The two states of Utah: A story of boom and bust

Numbers tell a troubling story for many families

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  • Fullypresent Salt Lake City, UT
    March 5, 2016 4:07 p.m.

    We shouldn't be buying one drop of foreign oil. We should try and produce enough to take care our country. The wars in the Middle East are to some extent over protecting our oil interests there. The Saudis are not our friends. I don't know why we pretend that they are. The Middle East is so unstable we should not be depending on them for any oil. That was a big mistake we made in the past. We should learn from history.

  • LindaGJ Salt Lake City, UT
    March 4, 2016 12:28 p.m.

    This is sad but true to a hundred years of history and more in extraction industries in the west. We never seem to think it will happen again, and it always does. The story doesn't seem related, but it is, to the gold mine flood pollution last summer. That industry too went out of business, and it left the mess behind. The interesting question is, "How clean will Uinta Basin be left when the extraction industry is gone?" As to the people hurting today, oil per barrel price is up about $15 from the bottom, they'll be back in business one day soonish, with a whole new batch of people who will eventually get hurt. Sad, but true.

  • essence Ivins, UT
    March 4, 2016 10:39 a.m.

    How many of these folks were "living within their means" and planning for the future? Were they stashing money away for the eventuality that they might be faced with this situation? What I've witnessed during my life is that people spend when they're "flush" as they say and then moan when the times get tough. How many new trucks and SUVs were purchased during the good times? At least they're getting a break at the pump now, which won't last forever because, of course, gasoline prices are bound to go back up again eventually and now have additional Utah gasoline tax to boot. This does not apply to all since many of the jobs that have been lost were probably low-wage service jobs in the first place so living hand-to-mouth is the norm. Having oilfield friends, I know these times can be tough. I also know that many spend while they have it with little thought to the future. Don't bet that Rep. Mike Noel, Rep. Ken Ivory and others who profess that getting public lands and renewing energy development to assist rural communities will save the day!

  • Happy Valley Heretic Orem, UT
    March 4, 2016 8:33 a.m.

    sherlock holmes said: "The oil counties have better, cleaner air than the Wasatch Front.

    Basin’s periodic high levels of ozone and particulate matter, claiming that Basin air is usually cleaner than Salt Lake’s. That’s a very low bar. Salt Lake is consistently ranked one of the worst cities in the country for acute spikes in particulate pollution. But that comparison is also misleading. Ozone and particulates are certainly hazardous, but they are not as toxic as VOCS (volatile organic compounds like benzene, toluene and xylene). A study by the U. of Colorado in the winter of 2012 and 2013 found shocking levels of VOCs in the Basin, as high as what would be generated by 100 million cars, eight times more than all the cars in Los Angeles. Because VOCs aren’t regulated by the EPA, public officials think they can ignore it. But make no mistake, this is a genuine pollution nightmare–to our knowledge, unequaled anywhere else in the country.

  • Hoopty6 OGDEN, UT
    March 4, 2016 8:19 a.m.

    It is too bad they were not trying to 'do more with less' during good times. Then all would be well now.

    Funny how the goobermint claims they are 'losing' money, as if they are entitled to OUR money and when WE (the people) lose jobs or have a hard time 'they' are 'losing' money. Thank your goobermint 'leaders' for the mess...

    Can't feel too bad for the oil industry though. All industries fluctuate. I have lost jobs before with swings in the economy (in a totally unrelated industry). We should ALL (goobermint AND people) try to do more with less and save more.

  • Something to think about Ogden, UT
    March 4, 2016 7:11 a.m.

    First, the problem is that we have been 'over' producing domestic oil. All our storages are full. We're even building more (Sand Springs, Oklahoma). The most recent 'boom' period was a false boom. We were simply filling our supply, with no substantial change in the demand.

    Second, Yes we do buy a lot of oil from the middle east. But sadly, that is our best tool for some measure of stability in that region. Anymore with the rise of ISIS its about the only tool we have.

