Colorado Employment Increases by 13,000 jobs in October – Really?

On Friday November 20th, the BLS released wage and salary employment data for the states. The seasonally adjusted data indicated that Colorado employment increased by 13,000 jobs last month.

This is in sharp contrast to the previous three months. The data for July showed a gain of 600 jobs; an increase of 1,600 workers was posted in August, and a decline of 1,600 jobs showed up in September.

If these numbers prove to be accurate, it is reasonable to raise the question: Which is the anomaly – the posted employment for July through September or the employment for October?

The non-seasonally adjusted data shows the Colorado employment continues to post solid job growth. Approximately 59,700 jobs will be added this year.

Colorado employment

The state’s job growth is led by the health care, construction, and accommodations and food services industries. There are fears that construction growth will be constrained by the lack of trained workers.

In addition, all of the state’s MSAs have shown solid to strong job growth. Local governments are continuing to spend and the state government is offering more tax incentives to out-of-state companies to move to Colorado.

A review of the top news stories for the past month echoes the sentiment of state leaders (Office of state Planning and Budgeting and Colorado Legislative Council) who say that the economy is on solid footing.

A majority of the coverage about the economy is very positive, however, there is one story that is unsettling. Union Pacific is laying off workers in Denver and BNSF is following suit in other states. While there is reason to be concerned about the individuals who are furloughed or laid off, there is greater concern because the railroads are facing decreased demand for shipments (coal, oil, agriculture products, and industrial products). This suggests there may be something fundamentally wrong with the overall economy, i.e. manufacturing may be woefully weak.

Another note of concern, the state of Colorado is expected to take in record levels of revenue, yet it will experience a budget shortfall for a variety of reasons beyond the control of state legislators. Special interest groups are addressing this issue, but there is limited interest in their efforts.

The bottom line is the Colorado economy is on solid footing, at least for the moment.

 

Economic Impact of Colorado Mining Employment is Significant

In October, the Bureau of Labor Statistics reported the Colorado Mining Sector employed about 35,000 workers, or about 1.4% of the state’s 2,534,600 wage and salary employees.

In 2014 the GDP for the Colorado Mining Sector was $19 billion, or 6.2% of the 2014 Colorado GDP. More importantly, the Mining Sector accounted for about 18.2% of the growth in the state’s GDP.

In a nutshell, mining employment is a small portion of total employment in Colorado. On the other hand, the industry makes a major contribution to the GDP.

The Oil and Gas Industry accounts for about 75% of the employment and GDP total.

With that as a background, it is easy to see why state leaders were concerned when the price for a barrel of oil plummeted to below $40 per barrel in a matter of months.

To make matters worse, the Bureau of Labor Statistics may have overstated employment in the Oil and Gas industry by as much as 4,000 workers. In other words, the data for the state does not appear to have measured the direct, indirect, and induced impact of lower employment caused by lower prices for a barrel of oil.

A quick analysis using IMPLAN shows the loss of 3,200 oil and gas workers and 800 support workers would result in a loss of $4.2 billion in economic activity and a total loss of 12,486 jobs. The direct average annual wages for the oil and gas industry are $96,425 and the direct average annual output per worker is $701,480.

The Bureau of Labor Statistics will update wage and salary data for 2015 in its benchmark revisions next March. At that point we will have a better look at the magnitude of the layoffs in the Mining Sector in 2015.

While we are anxiously awaiting the update, the reduction in mining employment is not a number we really want to see – it will be ugly!

mining impact

Rocky Mountain National Park Will Top 4 Million Visitors in 2015

For many years Rocky Mountain National Park has been one of the state’s top tourist attractions. This year it is on track to surpass four million visitors.  Lower gas prices have played a role in increasing the number of visitations at Rocky Mountain as well as other western national parks.

In addition, the higher number of visitors is a result of the celebration of the park’s 100th birthday and the publicity surrounding that landmark. Throughout the year there have been numerous events celebrating the event that culminated with a re-dedication of the park on September 4th. National Park officials have indicated that visitations are frequently 10% to 15% higher during their centennial years.

