FRACKING IN COLORADO

Concerning the opportunity to obtain rights to develop oil and gas wells in Colorado using
hydraulic fracturing. Long a center of oil and gas activity, citizens in Colorado have been
fighting hard for decades to guard against water and air pollution from drilling not to
mention destruction of the states famed scenic resources. In 2008, these citizens won a major
victory when the state government approved a suite of protections for Colorados public
health and environment some of the strongest in the country. According to state records, an
oil and gas-related spill ends up in ground or surface water every three and a half days. And
in 2011, Congress found that industry blasted 1.3 million gallons of diesel into wells in the
state going back on a promise not to do so.
Below is a map of some of the high profile incidents ("fraccidents") related to the country's
gas drilling boom that have already occurred in and around Colorado.



A preliminary list of factors determining the value of the opportunity described in the case
situation is given below:
1. Fracking would bring a new source of revenue that the county would use to build
infrastructure i.e. fund school programs and road repairs.


2. The availability of electricity generating resources will reduce the prices of energy in
the nearby areas.
3. Building of new industry would bring jobs for the people in nearby towns.
4. Hydraulic fracturing demands fresh water which seems to be difficult to approach in
such proximity of people.
5. The local and national environmentalists may protest against the approval of the
facility and the project may subject to pending decisions.
6. The availability of skilled workers in the nearby area might be a problem
7. The overall setup may take-up time and regulatory changes may occur
8. There is a greater risk of fracking accidents in the area so precautionary measures may
be carried out
9. The greater environmental concerns may require the facility to invest additionally on
air and water pollution control
10. The surface operations may receive protests from the citizens of Colorado
11. The oil and gas deposits are in a shale formation 8,000 below the surface and are
separated from any useable aquifers by nearly 5,000 of impermeable shale which is
good thing
12. The price of the leases is fair and a solid return on investment is expected
After having a thorough study of the value of the described opportunity, it has been
observed that although the opportunity is good one and investment can expect high
profitability. The equipments for carrying out the hydraulic fracking are easily available.
The cost associated with transportation of goods will be low as the area is well
surrounded by rail and road maps. The competition is not that high but secondary plans
must be kept in mind in order to respond to the reaction of competitors. The availability
of skilled workers might not be easy and therefore skilled workers may cause problem in
the project. The only big concern so far is the environmental factor and the behaviour of
the people from the surrounding area. The local and national environmentalists seem to
strongly disagree from this project. But once the negotiations regarding the nearby
community and environment have taken place, the overall project seems to be a great
opportunity of investment.