Will there be a repeat of the 1980s crash?

I remember all too well the early 1980s, when oil prices dropped severely. I was owner of a store in Durango, Colorado called The Greenery. We had just expanded into a 12,600 square foot store and started two satellite stores in downtown Durango. Then, the oil bust came, and Durango lost its usual visitors from Denver, Texas, and Oklahoma. From that point on it was a struggle to pay the rent each month.

In a column in the Denver Post today Jonathan Thompson recalls that bust/boom cycle in the oil and gas business and its effects on Colorado. Once again, in 2014,

One estimate has 30 percent of Denver's downtown office space occupied by oil and gas industry workers.

Over the last couple of decades, Denver has transformed itself into a greener, transit-oriented city, and a trendy magnet for millennials. Fossil fuels have helped drive the metamorphosis. According to statistics by the Bureau of Economic Analysis, Denver now has one of the healthiest gross domestic products in the nation. The metro area's GDP grew by 4 percent in 2013, about half of which is attributed to extractive industries. Close to 30,000 people are directly employed by the fossil fuel industry in northern Colorado, either in Denver offices or the oil fields of Weld County, which yielded some $4.5 billion worth of crude last year. Greeley, a cow-town north of Denver with a massive meatpacking plant, saw its GDP jump by a whopping 10 percent, and it has nothing to do with cattle.

A repeat of the 80s crash is unlikely — the preceding boom was driven less by scarcity than by geopolitics, first, and then federal price controls and massive subsidies, which were discontinued by the Reagan administration. This boom is driven by drilling technology and the rising price of oil, which is fueled by burgeoning demand from China, India and developing countries. That's not likely to go away entirely, but every boom busts someday, and when it does, Colorado may regret throwing away all those would-be severance tax revenues.

But when that day comes, Denver will be far better prepared to deal with it. Despite energy's outsized role, the economy is far more diversified than in the early '80s — finance, high tech and so-called cleantech, which includes wind and solar companies, are also big sectors. Plus, public funds have been invested wisely in infrastructure, transportation and in making the city a desirable place for companies — including oil companies — to relocate, with or without high taxes.

Read more here.