    Third, yes the wages are good so save...right... the problem is, as mentioned by one post, local businesses use price increases which the oil field workers are forced to pay. So, there is little savings for the average worker. Locals take full advantage of the influx of transient oil patch roughnecks.

    Finally, fracking (good or bad for the environment) has given the industry the chance to get to oil they normally would not have chased. Again, this has caused over production leading to the current glut in the supply verses demand ratio.

  • NeilT Clearfield, UT
    March 4, 2016 4:46 a.m.

    Sean Hanning is always raving about North Dakota and how the oil industry provides all these great high paying jobs. I suspect the same situation is found in North Dakota. That is why I never take Sean seriously. Energy booms are always followed by energy busts.

  • Capsaicin Salt Lake City, UT
    March 3, 2016 9:51 p.m.

    Not a single one of these companies would be in a tough spot right now if they'd planned for the inevitable bust. Years and years of $100 plus oil and they can't save a dime?

  • Tekakaromatagi Dammam, Saudi Arabia
    March 3, 2016 9:24 p.m.

    @Brave Sir Robin:
    "Oil prices were relatively stable until 2005 when oil companies realized they could charge whatever they wanted for their product . . ."

    That happened in 1973, not 1995.
    What happened in 2005 was that the world economy heated up and so did demand for energy. Oil is inelastic commodity: people still need the energy and if demands increases, consumers get into a bidding war and the prices jump.

    Then came shale oil from North Dakota with extra oil on the market. The same supply-demand curve from 2005-2008 kicked in to bring prices screaming down. The scary thing is that in a couple of years the prices will go screaming the other way.

    Food prices will swing also because fuel from oil is used to ship food. There will be foot riots in Bangladesh, Haiti, wherever. You'll get the Arab Spring again in a lot of other places (FYI, the Arab Spring was started by the high price of food.)

    Understand the world because if you don't others will take advantage of you.

  • Chancey Sandy, UT
    March 3, 2016 9:08 p.m.

    When the Saudi's and others drop the price of oil and begin flooding the market, begin an import tax equal to the drop. When they no longer benefit either economically or politically, they would stop squandering their resources just to hurt us. When world prices level out, reduce the tax. We are being played for fools and hurting our ability to be self-sufficient in energy production. We are the biggest customer, and also one of the biggest producers. We should be holding all or most of the cards these days. Technology has changed since 1979. I think we play to loose much of the time in the international arena. Of course, a lot of these foreign countries donate to the Clinton Foundation...just say'n.

  • hankel Butte, MT
    March 3, 2016 6:55 p.m.

    Can somebody please tell me why food prices are still so high? I realize that climate (drought, for instance) affects the price of oranges, etc., but the food industry always used the "high price of fuel" excuse. If the price of fuel is way down, then why do food prices keep rising? Information, please.

  • sherlock holmes Eastern, UT
    March 3, 2016 4:26 p.m.

    Air nut

    Your colors are showing. The oil counties have better, cleaner air than the Wasatch Front. Maybe you could do some good on the front. The rural counties will work on their air issues.

  • Mad Hatter Provo, UT
    March 3, 2016 4:17 p.m.

    Low oil prices help many other businesses in lowering costs for raw materials, transportation, and other industrial. Automobile sales go up. Food prices stay down. It's a mixed bag, but the consumer benefits.

    The petroleum industry has not enjoyed public favor since the industry operates almost as a monopoly. When oil prices increases, you see the result almost instantly at the gas pump. But when the price of oil falls, it takes a while for the prices to be reflected at the pump. It's because the industry wants every penny it can get by quickly raising prices and slowly lowering them.

    Now the consumer can enjoy lower prices for a while until the industry adjusts and the suppliers make changes to push the price up again.

  • FanOfTheSith Vernal, UT
    March 3, 2016 4:05 p.m.

