San Juan County pins economic hopes on energy development

by Buckley Jensen

Despite the recent disappointing news that the Lisbon Valley Copper Mine is suspending mining operations and laying off 101 workers, energy production in the county is steamrolling ahead.

It is propelled by a combination of record high energy prices, fears of global warming, and the insatiable world appetite for fuel and electrical power. Uranium, oil and natural gas are the major players in the current energy boom in San Juan County.

Uranium: Large covered trucks, which are carrying tens of thousands of tons of uranium ore from area mines to the Dennison mill south of Blanding, rumble through the county every day. Dennison is finishing up an $80 million renovation at the mill, and is gearing up to begin round-the-clock production of yellow cake as the only federally licensed uranium mill in the nation. They are also developing several of their mining properties for increased ore production.

Others mills are in the process of planning and approval by the U. S. Nuclear Regulatory Commission, including one near Naturita, Colorado.

Energy Fuels, Inc. (the same company which developed the Blanding Mill in the 1970s) has acquired acres of land in the Montrose Valley west of Naturita and hopes to begin construction as soon as the licensing process is complete.

Another mill, mothballed 20 years ago before it began production, is also being licensed and ready for production. The complex is north of Bullfrog in Garfield County.

The economic residuals of the mining and trucking of uranium ore may eclipse even the glory days of the boom of the 1950’s if current projections come to fruition.

In the January 27 issue of the Deseret Morning News, Editor Joe Cannon wrote “over the next 25 years, the U.S. will need 300 new 1,000-megawatt power plants. We must not and should not opt for more coal-fired generation. I would believe this even if climate change were not an issue. We are running out of time and by not choosing to aggressively build nuclear power plants, we are deciding to default to coal fired plants”

Last year Gwyneth Cravens, novelist and editor of the New Yorker Magazine wrote a book about her odyssey from nuclear protester to pro-nuclear power advocate. She writes, “We do not have to pollute the earth in order to have modern civilization. America must make decisions soon about nuclear power. As the biggest producer of greenhouse gases we have an ethical responsibility to the rest of humanity… and to our children and grandchildren.”

Last week, according to Cannon, Britain (which generates 20 percent of its power from nuclear) committed to a new generation of nuclear power plants and hopes to some day equal France, which currently generates 80 percent of its entire power needs from the atom.

China and India are committing enormous resources to nuclear energy for their future power needs.

Utah may also have its first nuclear power plant, if efforts to obtain land, water rights and permits from the State and the NRC (Nuclear Regulatory Commission) are successful.

The proposed site for the multi-billion dollar project is near Green River in Emery County. The enormous amounts of water necessary for the project have mostly been secured and will come out of Utah’s share of the unused portion of water guaranteed by the Upper Colorado River Basin Compact.

Much of this unused water is presently being lost to the lower basin states of Arizona and California.

All this nuclear activity bodes well for Southeastern Utah, because some of the largest deposits of low grade uranium ore in the world are located here.

Oil: While oil is unquestionably the largest producer of wealth and tax revenue to San Juan County at the present time, there is little hope that additional wells will be found in sufficient number to make much of a difference in the future. The Aneth and Lisbon Oil Fields have produced millions of barrels of oil over the past 50 years, but pumping the remaining oil is more expensive and difficult. These old wells will eventually stop producing, and if nothing fills the void, present county assessed valuation would drop by half.

Natural Gas: When the oil fields in San Juan were being developed decades ago, natural gas was a nuisance. Not worth enough to build pipelines to transport it, much of it was simply flared off (burned) so drillers could get at the oil.

Today, the energy industry is going after this precious commodity as never before. Many old oil wells that were capped, but contained natural gas, are being redeveloped today to become gas producers.

In the past two years in San Juan County, the mineral rights to thousands of acres of land between La Sal and Blanding have been leased. Many landowners in the Monticello-Eastland area have leased their mineral rights, usually for five years, for up to $140 an acre plus royalties on anything produced.

There are presently six steel pipelines being built in San Juan County, at a cost of more than $26 million. Anyone driving around in the area between Monticello and Eastland will see pipeline crews laying miles of pipe which will gather the natural gas from old oil wells and some of the exciting new discoveries.

These expensive piplines will transport the raw gas to the huge Encana gas purification plant in Lisbon Valley for refining. After impurities and undesirable gases have been removed, the pure natural gas will be sent out of the county by pipeline to the national gas grid which services all of North America.

While nobody will say at the present time what kind of gas reserves are being found in the current drilling, it doesn’t take an expert to deduce that they must be large reserves in order to justify the enormous costs of building the collector pipelines presently under construction.

This activity (done in relative anonymity to date) will greatly increase the assessed value of the county. Because of the competitive nature of bidding for mineral leases (and other factors) it has not been easy to get details.

However, the San Juan Record hopes to report news of these developments as facts become available. In any event, this should provide another major economic stimulus for the area. Perhaps some of the landowners who leased their mineral rights for exploration will become the Charlie Steen’s of the 21st Century. Stay tuned.