( – promoted by Colorado Pols)
UPDATED 2/3/10–New Title, New Info and Old Diary
The NY Times is reporting:
GRAND JUNCTION, Colo. (AP) — Grand Junction has a national title it doesn’t want. The town led the nation with job losses last year according to federal labor officials.
The U.S. Department of Labor reported Tuesday that Grand Junction had the largest percentage drop in jobs for any metropolitan area. The number of jobs in and around Grand Junction went down 7.7 percent last year, from 67,100 at the end of 2008 to 61,900 in December of last year.
Grand Junction was hit hard by weak natural gas prices and job losses in the energy field. Its unemployment rate nearly doubled in the same period last year, from 4.7 percent to 9 percent.
As I noted in my diary from a few days ago, this is the anticipated result of over-reliance on a volatile commodity for economic stability. Ralphie has likewise covered this issue well.
It is, of course, a lesson that Grand Junction–and many cities and towns in the West–has lived through before. Will lessons be learned this time? Or will political leaders continue to demand that we put more of our economies into the shaky commodities basket, even though it hampers long term stability and may jeopardize other sectors of our economy?
1/31 Diary-Tipton, CO GOP want to hold Colorado back
Back to the future. That seems to be the summation of most of the talking points coming out of the GOP, which apparently prefers an economic future based on the past.
Take Scott Tipton, failed contender for the 3rd Congressional District up for another try. (First Tipton must best the ‘Cowboy Colonel’ Bob McConnell in the primary, who is busy fighting Marxism from his bunker in Steamboat Springs, and has the Tea Partisans’ endorsement).
Tipton is not one to allow substance to get in the way of concise but mostly empty slogans.
Tipton said he doesn’t support tax increases, but he does stand behind the creation of more coal-fired power plants, nuclear plants and energy production that will help create more jobs.
Tipton is also on record claiming he is running to bring “Practical solutions to real problems,” which tells us absolutely nothing.
But the mendacity of empty slogans aside, this refrain also reveals the myopic pandering at the expense of Colorado’s long-term economic stability that is becoming the hallmark of today’s Republicans in Colorado.
It is by now a tired refrain from the GOP that oil and gas must be given free reign in Colorado, that protecting adjacent landowners, local water supplies, and wildlife habitat are too onerous.
This has led to many ridiculous formulations, such as this gem from former gubernatorial candidate and lame duck Senate Minority Leader Josh Penry:
“There are a lot of these big office buildings that used to be populated and now they’re not because of these rules. …The mayor sat on his hands.”
The CO GOP has so aligned their talking points with industry that it came as a shock to Mr. Penry that COGA, the state’s primary oil and gas industry group, didn’t bother to clear the speakers’ list with their GOP acolytes.
This willingness to mouth whatever ridiculous tripe the Chamber or COGA pushes, leads to silly assertions such as this, from the capitol’s West Steps last week:
Bill Downey of EIS Solutions, of Greeley, said Gov. Bill Ritter would have people believe that jobs have been lost because of the economy. “That’s an insult.”
Real economists, however, tend to have a different view:
It is hard to believe that there is anyone in the country who does not know that we are in a deep recession. It has dramatically cut the demand for and, therefore, the price of most basic raw materials, especially energy. But the oil and gas industry keeps blaming Interior Secretary Ken Salazar for the decline in the leasing of and drilling on federally owned lands and the resulting job losses.
Oil and gas firms know better. Randy Teeuwen, spokesman for EnCana, North America’s largest oil and gas producer, characterized the current slowdown in drilling more accurately this past spring. He told the Pinedale Roundup in Wyoming that “We’re like most industries right now – banking, finance, auto industry, real estate. All the economic sectors are experiencing some downturn, and are sort of at the mercy of the national economy and the local economy.”
In June, EnCana announced that it would shut down large numbers of its producing natural gas wells in Canada and the United States until natural gas prices rose again. Other natural gas companies have done the same, as have most coal companies.
So it makes no sense to blame Secretary Salazar for the decline in interest in new federal oil and gas leasing. Blame the recession for causing the prices of oil, natural gas, and coal to tumble dramatically, by 40 to 70 percent between summer 2008 and summer and fall 2009. That is why there has been less enthusiasm among companies for leasing more federal lands for oil and gas development.
Facts, perhaps, do not matter to the reality-challenged or overly-ambitious. But the path they want to take us down is bad for Colorado, and worse yet for the very areas that Tipton and Penry purport to represent.
The more eggs we put into a single economic sector–particularly one as notoriously volatile as energy commodities–the worse we do in bad economic times and over the long term.
There is a reason that Colorado’s regions most reliant on fossil fuel extractive economies have been near the top in foreclosures, increase in food stamps and other social safety nets, and have lagged the state in recovery. In fact, such a lag is expected. More reliance on these sectors means that when the next bust hits–and it will because it always does in resource-based economies–then these economies will falter and stumble more than their non-energy dependent peers.
But don’t take my word for it, I studied philosophy. Headwaters Economics–a non-profit western economic firm–has completed a detailed set of studies and reports on energy economies in the west. One report (pdf) “Fossil Fuel Extraction as a County Economic Development Strategy: Are Energy-focusing Counties Benefiting?” is particularly relevant here.
Two of its key findings are that:
It is well documented that counties focused on energy extraction as an economic development strategy have historically gone through periods of boom and bust-that their economies are volatile. What is less well understood is how these counties fare economically in the long term.
In the long run, the economies of energy-focusing (EF) counties grow more slowly than the economies of their peers that are not pursuing energy extraction as an economic development strategy.
From 1990 to 2005, for example, the average rate of growth of real personal income in EF counties was 2.3 percent per year, compared to 2.9 percent in the peers. In terms of employment, the average annual growth of EF counties over the same time period was 1.8 percent, compared to 2.3 percent for their peers.
Compared to their peers in the West that have not pursued energy development as an economic strategy, EF counties over the long term are characterized by:
• Less economic diversity and resilience• Lower levels of education in the workforce
• A greater gap between high and low income households
• A growing wage disparity between energy-related workers and all other workers
• Less ability to attract investment and retirement dollars
These long-term indicators suggest that relying on fossil fuel extraction may not be an effective economic development strategy for competing in today’s growing and more diverse western economy.
I have been around the block a few times. I understand that politicians will say many things to get or retain power. Maybe they believe it, maybe its just a game.
In any case, the cry from the Colorado GOP to make our economies more reliant on the most volatile sectors of our economies is wrongheaded. It is a sentence to repeat the painful boom and bust cycles that have hampered western communities for decades, and it would take us back, not forward into the 21st Century.