In my other life apart from developing CASTrader, I sometimes consult on projects where slope stability and landslides are an issue. Such is the case the past few weeks as I am involved in the construction of a new gas well stuck high up on a cliff in a landslide area. The oil and gas boom has created a lot of activity around the Piceance Creek Basin (PDF), a portion of the home of more potential oil than Saudi Arabia (if you can get it out). Oil and gas companies seem to be drilling anywhere and everywhere. Around the town of Parachute, where I'm staying, motels are 100% full of all sorts of contractors - the place is hopping with activity. Property values are way up, along with everyone's salaries. Local word is it's pretty easy to earn $100,000+ if you have what they want and are willing to work. It's not quite the wild west atmosphere of the previous energy boom when inflation-adjusted oil was these levels and oil shale projects were red hot, but it certainly reminds me of that period.
Just the fact that about everyone with a pulse who has any know-how at all is being wooed to lend a hand makes me wonder if oil is peaking in price rather than quantity produced. The history sure is rhyming. I made a friendly bet with someone about a year ago that oil would not hit $100 before 2010 just as it was zooming past $80, as I felt is was soon to peak or at least plateau. Seeing this boom first-hand, one gets a healthy respect for it.
At night, the Colorado River valley between Newcastle and Parachute is lit up with the activity of several dozens of drilling rigs. Assuming the well I am working on is a producer, it will be online in a matter of months, like so many of the other wells being drilled. Such is the case with current energy prices that have set off a boom the likes of which have not been seen in 30 years. Although there's certainly counterparts to these wells that are seeing production declines, at least in this little corner of the world, new supply is far outstripping decline.
It's certainly nice to get out in the wilds a bit, and while I've had some good photographic opportunities of peaks, plateaus and canyons (the view from my work area is at left), I haven't done much with CASTrader. It's been far easier to get out exploring the surrounding area at night after work, collecting a few scrapes, bruises, sore legs and photos along the way than code CASTrader. That will change when this well pad is done in the next few days, at least until the next offer I can't refuse comes along. Until then, here are a few photos I've taken of the surrounding country.
Update: Brett Steenbarger covers the geopolitics of oil, particularly in Iraq, which could definately impact the price of oil.
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