The park opened in 1915 and 31,000 people visited the park. By 1948, the number of visitations topped 1 million for the first time (1,023,262). More recently the number of visitors has shown steady growth:
• 2010   2,955,821
• 2011   3,176,941
• 2012   3,229,617
• 2013   2,991,141
• 2014   3,443,501
• 2015   4,100,000 estimated.

Note: the decline in 2013 is a result of a federal government shutdown and severe flooding.

Here are some fascinating facts about Rocky Mountain National Park from the park’s website:
•Rocky Mountain National Park was established in 1915.
•The Continental Divide (a demarcation of the flow of water between the Pacific Ocean and Atlantic Ocean) runs through the park.
•Grand Lake Cemetery (which was founded in 1892) is the only active community cemetery operating inside a national park.
•Elevations inside Rocky Mountain National Park range from 8,000 feet in the valleys to 14,259 feet at the top of Longs Peak (the highest point in the park).

In Rocky Mountain National Park, there are:
•35 trailheads, with 359 miles of established trails
•585 drive-in campsites (situated in 5 campgrounds) and 200 backcountry campsites
•60 types of mammals (including moose, elk, bighorn sheep, black bears, coyotes, and mule deer)
•280 species of birds
•900 different plants
•150 lakes
•476 miles of streams and creeks, including, most notably, the headwaters of the Colorado River
•260 miles of horse trails
•5 visitor centers.

Whether it is the year ’round spectacular views, the spring-time flowers, or the bugling elk in October – its worth the trip.Rocky Mountain National Park

Colorado’s October Job Growth Reverses Downward Trend

Recent data from the Bureau of Labor Statistics shows that 2015 wage and salary job growth continues to be positive, but it is increasing at a decreasing rate. Through the first nine months Colorado employment is 61,000 jobs greater than the same period last year.

During Q1 job growth was 75,000 greater than the same period a year ago. It dropped significantly during Q2 – 60,100 greater than Q2 2014. Q3 2015 job growth was only 47,700 greater than Q3 2014.

After declining for six months (March through August), employment increased from 42,100 in August to 42,400 in September.

About 76.2% of total jobs added were in the top five sectors:
Health Care 13,800
Accommodations and Food Services 12,300
Construction 11,500
Professional and Scientific 5,200
Manufacturing 3,600

Approximately 23.8% of all jobs added were in Leisure and Hospitality (AFS + AER). This sector touches all Colorado counties.

About 10.8% of total jobs added were in the PST, Manufacturing, and Information Sectors. These sectors are the source of primary and advanced technology jobs.

Colorado is projected to add 73,000 to 79,000 jobs in 2015, a gain of 3.0% to 3.2%. As mentioned earlier Colorado is on track to add 61,000 jobs this year.

CDLE/LMI has projected that a significant upward adjustment will be made to the Q4 2014 data and data for the first four months of 2015. These revisions will be made in March 2016. Total employment for 2015 should be at the lower end of the range of 73,000 to 79,000. This is the level of job growth forecasted by cber.co for 2015.

The good news is the downward trend in the number of jobs added may have been reversed in October. We will learn more next month and in March 2016 when the 2015 data is revised.

Wage and Salary Job Growth

 

If the Economy is Doing so Well, Why Doesn’t it Feel More Robust? -Take II

In the previous blog post, the topic of the economic recovery was discussed. Although it has been a solid recovery, why doesn’t it feel more robust?

The 2007 recovery was atypical in that it occurred over a period of years, as opposed to months. As a result Colorado posted accelerating job growth for four consecutive years. Essentially, the recovery from the recession was weak and gradual. At no point has the state reached a point where public and private leaders could really say, “We have arrived.”

At the national level, the U.S. will add 3.0 million jobs in 2015. Yet, the focus is on the slowdown of the global economy, not the fact that 2015 will be the fifth consecutive year of solid job growth.

