HispanicBusiness

Weld County is on pace to produce almost 80 percent of the state's oil output this year, bringing with it continued development and challenges with which the industry and local politicians must grapple.

Last year, Colorado hit a 50-year record in oil production of 49.1 million barrels -- and Weld oil and gas producers pumped in almost 75 percent of that.

"Weld appears it will become the new dominant center of oil production in the state," said Pete Stark, an oil and gas analyst with IHS in Denver, a global market information and analytics company. "There's no doubt about that. Essentially, 90 percent of the drilling in the state is going on in Weld County now."

Already in January, Weld produced 79 percent of the state's oil, though numbers are being updated daily by the Colorado Oil and Gas Conservation Commission. Weld's January production since 2006, however, seems to have been an early indicator of annual production, toppling January's percentages by the end of each year.

If that pattern continues, Weld could surpass that 80 percent total for 2013. That's a far cry from the 35 percent the county produced in 2000 .

"We're going to see a really interesting period of time for Weld County," said Ed Holloway , president and CEO of Synergy Resources, one of the only local oil and gas producers actively drilling in the Wattenberg field, lying beneath much of Weld. "It only creates a ton of opportunity. This is going to be here for a while. It's not a shot in the dark, but maybe the late part of the second inning."

Since an experimental well named Jake gushed in northern Weld in late 2010, the oil and gas industry has taken advantage of growing technologies and improvement in practices to maximize oil production in a field that was for years thought more suited for gas production.

By the end of 2012, however, oil production in Weld had grown 76 percent from Jake's day in the sun.

"It continues to be the gift that keeps giving," said Sean Conway, a Weld County commissioner who has championed the industry's economic benefits to the county.

Years ago, the Rangely Field in Rio Blanco County on the Western Slope was the top oil producer in the state. By the end of 2012, the county produced just 9.8 percent of the state's oil, according to COGCC data.

"What we're seeing is there is a new king coming back on top of the hill," Stark said.

As technology grows, so too has production. When Jake first hit, drillers concentrated on one bench of the Niobrara shale zone 7,000 feet below ground, with one way to drill. Today, companies have long since tapped all three Niobrara benches, plus the Codell, directly beneath it.

As companies continue to experiment, techniques have become much more efficient, capitalizing with higher production all the time. With the changes, drilling companies have become environmentally friendly, with some switching trucking and well-digging rigs to natural gas, drilling multiple wells from one drill pad, even recycling fracking water.

"We've gone through the proof of the pudding, and companies are only now really getting to the experimental work to decide exactly what the best template for drilling is going to be for the robust development drilling going forward," Stark said.

One possible template, he said, would be one drilling pad in the center of a 3-mile zone, with the ability to drill four to six horizontal wells in each of the oil-producing zones. Horizontal wells are drilled more than a mile beneath the surface, then cut through the rock parallel to the surface for sometimes up to 9,000 feet. It has allowed drillers to extract as much oil from one well as several vertical wells in the past.

"So you're looking at 24 wells, maybe 7,000 feet to north, and another 24 wells maybe 7,000 feet to the south, all from one pad," Stark said. "It sort of centralizes where it would be rather than looking like a porcupine sat on top of Weld."

But high production already has brought with it challenges for Weld that have made life tougher on residents who live near the sweet spots that have so far attracted drilling companies from as far away as Japan.

There are trucks, and more trucks, and negotiations for using residents' properties to drill. Pock-marked roads are left beneath the crushing weights of the heavy truck traffic. There's still not quite enough housing to handle the influx of workers. And growth continues to come with more companies coming to town, filling the area's restaurants, hotels and city coffers with extra taxes. Greeley and Weld, for example, are paid in severance taxes by the amount of oil and gas employees in the area. That grew by 400 workers in March from the previous year.

"We're in pretty good shape with the tax coming in being high enough to take care of the impacts," Greeley Mayor Tom Norton said.

Officials believe growth will not be unmanageable, as it was in North Dakota during the rush to the Bakken formation. Reports of workers pitching tents and standing room-only businesses that couldn't keep up with demand are worrisome.

"If Greeley was the only thing within a hundred miles, you'd see probably some devastating, out-of-control growth," Holloway said.

Conway said commissioners have created the proper relationships with the industry to address any problems immediately through a monthly working group with industry representatives and another with town mayors throughout Weld.

"It's going to require us to be more proactive, to listen to our residents and hear what they're saying and potentially identifying what challenges they face and how to mitigate them," Conway said.

"This is a great opportunity for Weld County. I'd hate to think where Weld would be without the activity in oil and gas activity in terms of unemployment, wage growth and all the economic activity it brings. It's an exciting time."

Last year, Stark said, the nation's oil and gas production increased by more than 1 million barrels of oil equivalent per day.

"That has happened only two other times in modern history," Stark said of the growth. "Once in Iraq and once in Saudi Arabia. (Now) Weld County is a big part of that."