The price of natural gas continues to slump in the Rockies, and that's bad news for Colorado.

The total value of gas produced in the state is estimated at $7 billion in 2007, down 9 percent from $7.7 billion in 2006, according to data released Tuesday by the Colorado Geological Survey.

Although the value of gas in 2008 is uncertain, given wild price swings, experts say 2009 will be much worse.

"I wouldn't be surprised if we see a slowdown," said Vincent Matthews, director of Colorado Geological Survey.

That means less money for Colorado schools and government services because state and local governments get a share of the taxes and royalties from mineral production.

This is a far cry from 2005, when the value of production was pegged at a record $8.1 billion and Colorado was awash in energy dollars.

"I just can't see how we can possibly have more gas production in 2009, simply because we are anticipating a decrease in drilling throughout the state in 2009," said John Harpole, president of Mercator Energy. "We are anticipating a 40 percent decline in rig count in the Piceance Basin alone."

"We also are anticipating lower price of gas in 2009. This does not bode well for the state budget," he added.

Colorado produced 1.362 trillion cubic feet of gas in 2007, about 9 percent higher than in 2006. This year, it's on track to produce 10 percent more than in 2007. But the falling price of gas could mean a far lower value for the production.

Since spiking in the summer, the price of natural gas in the Rockies has dropped rapidly. Last Thursday, the price in the Rockies was about $3 per million British thermal units, compared with $7 at Louisiana's Henry Hub, which sets the price for most of the nation.

"I think that companies are going to take a look at this and say, 'We can't continue doing this,' " Matthews said, explaining why companies might divert their investment away from the Rockies to other producing areas.

chakrabartyg@RockyMountainNews.com or 303-954-2976