Nationally, GDP growth has been subpar. It is hard to get excited when the rate of Real GDP growth is 2.0% to 2.5%. Consumer spending has increased at a similar anemic rate. In other words consumers have remained cautious, as if they are always looking over their shoulder.

The construction industry is “booming” and there is a shortage of trained workers. At the same time, the growth of the industry pales when compared to the 2000s. The good news is that housing has been built on an “as needed basis” and the chance of being overbuilt is slim.

During the recovery period, the state has suffered natural tragedies. There were multiple severe forest fires in several parts of the state, as well as flooding and drought. That was taxing on the state – fiscally and psychologically. Fortunately, Coloradans have remained resilient.

Lower oil prices have dampened growth in parts of the state that had previously experienced strong growth. It is easy to forget the risk associated with the extractive industries until the price of the commodities (oil, molybdenum, coal) drops precipitously or regulations are established that eliminate demand for these commodities.

Then there is the state government… The legislature has focused on social issues for the past couple of sessions – and that is not bad. Some feel insufficient time and resources were spent addressing issues that could improve the state’s ability to conduct business.

At one point, there was sufficient discourse to cause several counties to threaten secession from the state. At times, state government seemed dysfunctional over the past five years.

State government faces a new problem – the state economy is on solid footing and the state will generate record levels of revenue, yet the legislature will be forced to make cuts to key service areas. This conundrum is caused by the combination of Amendment 23, the Gallagher Amendment, TABOR, the initiative process, and Medicare obligations. It is difficult for legislators to govern the state in a way they feel is appropriate.

Despite the challenges and angst created by the items mentioned above, the growth of Colorado’s economy has exceeded the growth of the U.S. economy in many key areas (rate of job growth, rate of population growth, growth of Gross Domestic Product).

Unfortunately, the picture hasn’t always been rosy for the past five years, despite the many great things that have happened.

Bureau of Labor Statistics Data May Not Correctly Tell the Story

It is questionable whether the wage and salary data produced by the Bureau of Labor Statistics reflects what is happening on the streets of Colorado. With that in mind, the following paragraphs tell the story of the Colorado economy based on the headlines.

The Headlines

Comments made by Mark Snead

The former director of the Denver Branch of the Kansas City Fed has said that the Tier I energy states are on the verge of recession. To date, the economies in Tier II states have been much stronger and job gains in other industries have more than offset job losses in the energy sector.

On a different note, Snead posted in a blog post saying that” the current expansion is getting to be a bit long in the tooth.” It is 74 months and running.

Government

Governments are optimistic given the following actions:
• Boulder has approved their 2016 budget which includes the addition of 48 employees.
• Governor Hickenlooper has promised $100 million to make Colorado the “best state for biking.”
• The U.S. Treasury CDFI fund has given a $2 million grant to The Colorado Enterprise Fund to support local small businesses.
• The state approved $12.8 million in tax credits for two companies that might result in 1,600 jobs. These companies are in the health care and energy solutions industries.
• Loveland city council will discuss a proposal to provide high-tech manufacturing consulting and training organization EWI with $2 million in funding to open a facility at the Rocky Mountain Center for Innovation and Technology.
• In an uncharacteristic move, the state rejected a proposal for tax credits for a Colorado company that would increase health care employment by 1,418 jobs. The justification was the state did not have the workers to fill the jobs and would have to import them.

Aerospace
Aerospace is one of Colorado’s targeted high tech industries, yet it is in a state of flux with increased involvement from the private sector. The impact of some of the changes remains to be seen.
• Lockheed Martin could lay off 500 IT workers (nationally).
• Aeroject Rocketdyne made an unsolicited bid of $2 billion for United Launch Alliance.
• Jeff Bezos announces Cape Canaveral as the base for his commercial aerospace program.

