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High energy costs cut two ways in Colorado

President Bush won Colorado in 2000 and 2004, but Democrats hope to swing the state this year. Candidates will have to meet voter concerns about energy and the environment.
Image: Kimberly Jackson
Kimberly Jackson, a traveling nurse, says she has been turning down jobs because gas prices make the round trips too costly. A law student, she also worries that a dearth of good jobs will force her to leave her home state.John Makely /

While many Americans worry about high energy prices and the economic woes that go with them, Gary Terrell has the luxury of being able to take the long view.

Terrell has felt the pain at the pump, but the 55-year-old also has seen the upside of rising energy costs: The economy on the western slope of Colorado, where he lives, is benefiting from the rising prices because of its rich natural gas reserves. While much of the rest of the country suffers through a housing crisis, the local boom enabled him to profit handsomely on the recent sale of his home and position himself well for retirement.

But seeing the good and bad sides of high energy prices also has persuaded him that this country, more than anything, needs a plan to wean itself from foreign-produced oil.

In November's presidential election, the Colorado native said the candidates’ positions on economic issues — especially energy — will be key in determining how he votes.

"I want to vote for somebody that's going to try to put this country on its feet, with its own energy," he said. "Everything else will follow."

Energy concerns and the economy in general are on the minds of voters across the U.S. as the nation prepares to select its 44th president on Nov. 4. But as Colorado clearly demonstrates, voters’ views of the economy will be colored by diverse local circumstances when they head to the polls.

To get a sense of how economic issues will play out in some of the so-called battleground states that will decide the election, we asked readers in two such states – Colorado and Minnesota – to tell us how the economy is affecting them.

As Colorado prepares to host the Democratic National Convention this weekend, we examined the economic currents at work there and how they might factor into what is seen as a very tight race. (You can read about the economic factors buffeting Minnesotans next week, prior to the Republican convention.)

In Colorado, the run-up in energy prices is both a blessing and a curse: It’s a boon in rural western Colorado, but it's also squeezing residents facing rising gas prices and the prospect of hurtful heating bills this winter.

Further complicating the picture is the state's potential to become a hub for future energy production, whether through the clean energy companies now setting up shop there or new interest in the vast oil shale reserves nestled in the state's western side.

“Even though most of us feel the pain of higher gasoline and energy prices, Colorado’s one of those states that has a fairly significant energy industry,” said Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado.

That has the state's voters paying close attention to the energy and economic policies of Democrat Barack Obama and Republican John McCain.

So far, though, they appear to be having a tough time deciding which candidate would be best for the Centennial State. A Quinnipiac University poll, conducted with The Wall Street Journal and in July, found McCain holding a razor thin lead over Obama — 46 percent to 44 percent — among likely voters. The poll also found that 48 percent of Colorado residents said the economy was the most important issue influencing their vote.

“Economics is now the No. 1 issue when you say, ‘What do you think is the biggest issue facing Colorado, or the most important issue for the presidential candidates to deal with?’” said Floyd Ciruli, a nonpartisan state pollster who has done work for area economic development groups.

Both the GOP and the Democrats see the state as up for grabs. President Bush won Colorado in both the 2000 and 2004 elections, but Democrats have prevailed in more recent state and local contests.

While Republicans may benefit from the state's military presence and conservative Christian base, Democrats could get a boost from people like Gut Check America reader Burrall Sanders. The 54-year-old resident of Falcon, who owns a small business that manufactures custom aircraft, voted for Bush but has been badly disappointed by his policies on issues such as Iraq and the war on terror.

"I'm not exactly all excited about the Democrats, but they've got my vote this time," he said.

A tourist mecca
Colorado is perhaps best known as a tourist mecca, drawing the wealthy, famous and avidly outdoorsy to its awe-inspiring mountains. But the state also has a relatively diverse economy that includes technology, natural resources, mining and agriculture.

That's one reason that Wobbekind, of the University of Colorado, remains relatively optimistic about the state's economic outlook.

In addition to benefiting from higher natural gas prices, the state has moved to attract producers of clean energy such as wind and solar power, which Wobbekind thinks have the potential to generate more economic activity in the future.

Thanks in part to the Democratic convention, Wobbekind's annual forecast also is relatively bullish for the state’s tourism and hospitality industry. But high gas prices could crimp vacation plans and offset some of those gains, he said.

Also, while Colorado was among the first states to be hit by the housing crisis, recent signs have been more promising. Foreclosure filings fell by nearly 15 percent from the first to the second quarters this year, according to RealtyTrac, while nationwide foreclosure filings rose by nearly 14 percent.

“In the last few months, notably, the state has really been sort of going counter to the rest of the country,” said Rick Sharga, vice president at RealtyTrac.

He credits the state for aggressively tackling housing problems early on by enacting stricter standards for mortgage brokers and creating a toll-free hot line and other resources for those facing foreclosure.

But while the state itself seems to be weathering the national economic turmoil, many of its residents still say they are fighting to stay afloat.