    It goes up and down and you can only hope that those who wisely saved up for a rainy day during the up time can outlast the down time before the up time comes again. A lot of instant gratification and big spenders are always the ones who suffer the most during the down time.

  • Hutterite American Fork, UT
    March 3, 2016 3:28 p.m.

    Weren't high gas prices the problem at one time? Wasn't that what was holding the economy back? I like high oil prices. Can't wait until it hits two hundred bucks a barrel. To me, high oil helps more than high gasoline prices hurt.

  • airnaut Everett, 00
    March 3, 2016 3:21 p.m.

    @sherlock holmes
    Eastern, UT

    Airnut

    It is not even close. Solar projects and wind turbines require less than 10 workers to operate them once they come on line. Economic impacts from operations of these projects hardly move a needle. Their construction workforce is sizeable for 12 months or so, then the economic impact is gone.

    These projects are nice to have, but job growth is minimal.
    12:15 p.m. March 3, 2016

    ========

    Ya,
    I guess you might be right.

    Who needs all those Doctors and Nurses,
    Hospital Technicians, Pharmacists,
    and MORTICIANS when we have cleaner air and water?

  • Ernest T. Bass Bountiful, UT
    March 3, 2016 3:09 p.m.

    This downturn is even more proof that the State taking over land that never belonged to them won't even make money by giving it to the extraction industry, which is what will happen.

  • hermounts Pleasanton, CA
    March 3, 2016 3:08 p.m.

    A drop in the price of oil, or any commodity, is bad news for producers of that commodity, but good news for everybody else

  • Ernest T. Bass Bountiful, UT
    March 3, 2016 3:08 p.m.

    @65: precisely name how this is the Fed's fault. Sounds like you are admitting low gas prices is another one of the great things President Obama has given us.
    As for the cyclical nature of energy, it's just that, a cycle. Fortunately for all of us hard working Americans, gas prices are low right now.
    Why is it that those who claim to hate socialism think the government needs to do something about this? The great thing about being humans is we can adapt, move, learn, etc and do something else for a living.
    I don't believe I should have to pay so oil workers can buy their food. Let them go to school, pull themselves up by their bootstraps and do something else.

  • What in Tucket? Provo, UT
    March 3, 2016 2:31 p.m.

    Anyone working in the oil and gas industry must realized it is a world wide entity and sensitive to world wide economics. One working in this industry needs to have their year supply literally and perhaps other kinds of work.

  • Paul8777 Brigham City, UT
    March 3, 2016 1:29 p.m.

    What amazes me is that this boom and bust pattern repeats itself so predictably, and yet the communities involved and the political leaders at the State and local level never seem to see it coming. It has happened many times before and will happen again and again as long as we chase fossil fuels with volatile pricing and limited supply. I pray that no one finds oil or gas anywhere near my community.

  • peeannie west jordan, UT
    March 3, 2016 1:15 p.m.

    What this article fails to mention is that a LOT of the growth the Basin experienced was people moving into it from outside when the oil was booming - I have family in Roosevelt and I haven't been able to afford a hotel room there for the last 5 years. The oil workers have taken them all up and paying exorbitant rates to stay there so the hotel owners, hospitality workers have also benefited from the BOOM. A room in Roosevelt should cost $75 tops and they've been in the 200+ range because they can get it! Housing prices went through the roof because demand was so high. So the way I see it, if all those workers vacate the area taking with it the demand on infrastructure, schools, public programs, etc...it will normalize itself back to pre-boom life. People who have always lived there will have an easier time finding jobs as well. With any boom, there's always a bust. I wish them all well.

  • sherlock holmes Eastern, UT
    March 3, 2016 12:15 p.m.

    Airnut

    It is not even close. Solar projects and wind turbines require less than 10 workers to operate them once they come on line. Economic impacts from operations of these projects hardly move a needle. Their construction workforce is sizeable for 12 months or so, then the economic impact is gone.

    These projects are nice to have, but job growth is minimal.