Retail
The budgets for many cities rely heavily on taxes generated from retail trade sales. Nationally some retail chains are struggling. At the moment that appears to be an issue with the companies, not the industry.
• Best Buy in Broomfield has announced it is closing on October 31.
• A January restructuring caused Macy’s to shutter 14 stores and it recently announced it will close an additional 35 to 40 stores in early 2016. The company runs 770 Macy’s stores and has closed 52 locations over the last five years while opening 12. It is not known if Colorado stores will be closed.

Technology
Colorado has always prided itself for its technology clusters.
• Hewlett-Packard has announced worldwide cuts of 25,000 to 30,000. There is uncertainty whether this will negatively impact Colorado or benefit it if consolidation brings workers to the state.
• Level 3 has announced a round of layoffs associated with the company’s merger with TW Telecomm that took place last fall. The location and number of these workers has not been announced.
• Seagate will layoff 70 workers in Longmont
• Astra Zeneca bought the Boulder Amgen facility and may add 400 jobs.

Construction
Some construction leaders are clamoring that the growth of the industry and the economy may not reach its potential in part because of the lack of trained workers. The lack of a trained workforce has occurred despite solid growth in wages. At the same time, non-seasonally adjusted construction spending is at its highest level since May 2008.

Energy
Synergy Resources paid $78 million to K.P. Kaufman for assets in the Wattenberg Field. After record oil production in May, June production dropped off slightly.

Time will tell whether the Bureau of Labor Statistics or the headlines are correct.

Colorado has Diverse Cost of Living

How does the cost of living in your area compare to Broomfield County or Yuma County? The Colorado Legislative Council collects Cost of Living data for Colorado’s 64 counties and has done so every two years since 1993 for the Public School Finance Act of 1994 for the School District Funding Formula.

The current data is from 2013. It assumes a three person household, 1,500 square foot home, with household income of $49,100.Annual expenditures are broken down as follows:
• Housing 33.8%
• Transportation 19.3%
• Food 13.6%
• Health Care 7.3%
• Entertainment 4.5%
• Apparel 3.3%
• Other Categories 18.2%

The counties are indexed off the state HHI, $49,100. Twenty-one counties are above the state value and 43 are below it.

As expected the counties in the state’s “Very High” category are the ones where the state’s prime ski areas are located.

Rank County HHI Index Index Category
1 Pitkin $84,810 172.7 Very High
2 Summit $59,836 121.9 Very High
3 San Miguel $54,717 111.4 Very High
4 Routt $54,311 110.6 Very High

Four counties are in the “High” category. Boulder County is in the “High” category. It is the Boulder MSA

Rank County HHI Index Index Category
5 Eagle $53,931 109.8 High
6 Denver $53,796 109.6 High
7 Grand $52,067 106.0 High
8 Boulder $52,041 106.0 High

Twenty-two counties are in the “Mid-Range” category. Larimer County is in the “Mid-Range” category. It is the Fort Collins MSA. Note that Park County, #21, is only a few dollars above the state average.

Rank County HHI Index Index Category
9 Hinsdale $50,800 103.5 Mid-Range
10 Gilpin $50,677 103.2 Mid-Range
11 La Plata $50,670 103.2 Mid-Range
12 Broomfield $50,651 103.2 Mid-Range
13 Gunnison $50,298 102.4 Mid-Range
14 Jefferson $50,108 102.1 Mid-Range
15 Clear Creek $49,949 101.7 Mid-Range
16 Garfield $49,777 101.4 Mid-Range
17 Lake $49,745 101.3 Mid-Range
18 Douglas $49,722 101.3 Mid-Range
19 Ouray $49,502 100.8 Mid-Range
20 San Juan $49,197 100.2 Mid-Range
21 Park $49,115 100.0 Mid-Range
22 Arapahoe $48,570 98.9 Mid-Range
23 El Paso $48,427 98.6 Mid-Range
24 Larimer $48,319 98.4 Mid-Range
25 Mineral $48,222 98.2 Mid-Range
26 Moffat $47,874 97.5 Mid-Range
27 Elbert $47,706 97.2 Mid-Range
28 Teller $47,489 96.7 Mid-Range
29 Adams $47,477 96.7 Mid-Range
30 Chaffee $47,320 96.4 Mid-Range

Sixteen counties are in the “Low” category. Weld, Mesa, and Pueblo Counties represent three of the states MSAs.

