In "Vernal among fastest growing ‘micropolitan’ areas" (Tribune, March 14), banker and state Sen. Kevin Van Tassell, R-Vernal, said that Vernal’s growth is sustainable because oil and gas production could rise for decades. Unfortunately, the mere ability to produce oil does not make it sustainable.
What policymakers should fear is a drop in the price of oil and natural gas; in both cases, a real possibility.
In 2001, coffee prices collapsed; in the 1970s, it was copper; in the early 1980s, it was wheat and corn. In each case, nothing had changed to make production more difficult. But prices had fallen, and mines and farms that had been profitable at higher prices no longer were. Mines were shuttered and farmland repossessed at great personal and social cost.
Whether oil can be feasibly pumped out of the Uinta Basin in the future is irrelevant. How many wells will be operating when the price drops to $80 a barrel? $60 a barrel? How many businesses that serve oil workers will remain open when wells sit idle and workers leave?
An economy built around a volatile commodity is not sustainable, and it is becoming clear that Utah’s policymakers do not understand the risks.
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