Houston based Anadarko Petroleum recently drilled 11 horizontal wells in the Wattenberg Formation, which sits below portions of Colorado’s Front Range. The wells are expected to bring in an estimated $4 billion per year to Colorado’s economy. The reserves are estimated to contain between 500 million and 1.5 billon barrels, with 70 percent of the production in oil, and the remainder being natural gas. This is undoubtedly a positive discovery for the state. There are, however, several factors that must be considered when looking at this picture as a whole.
This discovery will play a significant role in Colorado’s energy economy, but just like with any new energy production, there are critics. The Clean Water Action and Clean Water Fund of Colorado stated that this discovery is mixed. Wells require water and fracking to extract the oil and gas, and this has implications on the environment. This will increase the demand for water and also increase the risk of contamination from fracking chemicals. The argument for increased water use must be carefully considered, as the Rocky Mountain West already has limited water and 80 percent of the water used in Colorado comes from the Western Slope but is consumed on the Front Range. These are valid arguments and very real risks, but there is also an argument for job creation and how this discovery will help the local economy. The Wattenberg is not as big as the Bakken in North Dakota, but the economic benefits from the Bakken have been significant for that region, and at an estimated $4 billion annually, Colorado’s economy will likely see many benefits from the Wattenberg discovery. This discovery has also prompted other companies to drill exploratory wells in other areas of Colorado such as El Paso, Arapahoe, Douglas, and Elbert counties. If these exploratory wells are as successful as the Wattenberg Field, Colorado could yield much larger benefits.
This is a significant discovery, and has enormous potential for job creation. With proper regulation and oversight, the oil and gas produced from the Wattenberg wells can be successful and bring numerous benefits to Colorado. However, if not properly executed, these wells could severely harm the environment and the economy. It is imperative that all aspects are analyzed and the proper balance is found in order to ensure that the environment is protected but the citizens of Colorado can also prosper from this potentially huge economic boost.