Rank County HHI Index Index Category
31 Morgan $46,604 94.9 Low
32 Delta $46,514 94.7 Low
33 Weld $46,419 94.5 Low
34 Custer $46,234 94.2 Low
35 Mesa $45,986 93.7 Low
36 Rio Blanco $45,932 93.5 Low
37 Pueblo $45,707 93.1 Low
38 Montrose $45,605 92.9 Low
39 Logan $45,519 92.7 Low
40 Rio Grande $45,301 92.3 Low
41 Alamosa $45,295 92.3 Low
42 Fremont $45,274 92.2 Low
43 Montezuma $45,206 92.1 Low
44 Jackson $44,834 91.3 Low
45 Archuleta $44,665 91.0 Low
46 Kit Carson $44,563 90.8 Low

Eighteen counties are in the “Very Low” category. These are all rural counties.

Rank County HHI Index Index Category
47 Dolores $43,943 89.5 Very Low
48 Phillips $43,713 89.0 Very Low
49 Costilla $43,537 88.7 Very Low
50 Saguache $43,331 88.3 Very Low
51 Las Animas $43,233 88.1 Very Low
52 Lincoln $43,044 87.7 Very Low
53 Huerfano $42,970 87.5 Very Low
54 Washington $42,947 87.5 Very Low
55 Yuma $42,786 87.1 Very Low
56 Sedgwick $42,781 87.1 Very Low
57 Otero $42,013 85.6 Very Low
58 Cheyenne $41,956 85.4 Very Low
59 Conejos $41,889 85.3 Very Low
60 Bent $41,477 84.5 Very Low
61 Crowley $41,440 84.4 Very Low
62 Prowers $41,197 83.9 Very Low
63 Baca $40,779 83.1 Very Low
64 Kiowa $40,438 82.4 Very Low

The Colorado Springs MSA includes El Paso and Teller Counties. They are both in the Mid-Range category, slightly below the state level of 100.

The Denver MSA has ten counties. Denver is in the “High” category and the following counties are in the “Mid-Range” category: Gilpin, Broomfield, Jefferson, Clear Creek, Douglas, Park, Arapahoe, Elbert, and Adams counties.

As can be seen, Colorado is a diverse state from many perspectives: geographically, ethnically, and from an industry mix. It is also a diverse state in terms of the cost of living. In simplistic terms, the cost of living is higher in the metro areas and the mountain resort communities and lower in the rural communities.

The Impact of Job Losses in the Oil and Gas Industry on the Colorado Economy

About a year ago the Colorado Oil and Gas Industry was turned upside down. Almost overnight the price for a barrel of oil plummeted.

Since dropping, prices for a barrel of oil have remained low, rig count has dropped, employment has declined, BUT production has remained at record levels.  At some point the disruption will become more settled and Colorado will move forward with a smaller oil and gas industry.

Projected revisions to the BLS employment data for Colorado suggest the oil and gas  industry could be reduced by 1,000 jobs for 2015.  Although the industry is small from an employment perspective, it is significant in terms of gross domestic product for the state and MSAs. This is particularly true in Mesa, Weld, and Denver counties. Much of the drilling occurs in Mesa and Weld counties and many of the headquarters or company offices  are located in the Denver MSA.

The IMPLAN model is designed to show how changes in employment or sales could impact the state economy. In this case, the Colorado Labor Market Information group has produced projections suggesting there will be a loss of 1,000 jobs in the oil and gas industry for 2015. The IMPLAN model indicates this will cause an additional loss of 1,800 indirect and induced jobs. In addition there will be a combined loss of $657 million in direct, indirect, and induced sales in the Colorado economy.

