Posted 10.01.2009

Natural Wonders: Colorado is rich with mineral and energy resources

And plenty of untapped potential

By David Lewis

Gold. Coal. Oil. Natural gas. Wind. Water. Solar.

Colorado is blessed with an abundance of mineral and energy resources. Mining was the main reason the state came into being, followed by ranching, which developed largely in order to feed those thousands of hungry miners. From the founding of Denver - based on a gold strike that failed to pan out - to the ‘59ers of the Pikes Peak Gold Rush - the state always has been identified with its resource wealth.

Times have changed, of course. Today, mining, oil and gas, and other mineral extraction industries are a minor part of Colorado's economy, representing about 4 percent of the whole. The state's top economic category, services, made up 28 percent of the state economy.

Colorado, which a century or so ago ranked first or second among states in non-fuel minerals production, in 2006 stood at No. 13, down from No. 10 in 2005. (This is according to a study by the U.S. Geological Survey and the Colorado Geological Survey, the latest data available.)

Leading minerals statewide, in order, were for the most part less glamorous than our storied history would lead one to believe: molybdenum concentrates and construction sand and gravel, followed by portland and masonry cement, gold, and crushed stone, according to "The Mineral Industry of Colorado."

Including oil, natural gas, coal and other minerals, mineral production reached $11 billion in 2007, "as a result of increased production and higher energy prices," says the "2008-2009 Colorado Economic Development Data Book."

Meanwhile, you may have heard that there is a movement away from the fossil fuels portion of the above, with Gov. Bill Ritter leading the charge toward cleaner energy such as solar and wind. There, potential production remains mainly... potential. The good news is, Colorado has plenty of that, with abundant wind fortuitously gracing the portion of Colorado that most needs energy relief - the Front Range.

So what is the potential for future resource production here? Where are the cries of "Pikes Peak or Bust," or the equivalent thereof, going to come from?

To answer these questions, ColoradoBiz spoke with folks in the field from all over the state. Come with us as we tour the Centennial State's resources, region by region and resource by resource:

FRONT RANGE

Alternative: The Colorado Task Force on Renewable Resource Generation Development Areas was signed into law in 2007 in large part to map the state's renewable resources, dubbed Renewable Resource Generation Development Areas, or GDAs.

These are defined as "a concentration of renewable resources within a specific geographic region that provides a minimum of 1,000 megawatts of developable electric generating capacity." It concluded the Front Range was a wind GDA, but not a solar GDA. At the far end of the megaplex, Pueblo was deemed a solar GDA. In other words, the most populous area of the state has the potential to produce a gigawatt of electricity from wind and another from the sun. In yet other words, what blows around comes around.

The Front Range also is a world center of alternative energy technology companies. This example, from Faegre & Benson LLC partner Jim Spaanstra, head of the law firm's environment and natural resources practice, illustrates the role of technology in sometimes bridging the gap between old and new energy sources: Palmer Lake-based Auxsol Inc., which uses a patented technology already at work in the Denver Basin to separate oil from the sometimes nasty water that drilling produces.

"I've had folks say off the cuff that the Front Range of Colorado is this century's Silicon Valley in terms of the technology that is already emerging," Spaanstra says.

Mining and Minerals: The Front Range is not much when it comes to mining. The exception appears to be Boulder County's Cemex Inc. portland and masonry cement plant, plus much clay production. Potential for more? Perhaps, particularly if metals prices continue climbing.
One potential Front Range mine, Vancouver, B.C.-based Powertech Uranium Corp.'s proposed uranium operation in Weld County, suffered another in a series of setbacks in September when the Nunn town board voted against it.

The mine's ultimate fate likely will be decided at higher governmental levels, however. Meantime, Boulder-based Mount Royale Ventures LLC has been producing gold from its Gold Hill-based Cash Mine, while drawing praise for its environmentally savvy approach to the business.

Oil and Natural Gas: The Denver Basin (aka the Denver-Julesburg Basin) long has been among the state's premier oil and, especially, natural gas producing regions and it is by far the largest of the state's four major producing basins. While it might take an oilman to love oil, even alternative energy/ecology mavens crave its major product, natural gas.

"Natural gas is a vital part of the new energy economy, a permanent part of the new energy economy - not a bridge fuel, not a transition fuel, but a mission-critical fuel," Gov. Ritter said last July.

Weld County produced more than 150 million cubic feet of gas in 2008, third among all Colorado counties. According to the state Oil & Gas Conservation Commission, 904 drilling permits have been issued in Weld County in 2009, second place in the state and 27 percent of all permits here. This is an impressive number but a sharp drop from 2008. Drilling potential, here as elsewhere, doubtless will depend on global petroleum prices.

Water: The Front Range is locked in a usually quiet life-and-death struggle for water with the Eastern Plains and Western Slope, sharpened by the slow decline of the Denver Basin Aquifer.

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