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Boom brings bucks, upheaval

Traffic, businesses, housing and schools are heavily impacted

ROOSEVELT — Virtually every diner in the bustling Frontier Grill on this weekday evening has some connection to the Uinta Basin's oil and gas fields, according to lifetime local Dale Winterton, looking at the crowd.

And for hostess Barbara White, who hustles to see that those who are seated are being well served and that those in the foyer still waiting get their chance, this is the essence of "boom" in this eastern Utah oil town.

"We've been so much busier. We're just so slammed," she said, her voice trailing off as she disappears into the dining room.

"We haven't seen anything like this in the past 20 years," said Winterton, who has seen the good times come and go as the unpredictable petroleum industry makes its way through basin history.

At present, with prices for yellow crude (the kind that contains a high amount of paraffin) ranging from $23 to $26 per barrel, compared with approximately $6 per barrel at the nadir of the slump, there is plenty of impetus for new development, and its fallout ripples through the economy.

The company for which Winterton works, LCL Oil, delivers propane, gas and diesel fuels to both residential customers and oil producers in a large region.

With the basin blossoming oil and gas wells like so many wildflowers, LCL has seen a significant increase in business — but also in the competition to provide that business.

A boom affects all aspects of life in the basin, Winterton said. The tills ring more regularly at retail outlets, there is more traffic on the streets, social groups gather new members, construction increases, churches and schools may see an increase (although Uintah School District actually saw a small decline in students this year. Oil field workers tend to be single men who don't bring families to the basin communities).

Housing is a serious, chronic problem, particularly during a boom. One man working for a local gas-producing company has lived in a motel room for five years, his boss said.

And the heightened economic activity can have a downside, local officials acknowledge. Crime goes up. And there is a new breed of rural "slum lords" who set up little impromptu communities of "inferior, single-wide trailers" and rent them to workers at inflated prices. When the boom loses steam, the trailers often are abandoned to become a blight on the landscape. The "everyone knows everyone" feel of the small basin communities may get lost in a them-and-us mentality.

A sudden increase in productivity can be a challenge for the oil and gas companies that have properties in the Uintah Basin. The skilled workers who were there for the last round of development are gone, many never to return.

"It's kind of a madhouse," said Leon Ross of Ross Exploration, which both starts and services wells. Producers desperate for help engage in little "wage wars," he said, lamenting that he had recently lost four crews to an employer willing to pay more. The nature of the work requires mostly on-the-job training specific to the job at hand, he said. Employers can't go to local colleges or applied technology centers looking for workers.

A growing number of women are joining the ranks of oil field workers, Ross said.

George McBride of EOG Resources said his company has been "real fortunate." By contracting out work and paying good wages — approximately $20 to $23 per hour — EOG has managed to find people to man its increased natural gas production.

"Those are good wages for this area," he said. Since January 2000, the company has hired 10 people to maintain its wells.

A small portion of the natural gas from EOG wells is piped to the Wasatch Front, but the bulk goes to a Wyoming hub and is subsequently sent both east and west, McBride said. During a boom, the company can "bring on a well per week," he said.

The ripple-down effect of petroleum production is reflected in McBride's estimation that his company spends approximately a half million dollars per month for equipment and supplies. As much as possible, they keep the money in the local economy. However, one of the chronic banes of the area's recurrent "bust" is that some of the suppliers go out of business.

Out on Red Wash Mesa, Shenandoah Energy Inc. is putting oil wells into production as fast as feasible. The company has 350 wells in an area that sprawls over 120 square miles of high desert overlooking the Green River and is now producing some 3,400 barrels of crude oil per day. It costs some $450,000 to get a new well into production, said J.T. Conley, SEI Western District manager, but each has an expected production life of 20 to 40 years.

Part of Conley's job is to watch the market — closely. Especially commodities and commodities futures. "We use that information in our decisionmaking," he said. "We're driven by the economy."

Each day the petroleum business is a see-saw, with production costs and returns carefully balanced on a mid-support of market factors. If production costs come too close to the anticipated return, it's time to cap the well, Conley said.

A drive through a small portion of the Red Mesa area gives a cross-section of the work that is pouring oil off the mesa and into Salt Lake area refineries: nodding jack pumps like archaic life forms grazing away, a drilling rig decorating the skyline and sending pipes through almost a mile of geologic layers to reach the oil, and a network of piping that brings the crude oil into a pair of large tanks. Here, the paraffin content is separated out "just like the oil and vinegar in a salad dressing," in Conley's terms, to prepare it for refining.

Just as the jack pumps bring the oil to the surface, oil and gas production in the Uinta Basin pumps revenues into government coffers, as well as rewarding the companies that do the work. Royalties go to the federal, state and Indian agencies that permit the wells. Taxes — centrally assessed by the state — eventually benefit counties, communities and schools as well. It's a contribution not always recognized outside the basin, Conley said.

How long will the current boom last? Industry folks are cautious. They hope. Today, every nod of a jack pump is an emphatic "Yes!" But they've been disappointed before and they aren't predicting.

However, a locally popular bumper sticker somewhat irreverently but cogently says it all: "Lord, give me one more boom, and I'll try not to screw it up."


E-mail: tvanleer@desnews.com