Skyrocketing heating bills
Many of the Gut Check America readers in Colorado who responded to's appeal to share their stories mentioned job security and rising food prices as issues that were causing them sleepless nights. But by far the most common refrain was concern about energy prices, including the pain they are feeling at the pump and concerns over how they will be able to afford skyrocketing heating bills during the cold winter months.

Sanders, the airplane manufacturer, said he expects to be squeezed by high heating bills at his 5,000-square-foot shop this winter. He'll also be forced to pass increased shipping costs on to his customers.

"It's just making it tougher and more expensive for me," he said.

For some, rising prices mean little money for once-normal indulgences like a day trip to the mountains or a dinner out. Others are worried about more basic obligations, like buying groceries and paying the heating bill.

Kimberly Jackson, 35, of Denver, works as a traveling nurse, but lately she said she has been turning down jobs because gas prices are too high to make the trips worthwhile. The high cost of gas also has forced her to cut back on visits to friends and to ride her bike more often when running errands.

Jackson, who is undecided about who she will vote for in November, said the presidential candidates' energy policies will be an important factor. That's partly because Jackson also is a law student, and if the new president's policies focus on clean energy, she thinks that could help her land a job in her home state.

But otherwise she sees only a slim chance of landing a local job in her chosen field — public interest law — after graduating from the University of Denver with a dual degree in law and social work. Even if she does get a job in the state, she doesn’t think it will pay as well as her current nursing job. And she’ll be saddled with about $130,000 in student loan debt.

That has Jackson, an avid outdoorswoman, contemplating leaving her home state.

“I’m sure there are other places like this, but it’s almost a part of me,” she said. “But the economics (are such that) I’m almost certain that I will have to look elsewhere for work.”

‘It's not enough’
Tucker Hart Adams, an economist with The Adams Group who has followed the state’s ups and downs for decades, said Jackson and her fellow Coloradans are right to worry about whether the state will provide good jobs in the future. The state’s unemployment rate shot up to 5.2 percent in June, from 3.8 percent a year earlier. While that was still below the national rate of 5.7 percent, Adams said the figure tells only part of the story. She believes the state’s long-term job growth, especially in high-paying fields like technology, can’t support its growing population and high number of recent college graduates.

“It’s not enough to provide jobs, and full-time good jobs, for everybody,” she said.

Wobbekind also recently lowered his job growth forecast for the state from 1.9 percent to 1.5 percent for the year. He said early indicators are showing job losses in fields such as construction and manufacturing.

Many readers said getting — or keeping — a good job is a key economic concern.

Greg Thomason, who has an MBA and decades of experience in public relations and other fields, said he hasn’t been able to find a steady job since he was laid off in 2004.

Thomason, who lives in the Denver suburb of Arvada, gets by doing consulting work, but his savings have been depleted and he is uncertain about the future. He said he’s supporting Obama because he believes the Democrat will work to reverse economic policies that have driven up the national deficit and, he thinks, hurt the middle class. Still, he doesn’t expect change to come quickly.

“I don’t believe that any president is going to have that immediate an impact on the economy,” he said.

Support for offshore drilling
Over on the Western slope, in Grand Junction, Terrell is settling into a new home. While he doesn’t work in either the natural gas or tourism industries — the main drivers of the economy there — he has them to thank for the strength in local home prices and a stronger regional economy. He said that because he was able to sell his house for a good profit, he was able to pay off debts and position himself well for retirement.

Still, Terrell, an operations manager for the local newspaper, said he and his wife, who works in a grocery store, are worried about rising food prices. And they're thankful to have a fuel-efficient car, with gas prices hovering around the $4 a gallon mark.

When it comes to the election, Terrell likes Obama’s spark but said he is most concerned about backing a candidate who will reduce the nation’s dependence on foreign oil, in part by expanding U.S. drilling.

Ciruli, the pollster, said domestic drilling has become a key issue with Colorado voters since gas prices began surging. He believes it’s one of the few economic issues that have benefited the state’s Republicans, since McCain favors expanding offshore drilling. The Republican also has said he would encourage more nuclear power plant construction.

Obama also said recently that he would favor some offshore drilling, as part of a plan that also would encourage fuel-efficient vehicles and development of alternative energy sources. Ciruli said Obama's change of heart on offshore drilling should blunt the Republican advantage in Colorado somewhat.

Affordable fuel is key to a lifestyle Ciruli said many in Colorado don’t want to give up.

“We are a completely committed recreational state, and by and large we recreate with gas,” Ciruli said. “We load up the SUV and go to the mountains.”

Terrell also is among the Coloradans who believe the real promise for the United States — and his home state — lies in the vast reserves of oil shale nestled in the cliffs he can see from his window. He said his family used to burn the shale for fuel long ago and, as gas prices have risen, he has been hearing more talk of mining the shale and processing it to produce oil.

Adams, the economist, is skeptical that such an operation is feasible. She notes that there has been speculation about mining oil shale since at least 1917, and said there is still debate over whether the cost, logistics and resources needed would be worth the outcome.

“Certainly, there’s a huge amount of oil there, but it’s not easy to get out,” she said.