  • yankees27 Heber, Utah
    March 3, 2016 11:50 a.m.

    EI, my thoughts exactly. Although sad for families that lived high on the hog while oil was high, we can finally get a breather and save a bit more, maybe take a road trip or two this year, so I think it's better for the working class to have oil lower. I fill my tank in my work van at least 3x week, so the savings for me have been awesome! It's hard to feel bad for the big oil companies who made BILLIONS in profits per quarter, and Execs were still making multi million dollar bonuses, while middle America felt the sting of high gas prices.

  • environmental idiot Sanpete, UT
    March 3, 2016 11:14 a.m.

    We must also remember what low prices at the pump are doing for other industry. My family can finally afford to travel a bit. We have more disposable income. And we can put more money aside for savings and retirement. There are two sides to every coin. Life is never perfect for everybody.

  • MGoodwin Murray/USA, UT
    March 3, 2016 9:49 a.m.

    Oil has always been a boom and bust, my Father worked for Halliburton back in the 80s and the exact same thing happened then, Saudis flooded the market with cheap oil and drove most of the domestic producers out of business. Though it does look like this time that the flooding is tapering off a little because this time the countries in the Middle East have expenses and can't afford to crush the prices too far, whether that glimmer of sanity holds firm is anyone's guess at this point.

    However it isn't just the oil companies that are going to suffer from the drop out, a lot of chemical engineers are unemployed or having their hours cut back as far as possible, especially in the industries that support oil and natural gas production. As well damage is going to start showing on green energy programs as the prices of oil and gas are dropping so fast they aren't going to be able to keep up.

    Natural resources are always in flux, the smartest thing to do in those industries is make sure you stock away funds for the famine times.

  • airnaut Everett, 00
    March 3, 2016 9:44 a.m.

    Funny -

    The "liberal" Salt Lake Tribune is reporting that although Oil jobs have decreased,
    the Wind & Solar Industries have MORE than made up for the difference,
    in fact -- there are now more Green Energy jobs and employees in the state of Utah than the whole Coal and Oil industries combined.

  • 65TossPowerTrap Salmon, ID
    March 3, 2016 9:23 a.m.

    I blame overreach by the tyrannical US Federal Government. Oh wait........

  • sherlock holmes Eastern, UT
    March 3, 2016 9:13 a.m.

    Dear Sir Robin from San Diego:

    Oil and natural gas is the best fuel going from a price and a portability standpoint. And there are filling stations all across the land where you can fill up your tank. And there is plenty of room in the energy arena for electric cars, mass transit, and bicycles. No need to talk down to the struggling oil companies (and countries). They will survive.

    In my travels, I am seeing SUVs all over the place. Don't understand your comment there.

    And I might point out that the overproduction of oil in the world is only about 1 to 1.5 million barrels per day. And production is decreasing even as we talk on this website, so enjoy the cheap gasoline while it lasts.

  • Me to you Vernal, UT
    March 3, 2016 9:03 a.m.

    This is a political game that the present leadership is playing and allowing foreign powers to do. More than half of United States oil comes from foreign countries that do not like us.
    Leadership is playing the game to push their agenda. That is what is really happening.

  • From Ted's Head Orem, UT
    March 3, 2016 8:59 a.m.

    Adapt or die. Low gas prices are better for our economy than high gas prices and it is a given that there will be winners and losers in every business setting. I'd love to see gas at less than a dollar a gallon!

  • Brave Sir Robin San Diego, CA
    March 3, 2016 8:55 a.m.

    The oil industry can cry me a river! They got themselves into this mess.

    Oil prices were relatively stable until 2005 when oil companies realized they could charge whatever they wanted for their product and consumers couldn't immediately do anything about it. Over the next 5 years, the price of oil increased 10x.

    But you see, people don't like it when the price of a staple commodity fluctuates by an order of magnitude for essentially no reason. So businesses figured out how to use less oil, SUVs went the way of the dodo (everywhere except Utah), and people drove less. CAFE standards went up. Hybrid and electric car sales went WAY up. And shale production became economical.

