Wednesday, September 19, 2012

Real Estate Boom in Vernal Utah - What You Need to Know Before It's Too Late

How the domestic oil industry is changing city of Vernal?

Vernal, a city located in Uintah County of Utah in the United States has been a small average city with a handful of residents. But its fate changed with the boom of domestic oil industry in the United States. It is supposed that there is more oil deposited under the soil of the Vernal area than in the Middle East.

The United States has more than 2 trillion barrels of oil in its deposits and if brought to use then it could eliminate the dependence on oil from the Middle East, Africa and South America for hydrocarbon. The research has found that more than 70 percent of US oil reserves are in Green River Formation in Utah, Colorado and Wyoming. The Uintah County is also a part of Green River Formation so if oil production in the Green River Formation starts on large scale then the city of Vernal will grow at an immense rate. Some residents in the city have already experience the boom in the real estate industry and other major areas.

The recent data shows that the real estate prices for an average home in Vernal city was near $100,000 but now has increased to above $185,000. Moreover, the basic land price which was about $40,000 an acre has jumped up to the $70,000 range. This shows how the oil industry in Vernal is changing the economic structure of the city.

Unfortunately, it is not that easy to extract oil from the oil depositary of Vernal Utah area as the land is full of shale rock and extracting oil form these rocks can cost more than the average sale price. The average oil plumping cost in Middle East is averaged on $5 per barrel whereas in the Vernal Utah, it can reach up to $25 per barrel increasing the price for end user. But if, the price for oil is going to exceed in the way it is doing recently, then there will be time when the rigs in Vernal Utah might be economically feasible.

Big oil companies including Shell, Exxon and Chevron - Texaco have speculated the amount of oil deposit in this area and have started to invest heavily. Though the exploration of oil in and around Vernal and Utah State was done early 19th century but its commercial production stated only after 1925 when three companies namely Utah-Southern Oil Company, the Midwest Enterprises Company, and John Howard's Utah Oil Refining Company started digging oil in Utah. Vernal, Utah had its first oil boom only in 1948.

The booming oil industry has helped Vernal become popular hotspot for people looking to invest and live in this area. As the oil prices all over world increases, the new domestic oil industry in Vernal, Utah is going to change the perspective of people who highly depend on Middle east and other politically troubled countries for supplying oil to United States. Thanks to the oil boom Vernal city has been able to capitalize on its growth and welfare for its people.


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