Colorado's mines, wells produce mother lode in '04
By Gargi Chakrabarty, Rocky Mountain News
February 1, 2005
Break out the erasers, and change 2003's $6 billion to almost $9 billion
for the value of Colorado's natural gas, coal, oil and mineral
production in 2004.
The $8.74 billion estimate, up about 44 percent from the previous year,
will be released Wednesday by the Colorado Geological Survey during the
107th National Western Mining Conference, held Wednesday through Friday
at the Hyatt Regency hotel in downtown Denver.
The theme of the conference is "Colorado Mines the World," underscoring
the state's burgeoning importance in the mining industry.
James Cappa, chief of the survey's mineral resources section and author
of the report, said it will be tough this year to surpass 2004's
"I don't know how we can beat 2004," Cappa said. "I think gold and
molybdenum prices will level off this year and so will oil prices.
"I think maybe we will produce 30 percent more natural gas this year. So
if prices remain the same, the value of gas alone could be $7 billion to
$7.8 billion in 2005. But I could be dead wrong."
More than two-thirds of the total value in 2004, or $6 billion, came
from natural gas. Colorado is estimated to have produced a record 1.1
trillion cubic feet of gas in 2004, buoyed by skyrocketing prices on the
back of growing demand from power utilities and residential homes.
Another $1 billion came from non- fuel minerals, including gold,
molybdenum, sand and gravel - a 42 percent increase from $702 million in
In fact, molybdenum - used to harden steel - is the underrated mineral
that has made a huge comeback in recent years thanks to growing demand
for steel in China, which has become a net importer of the mineral.
The average price of molybdenum was $18 a pound in 2004, a far cry from
$2.36 a pound in 2001. At the end of last year, the price stood at $37 a
pound, a level it retained in the beginning of 2005.
Cappa said the Henderson Mine added a third labor shift in 2004, making
it a continuously operating mine that helped produce 28 million pounds
of molybdenum last year - up from 22 million pounds produced in 2003.
Located outside Empire in Clear Creek County, about 50 miles west of
Denver, Henderson is one of the biggest molybdenum mines in the state.
Colorado's coal production touched a record 40.1 million tons in 2004
for a value of $1.08 billion. The state is on track to produce a similar
amount this year, although Peabody Energy - the world's largest coal
producer - is closing its Seneca mine near Steamboat Springs this year.
The value of Colorado's oil production in 2004 remained more or less
flat at $600 million.
Despite the record level of oil and gas drilling in 2004 (the state
issued 2,917 drilling permits last year), the number of complaints
dropped, albeit marginally, to 146 from 156 in 2003, the Colorado Oil
and Gas Conservation Commission reports.
"The complaints vary from concerns about impacts to ground water to
noise to property damage to weeds to land reclamation," COGCC Director
Brian Macke said. "I'd say in 2005, the number of complaints will remain
at or above the level in the past couple of years, given the heightened
level of drilling and increasing number of active wells.
"Also, there could be an increasing number of potential conflicts in
areas used for rural residential developments now being used for
drilling activities, and those developments approaching on areas
historically used for oil and gas drilling activities."
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