    Because of this, oil demand is actually decreasing while supply is increasing. So now you've got a whole glut of oil producers furiously pumping oil and nobody wants it.

    It was the greed of oil companies that forced consumers to find alternatives, and now we're supposed to feel bad that we don't want their product any more? Please.

    You made your own bed - enjoy sleeping in it.

  • Cleetorn Fuaamotu, Tonga
    March 3, 2016 8:25 a.m.

    There is a method in this madness. Not long ago, the oil industry in the whole nation was booming and companies were gearing up to make the shale oil come into it's own. Realizing this, foreign markets began to flood the world supply pushing the barrel price down for the sole purpose of driving the shale and other domestic oil people out of business. When the industry is effectively buried, supply will dry up and prices will skyrocket once more. This is a pattern that has been repeated more than a few times in the last few decades.

    And JBQ is right. There are (another) two sides to the coin. When prices are low, oil people struggle to survive while the general public exults at the pump. When they are high, the oil industry booms and consumers feel oppressed for gas policies that squeeze the life out of their pocketbooks.

    Unfortunately, in this business, you can't please all the people all the time. This is why we are urged to save in abundant times. To weather the lean times. Good advice and not just for religious people.

  • sherlock holmes Eastern, UT
    March 3, 2016 8:10 a.m.

    Note that neither the oil companies nor the oil workers are asking for a bailout. They know the free market giveth and taketh.

    Also note that significant tax credits are being granted to the wind power and solar power projects. Without the tax credits, the projects would not be built.

  • goosehuntr Tooele, UT
    March 3, 2016 7:50 a.m.

    I cannot imagine what is happening with these families. The heartache and lump in the throat feelings are so hard to deal with. So, forgive me for not understanding the Oil business, but is this the product of world dominators in the Oil industry purposely flooding the market with cheap fuel to undercut competition and assume total control?

    If anyone out there can help me understand what forces are at work I would appreciate it. Seems to me there is a world muscle being flexed. When gains are made, the muscle is flexed to make the smaller guys be uncertain about venturing again into oil production... Don't know... help me out.

  • Lolly Lehi, UT
    March 3, 2016 7:15 a.m.

    One of my friends in Vernal has always lived modestly since he and his wife were always waiting for the next downturn. Sadly, it has come again.

  • explosif Enoch, UT
    March 3, 2016 7:07 a.m.

    This same boom and bust economy is what State leaders are going to rely on for funding management of public lands if they successfully wrest control from the federal government. It won't just be store fronts that will have for sale signs, but large swaths of public land too when the State can no longer afford to manage them.

  • JBQ Saint Louis, MO
    March 3, 2016 6:50 a.m.

    There are always two sides to a coin. Oil revenue can be used for good or for ill. We need politicians who will be just stewards in the carrying out of their responsibilities. Instead, largesse from both sides of the aisle is being used to essentially influence how people will vote.

  • george of the jungle goshen, UT
    March 3, 2016 6:43 a.m.

    I can remember what happened before 1987, the late 70's early 80's, same thing , the same thing happened. Set em up and knock them down.

  • BJ61 South Jordan, UT
    March 3, 2016 12:16 a.m.

    Wait a second! Oil drilling and exploration are supposed to be the solution to rural Utah's economic woes. Contrary to popular opinion, however, the truth is that free market forces are causing these economic issues for small towns in Utah, not "overprotective" federal land managers.

  • itsjustme Vernal, UT
    March 2, 2016 11:41 p.m.

    Something that is not mentioned in this article is that we are seeing the schools in the area having a large reduction in students attending. If dad or mom cannot find a job, they will pack up and move somewhere that a job can be found. Then the school district loses State funding to pay for teachers and staff.

    And if you are looking to buy a home, the prices have not been as low in a long time. But you had best have a job, as there are few to be found.