To date the robust mix of industries in Colorado has offset the job losses in the extractive industries. That is likely to continue for the remainder of the year and into 2016.

oil and gas industry

 

 

Colorado Job Growth is Solid – The Sky is Not Falling

There has been a streak of bad economic news within the past ten days; however, the fundamentals of the U.S. and Colorado economies are solid and the sky is not falling!

The Colorado Department of Labor and Employment announced the release of data showing that on average there are 65,900 more jobs for the first seven months of 2015 than the same period in 2014. The rate of increase is about 2.7%. While this level of job growth is solid, activity on the streets is much stronger.

Internationally, concerns have temporarily shifted away from violence in the Middle East. Worries have shifted to a slowdown in the economic growth of China, the magnitude of that slowdown, and the impact it would have on the global economy.Job Growth - The Sky is Not Falling

Earlier declines in the price of oil have not had the negative impact on the state that was initially expected by some economists. Colorado is a second tier state in terms of production and companies have taken numerous steps to increase their efficiency and maintain their profitability. Layoffs in the industry may be inevitable if the price for a barrel of oil remains at its current level, in the low $40s, for an extended period.

Through seven months average employment in the extractive industries is about 700 greater than last year. That number will approach zero by the end of the year.

The recent volatility in the equity markets may be the sign of a long-overdue correction or the start of a bear market. Uncertainty in the equities market may cause consumers to remain cautious.

On a more positive note, Colorado new car registrations have been strong this year. On a YTD basis, more new cars have been registered in 2015; however, the rate of growth has slowed to about 5.0% this year, down from 11.2% growth in 2013, and 6.5% growth last year.

Net migration remains strong as people find Colorado an attractive place to live, work, and play. In part that is a driving factor for the construction industry.

On a year-to-date basis the top sectors for job growth are:
• Healthcare 14,000
• Accommodations and Food Services 13,200
• Construction 12,100

Combined these three sectors account for about 59.6% of the jobs added or 39,300 workers. Average wages for many of the occupations in these industries are well-below the state average.

There are concerns that an insufficient number of primary jobs are being added in Colorado. Primary jobs are important because they bring in money from the outside that is invested in the state economy. In addition, primary employers often have a local supply chain that supports the local economy.

To that point, the average number of manufacturing jobs is 3,900 greater than a year ago. Many of these workers have been added in the renewable energy sector and its supply chain and they are located in Weld County. The addition of new jobs in this area will offset job losses associated with the decline in the price of oil.

So far this year, the major disappointment is the Information Sector. Declines are expected to continue through the end of the year.

On a year-to-date basis, the Government sector has added about 4,900 jobs. On a percentage basis, the greatest number of jobs has been added in K-12 and higher education. After seeing cutbacks for two years, the Federal Government is on track to add about 400 positions this year.

In addition to this data, CDLE will release a report later this month showing that Colorado job growth for the first quarter may be revised upward by 15,000 to 20,000. The bottom line is that Colorado’s employment is  much stronger than currently being reported.  Unequivocally, the sky Is not falling.

What Are the Real Challenges Facing the Extractive Industries?

The extractive industries have been a critical part of the Colorado economy for more than 150 years. The sector has been responsible for high-paying jobs in rural areas that have in turn stimulated growth in other sectors. In addition, the fuel, minerals, and metals have been utilized in ways that have improved our quality of life and made the United States a leader in innovation.

In 2014, the estimated value of the state’s extractive industries was projected to be $17.2 billion, broken down as follows:
• $7.0 billion – natural gas
• $6.7 billion – crude oil
• $2.2 billion – minerals
• $0.9 billion – coal
• $0.4 billion – carbon dioxide.

Despite its importance, the extractive industries have faced significant challenges.

“The Event”

For many years, the extractive industries were allowed to focus almost exclusively on extraction. Without regulation, pressure from industry members, or outside groups, insufficient attention has been paid to the impact of the extraction process.

