Colorado's hydrocarbon resources
Colorado is rich in hydrocarbon resources, notably comprising significant oil and natural gas reserves. The state is home to the fourth-largest oil field in the United States and eleven large natural gas fields, contributing approximately 5.9 percent of the nation's natural gas production as of 2015. Key areas for oil extraction include the Denver-Julesberg Basin, which holds an estimated 2 billion barrels of oil, while coal deposits also play a vital role in the state's energy landscape. Despite its substantial hydrocarbon output, including about 3.5 percent of the nation’s crude oil, Colorado is increasingly focusing on natural gas for heating and electricity generation.
Nonetheless, the state has a history of underutilizing its renewable energy potential, despite its favorable conditions for solar and wind energy development. The renewable portfolio standard aims for a significant increase in renewable energy sources by 2020. Colorado also has made strides in incorporating wind energy, with ongoing projects showcasing its capacity for sustainable power generation. This balance of hydrocarbon reliance and growing interest in renewables reflects both economic opportunities and environmental considerations in the state's energy sector.
On this Page
Subject Terms
Colorado's hydrocarbon resources
Summary: One of the wealthier US states, Colorado is also rich in hydrocarbon resources. The United States' fourth-largest oil field and eleven of its largest natural gas fields are located in Colorado, which accounts for nearly 6 percent of the country’s natural gas production.
Encompassing most of the southern Rocky Mountains, Colorado lies at the western edge of the Great Plains and, while one of the largest American states, is also one of the least densely populated. It is also among the wealthiest, with the sixteenth-highest per capita income in 2016. Originally a state dependent on its agricultural economy, Colorado has diversified and has especially benefited from its central location in the United States. As a result of that location, it is a prime area for federal government offices; the Denver metropolitan area employs more federal workers than any other except Washington, DC.
Denver is home to the US Court of Appeals for the Tenth Circuit, the Denver Mint, and the Denver Federal Center, with offices for 26 federal agencies in 90 buildings. The National Institute of Standards and Technology and the National Oceanic and Atmospheric Administration both make their home in Boulder, just outside Denver. The North American Aerospace Defense Command (NORAD) and the Air Force Academy are based in Colorado Springs. The ADX Florence supermax prison is located near Canon City, along with several other federal prisons.
Proximity to these federal agencies has also drawn numerous government contractors to Colorado, including Lockheed-Martin and Ball Aerospace. Denver enjoyed a tech sector boom in the 1990s, although that has since slumped. However, industry still thrives in Colorado, in part because of plentiful hydrocarbon resources. The country's fourth-largest oil field and eleven of its largest natural gas fields are located in Colorado, which accounted for 5.9 percent of US natural gas production in 2015. Less than one-quarter of this natural gas production is coal-bed methane. The oil industry expects to extract as many as 2 billion barrels of oil from the Denver-Julesberg Basin, one of Colorado’s oil shale deposits. Because of Due in part to shale oil, Colorado produced about 3 percent of the country's total crude production in 2015.The state also has substantial coal deposits.
Crude oil production in Colorado accounts for about 3.5 percent of the country’s total, mostly in the Piceance and Denver Basins. The state also maintains 0.6 percent of the country's total refining capacity. Two refineries north of Denver, in Commerce City, refine the state’s crude oil, and additional oil is brought to market by pipelines from Texas, Oklahoma, and Wyoming. Natural gas production and consumption have both been steadily increasing. Over 71 percent of Colorado households heat their homes with natural gas, and utilities have been relying more and more heavily on natural gas for electricity production. Only about one-quarter of the natural gas produced in Colorado is consumed in the state; the rest is sold to markets in midwestern and western states. The Rockies Express Pipeline transports natural gas from Colorado to Audrain County, Missouri, and Clarington, Ohio.
Most electricity production in Colorado originates at power plants burning coal (about 60 percent) and natural gas (over 20 percent). Colorado produces about double the amount of coal that it needs; the remainder is sold throughout the country.
The state has no nuclear power plants. The Fort St. Vrain Generating Station was Colorado’s sole nuclear plant from 1977 until 1992, but it was less profitable than its investors had hoped, and after its decomissioning as a nuclear power plant, it was converted into a natural gas combustion plant, operating in combined-cycle mode by using heat recovery steam generators to recover waste heat for a second stage of generation.
The remaining amount of Colorado’s electricity generation comes from hydroelectric and wind power. The state’s considerable hydrocarbon resources have caused it to neglect the development of its renewable energy resources, though the potential for renewables is as vast: the state is predominantly sunny and possesses many locations well suited to wind farms. The state’s renewable portfolio standard has mandated that by 2020, 30 percent of the state’s electricity will come from renewable sources, roughly six times the 2010 share.
The Ames Hydroelectric Generating Plant near Ophir was the world’s first commercial power plant transmitting alternating current (AC), launched as a Westinghouse Electric project in 1890 during the War of Currents between Westinghouse (as patron of Nikola Tesla) and Thomas Alva Edison (proponent of direct current). The Ames plant helped to prove that alternating current was more efficient. The plant is still in service, albeit without the original 1890 equipment; today it uses a generator installed in 1904.
Two of the largest wind farms in the state are the Peetz Table Wind Energy Center, using 133 turbines to produce 199.5 megawatts, and the Cedar Creek Wind Farm, with 221 turbines generating about 300 megawatts. A 2010 report by the National Renewable Energy Laboratory showed that the state has nearly 400,000 megawatts in wind power potential. As of early 2016, the state boasted approximately 3,000 megawatts of installed wind capacity.
A biomass plant in Vail burns the thousands of trees killed by a pine beetle infestation for cheap, renewable energy, while reducing the risks of forest fires by clearing the Colorado forest of dead wood. Denver was the first metropolitan area to require that gasoline be blended with ethanol in order to reduce emissions, but Colorado has been slow to implement large-scale ethanol production. The Coors brewery in Golden uses its waste beer to produce ethanol fuel, significantly reducing the plant’s emissions as well as cutting costs. In the northeast, ethanol from corn is produced at a number of small facilities.
Bibliography
Energy in Colorado. Colorado Energy Office, State of Colorado, 2017, www.colorado.gov/pacific/energyoffice/energy-colorado. Accessed 18 Sept. 2017.
Klucas, Gillian. Leadville: The Struggle to Revive an American Town. Washington, DC: Island Press, 2004.
Scamehorn, Lee. High Altitude Energy. Boulder: University Press of Colorado, 2002.
U.S. Energy Information Administration. “Colorado.” http://www.eia.gov/state/state-energy-profiles.cfm?sid=CO.
U.S. Energy Information Administration.Top 100 U.S. Oil and Gas Fields. US Dept. of Energy, Mar. 2015, www.eia.gov/naturalgas/crudeoilreserves/top100/pdf/top100.pdf. Accessed 18 Sept. 2017.