Durango Fire & Rescue Authority opens its 2011 budget update with the sentence, A reduction in the value of natural gas has resulted in a 20 percent decline in the Durango Fire Rescues operational revenue for 2011.
Because of the local coal-bed methane gas boom, La Plata County has enjoyed one of the lowest property tax levels in Colorado. But we have been treating the regions natural gas capital as a short-term income source. Like any other nonrenewable resource, whether it is the silver that was mined from the mountains around Silverton or the coal-bed methane we are currently mining, it is a short-term, one-time thing.
Unlike farming, ranching, tourism or education, all of which can be long-term and sustained sources of the regions income, mining or drilling will always be a short-term industry. Short-term may last for a few generations, as in the oil and gas industry in San Juan County, N.M. It may only last the 20 or 30 years of the uranium boom of the mid-20th century. What is clear is that once the resource is mined out, the income is gone, as well.
During the current gas boom, La Plata County has chosen to live high. We have cut our property taxes to the third-lowest in Colorado and taken the savings to the car dealerships. It has been nice, especially for folks like me who dont live in the gas patch itself, and just get to ride on the bubble. There were other options.
A lot of the value of the gas has been used to build capital. People have used their royalty checks to pay off their mortgages, build up their investment portfolios or buy more property. Others have seen the value of their shares of Amoco/BP go up, or sold them for other property. The gas industry has taken billions of dollars of gas out of La Plata County and used it to invest in deepwater drilling in the Gulf of Mexico (OK, bad example of a good investment) or other properties.
As a county, we have not been so wise. We chose to save a few dollars, save the gas industry millions and leave our children with the higher taxes. The reduction in the value of natural gas that is pinching DFRA is just the tip of what will be an ever-increasing iceberg of La Plata County residents slow wake-up from a methane high. As the gas production decreases, which it will, local service providers will feel more and more pinch. BP and the other gas developers will move on to the next resource region, with the aid of the capital received from the San Juan Basin.
We all have enjoyed the lower tax rates allowed by the methane production to help pay our common bills. Too bad we didnt recognize that it was a short-term and selfish thing to cut taxes now and leave nothing for the future.
La Plata County wont bust like some mining areas we have Fort Lewis College, ranching and farming and tourism to round out our economy. But we could have been a bit more mature in our fiscal management of the gas bubble.
email@example.com. Dan Randolph is interim director of the San Juan Citizens Alliance.