For an Energy Boomtown in Colorado, Heady Days Bring Growth and Anxiety

The town of Rifle is buoyed by a surge in natural gas drilling, but it can't forget the last oil bust.

A new housing development at the north end of Rifle, Colo.

RIFLE, COLO.—It's a little after 5 a.m. on a workday. Dozens of men are piling out of cars and trucks, shuffling across the parking lot, and boarding buses heading north to the natural gas fields. They are wearing jackets, jeans, and baseball caps and not saying much of anything. Their heads are lowered and heavy. Behind them, the Rocky Mountains are barely visible.

These men are part of an influx, a nomadic tide of workers—day laborers, engineers, subcontractors, machine operators, maintenance men—streaming into this small town in western Colorado and the surrounding region amid the wild glow of a new energy boom. Many of them have found lodging together, snatching up hotel rooms, cheap apartments, or long-term rentals, or crowding with other families into single-family homes. Others, usually single and Hispanic, are living in company-built "man camps"—huddles of trailers tucked away in the vast expanse of northwestern Colorado's Piceance Basin.

Powered by a new wave of natural gas drilling, Rifle, a once sleepy town of about 10,000 people, is being transformed. More than 2,500 new homes are planned or under construction. Unemployment is virtually nonexistent. The air is filled with a dusty excitement, but also a familiar dose of anxiety.

Black Sunday. After all, Rifle has been here before. It isn't just some modern-day boomtown riding the country's latest push for domestic energy. Rather, it's a boom-bust-boomtown, or a boom-bust-boom-bust-boomtown, depending on how far back one goes. Most recently, in the late 1970s, Rifle was at the center of a highflying oil shale boom in which energy companies poured hundreds of millions of dollars into the region, racing to find ways to liberate oil from underground shale. But when gasoline prices fell sharply in the early 1980s, so, too, did investment in "nontraditional" oil.

Exxon, the largest company in the area at the time, closed up shop on "Black Sunday," May 2, 1982. In a single day, 2,200 workers lost their jobs. Local bars thrived for about a week. Then, a 20-year recession set in.

Today, another boom is taking hold, this time involving natural gas. It's being spurred by rising energy prices and more sophisticated technology that enables companies to drill horizontally as well as vertically. New permits for wells jumped nearly 70 percent from 2005 to 2007 and are projected to rise an additional 20 percent this year. Along the interstate at night, tall, white drilling rigs glow brightly, lighting up nearby mountains. By day, the roads are full of pickup trucks shuttling around heavy equipment and tankers from industry giants like Halliburton. On top of all this action, there is a renewed push by some companies to revive the long-dormant oil shale sector.

During its previous energy booms, Rifle stubbornly maintained the quaint hallmarks of a small town founded in 1882—a main street, corner saloon, store names displayed in western block-style fonts—at the expense of modern conveniences. "If I wanted to buy a shower curtain, I had to drive 63 miles to Grand Junction or 26 miles to Glenwood Springs," says Police Chief Daryl Meisner, who has lived in Rifle for 56 years. But a wave of slick-looking retail franchises recently opened up, among them a Wal-Mart, a Starbucks, and a Taco Bell-Long John Silver's. Just down the street from the Rusty Cannon Motel, a new Hampton Inn is being built, and four more hotels are sprouting up.

The city's mayor, Keith Lambert, estimates that the local population could swell as high as 30,000 by 2025. The city has spent nearly $40 million on new infrastructure proj-ects; another $35 million to $40 million of projects are planned. Housing vacancy rates in Rifle are less than 1 percent, Lambert says.

But the growth is creating complications and arousing feelings of ambivalence among longtime residents. Crime rates, though still low, are up. The town's 22-person police force responds to about 1,400 calls per month—double the number of just a few years ago. Reports of domestic violence and alcoholism are more common. Several new schools are being built to alleviate overcrowding. In many classrooms, the majority of students are Spanish speakers, the sons and daughters of migrant workers coming from states like Texas and Oklahoma. And even amid a national housing crisis, house values are appreciating at a rate of about 25 percent. Simple townhomes now cost close to $300,000.