Denver's Mile-High Energy Boom

Drilling and digging make it the Big D of the West

In the fast-changing, opportunity-laden 1980s, the energy shortage will bring an economic surge to resource-rich regions. No place has the pace of exploration and the intensity of development to match the Rocky Mountain region that embraces Colorado, Utah, Wyoming and Montana. Locked in the area's majestic peaks and prairies are the nation's most lavish supplies of undeveloped coal, oil, natural gas, shale oil, uranium and almost everything else that creates power.

The hub is Denver, a city caught up in a runaway boom caused by the sudden influx of energy corporations. Denver's growth, writes TIME Correspondent William Blaylock, is changing the face of the mile-high city, the region and the lives of its residents at a dizzying rate that pleases many but worries some. Blaylock's report:

Violent volcanic eruptions shaped the lofty Rockies near by, and today Denver is once again thrusting skyward. This time the earth shakes with 45-ton drilling cranes and six-cylinder Cat loaders constructing skyscrapers of polished granite, cold steel and gleaming glass. As the world price of oil rockets, energy firms are converging on Denver to exploit the surrounding area's resources. With the Administration's proposal to pour out billions in Government money to create synthetic fuel industries, the rush stands to become a stampede. Even if Congress allocates only a fraction of the subsidies that Jimmy Carter calls for, Denver could benefit largely.

Already more than 2,000 energy-related companies have set up shop in the city. They range from one-man operations selling drilling-survey data to such giant conglomerates as Gulf, Texaco and Standard Oil Co. of California. Newcomers have swelled the population of the metropolitan area from 1.2 million in 1970 to 1.6 million today--including 4,000 geologists. One of the nation's fastest-growing cities, Denver has begun to rival Houston for the title of "Energy Capital, U.S.A."

Proclaiming the city's energy eminence are the names over the doors of its new office towers: Energy Center I, the Petroleum Building and Anaconda Tower (the old copper mining company, now owned by Atlantic Richfield oil, is big in uranium). Construction of a 36-story Amoco Tower and a 23-story Energy Plaza will be completed next year. In all, 27 major office buildings are now going up. Work on two dozen more office complexes will begin in 1980. All this has transformed the once unimpressive skyline of Denver.

Typical of the aggressive, independent energy gamblers who are settling in Denver is Jerome Lewis, president of Petro-Lewis Corp., one of the country's 15 largest independent oil exploration and production companies. Lewis began as a consultant eleven years ago, and today he holds an interest in 11,000 wells in 21 states. Sitting amid the chrome and crushed velvet of Denver's Petroleum Club, Lewis gestures toward the Rocky Mountains still glazed with snow and exults: "This is today's big oil frontier. It is the most exciting thing in America's energy equation since the North Slope of Alaska."

Like Lewis, countless other managers and entrepreneurs are coming to Denver to live amid its comfort and culture while their hired roughnecks and miners squeeze the energy from the rural outposts. Colorado, Montana, Utah and Wyoming contain 48% of the nation's proven coal reserves, 15% of its oil and 10% of its natural gas. Many geologists believe that these estimates substantially understate the area's true energy wealth. Rising prices make it worthwhile for oilmen to drill into sites that previously were considered too risky or too costly to develop. Some experts figure that new oil finds in the four-state region could add about 50% to the nation's 29 billion bbl. of "proven" reserves and 40% to the 212 trillion cu. ft. of natural gas.

A most exciting strike was made in 1975 when a drilling crew hit oil and gas deep in northern Utah's Pineview Field in what is known as the "Overthrust Belt." A giant geologic knot that twists from southern Colorado to the Canadian border, the belt was not considered worth serious exploration at previous prices because of the tough and expensive drilling conditions. Pools of oil and gas are randomly located and perched on top of one another, and such formations make traditional exploration and analysis difficult, if not impossible. Says A.B. ("Pete") Slaybaugh, chief of Continental Oil's exploration team in the area: "Frequently we find ourselves drilling through more than one layer of soil, shale and rock, only to find another layer of the same. With a normal well there is usually only one layer. Mother Nature didn't do us any favors."

Adds James Vanderbeek, who heads the team from Amoco, which plans to spend $61 million next year in search and development in the area: "It's costing us up to $5 million to drill a single hole, twice that of a conventional well."

America's oil shale, which is estimated to contain about 75 billion bbl. of recoverable crude, is also concentrated in the region. Elaborate pilot projects to get the oil are planned by Occidental Petroleum in western Colorado and Union Oil in southeastern Wyoming. The investment would be hefty--$120 million for Union's 20,000-acre test site designed to produce 9,000 bbl. daily--but there is a strong chance that Congress will approve a $3 tax credit for each barrel produced.

Coal mining is also picking up in the prairies sloping east of the Rockies.

Wyoming's Powder River Basin, a huge treeless ellipse that runs from Casper north to Sheridan, contains an estimated 400 billion metric tons of coal--enough to provide the entire U.S. electricity needs for the next 250 years.

At Atlantic Richfield's new Black Thunder mine, twelve miles southeast of the windy, pastel-painted trailer town of Wright, mining cranes seven stories tall are equipped with dinosaur-size shovels that claw seams of coal 70-ft. thick from the sandy soil. Not only is surface mining here cheaper than traditional underground mining in the rugged Appalachians, but also the coal spews fewer sulfur pollutants when burned. Overlooking the vast canyon of coal sparkling in the afternoon sun, Bob Blanchard, production manager at Black Thunder, predicts, "We'll be kicking out 5 million tons of coal this year." By 1983 that figure is planned to hit 20 million tons, making Black Thunder the world's largest coal mine.

The size of such projects poses problems, notably the need to expand existing rail facilities to deliver the coal. Denver is the region's rail center, and it expects to be hard put to handle the growth in train shipments, which could jump ten times in the next five years. Area residents living near rail lines complain that coal trains, many of them 110 cars long, are disrupting traffic and hurting business. In Littleton, a suburb ten miles south of Denver, the main street is closed to traffic for up to five hours a day to allow coal trains to pass. Complains City Manager Gale Christy: "What's worse, it's getting worse."

Proposals for alternative means of transporting coal have been rejected so far. Last month Wyoming Governor Ed Herschler refused to bend state environmental laws to permit construction of a $1.8 billion slurry pipeline designed to move coal from Wyoming mines to Houston power plants. State officials estimated that every million tons of coal shipped by slurry would deplete the area's limited water supply by as much as 260 million gal. Throughout the region, bitter battles will pit job-creating energy developers against preservation-minded environmentalists. The fights will be intense because the need for pure and plentiful water, clean air and unscarred land has always ranked high on the West's list of priorities.

All the benefits and all the disabilities of growth will affect Denver. As its population increases, housing costs are soaring. Typically, a three-bedroom house that sold six years ago for $35,000 today fetches $105,000. Says Real Estate Salesman George G. Martin: "Around here owners don't shoot for 100% of the asking price, they shoot for 110%."

Denver already has more car owners per inhabitant than any other U.S. city, and auto congestion is a thickening problem. Because its mile-high air contains less oxygen, its cars exhaust twice as much carbon monoxide as autos in lower-lying cities. In the winter, temperature inversions create a "brown cloud" that hangs over the Denver basin and across the front range.

Denver and its region have had mining booms before, only to slump after the gold, silver and other ores gave out. So there is rising public pressure for the new development to be measured and well planned. In sum, Denver is a city on the move, but some of the movement will have to be closely controlled by local officials.

Still, no metropolis in the nation offers more opportunity in the 1980s.

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