This was evident when waste from Gold King Mine, near Silverton, recently spilled into Cement Creek. The plume of dirty, yellow water slowly made its way into the Animas River, which flows through Durango, Colorado and Farmington, New Mexico on its way to Lake Powell.

“The event” included a spill that contained a variety of pollutants and it was reported to be similar in volume to six Olympic- sized swimming pools. Within a week, the plume had passed through New Mexico. In Durango the pollutants either settled to the bottom of the river or the volume in the Animas River was great enough to dilute them or push them downstream. As a result, water tests indicated the concentration of pollutants had returned to acceptable pre-event levels – whatever that means.

The reaction to “the event” has been varied:
• Some think it is a disaster, catastrophe, and travesty.
• Initially, some were concerned because of the damage to the environment. As soon as the governor drank from the river, they rearranged their priorities and became concerned about the damage to local rafting companies and tourism businesses.
• Others have taken a wait and see attitude. They have asked, “What is the long-term damage?”
• There are a group of people who are focused on they blame game. They want to blame the mining industry, political parties, special interest groups, and government for “the event”. Others have gone so far as to speculate that “the event” was planned as a part of a conspiracy between the government and mining companies.
• From a historical perspective, “the event” is old news. For decades there have been pollutants in the Animas River as a result of runoff (Mother Nature) and leakage from mines. It wasn’t that long ago that the Smelter Mountain Mill, located in the south end of Durango, produced uranium for the Manhattan project.

Colorado Geological Survey

The website of the Colorado Geological Survey addresses the challenges they face in overseeing the industry.

“Prior to 1977 there were virtually no laws in the United States requiring that mines be reclaimed when mining was completed. Today the Colorado Division of Reclamation Mining and Safety is responsible for assuring that mined lands are restored under the Colorado Mined Land Reclamation Act and the Colorado Land Reclamation Act for the Extraction of Construction Materials. However, prior to those laws, when mining was completed, the companies just walked away leaving piles of waste and dug out holes. Thus, Colorado was left with an estimated 23,000 abandoned mine lands (AML).

Abandoned mines present very dangerous physical hazards to the public. High priority physical hazards identified by the Colorado Geological Survey for the USFS AML inventory are being jointly mitigated by the USFS and the Colorado Division of Reclamation, Mining, and Safety (DRMS). Mine workings are notorious for containing “bad air” including carbon monoxide, carbon dioxide, and hydrogen sulfide. These gases can kill unwary explorers of these old mines by asphyxiation. The old workings and structures can be very unstable and collapse without warning. Dangerous sites close to public access are being safeguarded through filling, capping, or gating the abandoned mine openings with engineered structures.”

Addressing the Challenges

Many in the state and the Four Corners areas will focus on the perspectives mentioned above.  The verbiage from  the Colorado Geological Survey shows this is not a simple problem, with a simple solution.

Colorado’s extractive industries are critical to the state’s economy and to the security and innovative leadership of the United States. Oil and coal are the backbone of the country’s transportation and utilities system. Rare and heavy metals are essential for the aerospace, biosciences, renewable energy, health care, transportation, defense, and environmental industries.

It is necessary for the country, including Colorado, to continue to drill for oil and gas and extract minerals and metals from the earth. Since 1977, government agencies and companies have been held to stricter standards for monitoring the impact of the extraction process. As has been recently demonstrated in Silverton, the efforts to monitor and manage pollutants are not perfect. The important point is that efforts are being made and they will be improved after “the event.”

With good fortune and sufficient funding, the state will remain diligent in its efforts to deal with the 23,000 abandoned mines.

Good luck to the local, state, and federal officials, agencies, companies, and special interest groups who will address the challenges facing the extractive industries in the years ahead.

Challenges Facing the Extractive Industries
The Animas River in Farmington, New Mexico as the plume of water from the Gold King Mine passed through town.