New deal promises more local energy jobs
Two major companies are teaming up to bring more energy development and hundreds of jobs to Western Colorado.
Under a new agreement Encana Oil and Gas and Nucor will double the amount of oil wells in Colorado’s Piceance Basin.
Encana needs money for new wells and Nucor, one of the nation’s largest steel manufactures, relies on natural gas to run its business.
They’ve come up with an agreement that the companies say is a win-win.
Nucor is getting natural gas by striking a deal with Encana.
"We’re meeting their demand and at the same time they're putting dollars into our drilling programs," Doug Hock, PR director for Encana Oil and Gas, said.
Through this joint venture, Nucor will pay for half the cost of new wells and extra in interest. In return, Encana will give it half the natural gas it drills.
"This is good news for people in Western Colorado in terms of jobs and in terms of sustained economics,” Hock said. “It helps us stretch our dollars and for Nucor it provides a future supply a raw material that they need at a moderate cost."
What this means for local drilling is new rigs, double the amount of oil wells, and hundreds of new jobs over the next twenty years.
"It’s very innovative, Diane Schwenke, with the Grand Junction Area Chamber of Commerce, said. “I applaud both companies and I’m looking forward to the positive benefits here in the Grand Valley from the deal."
The chamber of commerce also hopes the arrangement will shorten the commute for local energy workers.
"To actually have good news about increased activity could be really good for a lot of our residents who have to go outside the area to find jobs,” Schwenke said. “It will bring them back together with their families."
Encana and Nucor will jointly determine how many new wells will be drilled annually.
Either company can get out of the deal if natural gas prices fall below an agreed upon amount.
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