Energy Deal to Provide Hundreds of Jobs Locally, Nationwide
KREX News Room
GARFIELD COUNTY, Colo. - In Nov. 2012, Encana Oil & Gas struck a deal with Nucor Energy to establish a long-term 50/50 drilling program for natural gas wells on 50,000 acres of Encana-owned land in the Piceance Basin.
Two rigs are now in operation as part of that deal. The partnership allows both companies to extract natural gas at the most cost-effective price.
NewsChannel 5 was there as crews prepared one of two massive natural gas rigs Wednesday. Encana officials were able to see their vision with Nucor Energy take shape.
"Nucor is providing half of the capitol up front for this project to drill these wells. In return, they get half of the gas," said Doug Hock, director of community and public relations for Encana.
Nucor uses this gas in their steel-making process at a facility in Louisiana.
"This provides them with a long term supply of natural gas at a modest price," added Hock.
It also brings oversees jobs back to the U.S., to the tune of about 150. At $75,000 a year average salary, that's twice the median income in that part of the state.
And locally, "it provides Encana capitol to continue to drill and continue to be active in Colorado," added Hock.
He says there's enough excess natural gas in the market for gas prices to remain low for the foreseeable future, which would normally slow or halt production.
So it's partnerships like this that help sustain jobs and growth for the economy. Hock even sees it as a trend of the future.
"This kind of a deal where manufacturers, fertilizer plants, chemical plants, steel manufacturers, they all use natural gas. And deals like this are allowing us to take the natural gas that we develop here in Colorado, here in the United States, and use it on-shore to not only provide jobs for drilling, but also jobs for manufacturing," he explained.
Encana estimates this 20-year deal could double their current 4,000 wells. This would bring production to around 8,000 wells and sustain hundreds of Western Slope jobs.
"This is a win-win. It's a win for Western Colorado's economy. It's a win for Encana in terms of providing well-paying jobs. It's a win for Nucor in terms of a supply of natural gas that allows them to have manufacturing here in the United States," Hock said.
Encana and Nucor have three more rigs planned over the next three years in the Piceance Basin in relation to this partnership. The two companies also have multiple wells from a prior, smaller natural gas drilling agreement established in 2010.