friday.
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County profiles: Uintah - Duchesne - Daggett
Population
Past 1981 1986 1991 1996
Uintah 22,100 24,000 23,100 24,275
Duchesne 13,100 14,300 12,800 14,032
Daggett 850 700 700 803
Future 2000 2005 2010 2015
Uintah 24,938 26,481 29,225 32,305
Duchesne 14,390 14,998 16,307 17,824
Daggett 855 924 1,032 1,153
Race - percent of total
White Black Indian Asian Hispanic
Utah 89.4 0.7 1.4 2.4 6.1
Uintah 86.2 0.1 10.3 0.4 3.0
Duchesne 89.8 0.1 5.9 0.3 3.9
Daggett 96.4 0.0 0.8 0.5 2.1
Unemployment - percent of total
1985 1995 1996
Uintah 8.5 7.1 7.4
Duchesne 10.5 9.3 8.5
Daggett 3.9 6.3 4.3
Job types
Government Trade Services Mining
Uintah 22.6% 24.0% 22.9% 14.3%
Government Trade Services Mining
Duchesne 35.8% 21.2% 10.7% 10.5%
Government Trade Services Mining
Daggett 53.0% 10.2% 24.4% 10.4%
Income - Yearly-per capita
1995
U.S. $23,200
Uintah $12,400
Duchesne $13,400
Daggett $15,300
Welfare - Percent of population receiving assistance
Utah 15.0%
Uintah 12.5%
Duchesne 22.4%
Daggett 4.7%