IGNACIO, Colo. (AP) - Gas production in La Plata County is falling for the first time since the beginning of the coal-bed methane boom - a little-noticed fact that will carry long-term consequences for local residents and even the nation.

The evidence - hidden in mountains of government data - is unmistakable: Since July 2003, the amount of gas taken from the county has been slowly slipping, according to a Durango Herald analysis of state records. Despite 270 new wells drilled between 2003 and 2005, the average take per well is falling, and total production has fallen by 3.5 percent.

"I would hope nobody's surprised by this," said Christi Zeller with the La Plata Energy Council, a gas industry group, at the end of last week.

It might be years before the average resident notices the economic consequences. The gas industry pays a hefty share of the county's property taxes and accounts for hundreds of high-paying jobs. Meanwhile, landowners in the gas fields will see drilling increase, even though the best days of the field seem to be in the past.

And across the country, companies will have to look even harder to replace the bountiful production from La Plata County, one of the best places on the continent to drill for gas.

The news has been obvious to gas industry officials for a long time.

"It's a fundamental principle of natural resources that reserves eventually deplete," said Bob Zahradnik with the Southern Ute Growth Fund, which operates the county's second-largest gas company.

Zahradnik first warned Ute officials of the inevitable peak 17 years ago.

The decline is a fact of life for BP America, the area's leading driller.

"If we were to stop drilling today, the amount of gas coming out of La Plata County would quickly slide down," said Dan Larson, spokesman for BP, which produced 52 percent of all the gas in La Plata County in 2005.

But experts don't expect the industry to crash.

"There will be production here for another 40 or 50 years. It will just be a little less every year," Zahradnik said.

That's good news for the county budget, which gets more than 60 percent of its property tax revenue from gas companies. The companies pay taxes on both their gas production and the value of their equipment. Gas taxes helped keep La Plata's property tax mill levy the fifth lowest among Colorado's 64 counties, according to the state Department of Local Affairs.

If the industry disappeared overnight, property taxes would have to almost double, according to a study by Fort Lewis College economists.

The owner of a $400,000 house today pays $270 to the county in property taxes (plus more in taxes to school districts and other special districts). Using the Fort Lewis numbers, the county's annual tax bill on the same house would have to jump to $530 without the benefit of gas company taxes.

The same Fort Lewis study said the industry accounts for 4.2 percent of the county's jobs.

County Commissioner Wally White said he is "not at all" worried about the next few years. Tax revenues come in two years after the gas is sold, so next year's tax bill will reflect 2005's record-high gas prices.

"We're looking really good in the short term," said White, whose district includes the majority of the county's wells.

In the long term, however, La Plata needs a plan, White said. County employees have been trying to predict future gas revenues, and the commissioners have started a strategic planning process, White said.

County leaders have time to think, but White said that the drilling boom started 10 or 15 years ago, and it already seems to have hit the peak.

"It's going to be here for a number of years, but is that number of years 20, or is it 30 or 40 or 50?" White said.

County Assessor Craig Larson has noticed for the last few years that the top wells seem to be producing less gas. But he expects a long, slow decline because Americans will continue to need energy.

"I hope that's the case. Now if they come up with cold fusion, it might be a different story," Larson said.

But the consequences reach far beyond the county budget.

La Plata is Colorado's leading natural gas county. In fact, it produces an astounding 2 percent of all the gas used in the United States, according to state and federal data.

The southern half of the county sits atop the San Juan Basin, the nation's best gas field. Despite a flurry of drilling elsewhere in Colorado, gas from the basin has kept La Plata as the top-producing county in the state.

And closer to home, hundreds of county residents receive royalty checks from gas drillers. Private residents own much of the gas, and the producing companies cut them a check based on how much gas is recovered and sold.

"We've got people getting royalty checks here who might not realize that these will start to decline. So don't plan your budget on that," Zeller said.

In the short term, however, La Plata's decline probably will result in even more drilling.

John McGeeney lives in the heart of the latest drilling frenzy. In 2004, BP built a road and a drilling pad on the hill behind his home, northeast of Ignacio.

"We had a piece of virgin property before. Now we have this huge scar. People come in and out all the time, and we have no say over who comes and goes or when they come and go," McGeeney said.

It's a familiar complaint in these parts, and one that's likely to grow even louder as BP and other gas companies win state approval to drill one well every 80 acres, up from one every 160 acres in most areas of the gas basin.

"You're going to see more and more infill applications, and that doesn't bode well for our community, because you're going to have more and more impacts," said Josh Joswick, oil and gas coordinator for the San Juan Citizens Alliance and a county commissioner from 1992 to 2004. experience in Durango Real Estate

BP and other companies have pledged to limit their footprint in the 80-acre zone by slightly expanding current well pads and drilling diagonally, instead of bulldozing new pads.

The future could bring even more wells to some parts of the county.

"We've said we may need to look at 40s in some parts of the county. We don't know where yet," said Larson, the BP spokesman, referring to a potential request to drill one well every 40 acres.

But the new wells won't bring a surge in production.

"What we're doing with things like 80 acres is keeping the decline away," Larson said.

BP's goal is to keep its share of the county's production flat or slightly declining, he said.

The company usually drills about 50 wells a year here. At that rate, its 80-acre approvals should keep it busy for the better part of a decade.

"Outside of that, you really need a crystal ball," Larson said.

There were 270 wells drilled in La Plata County between 2003 and 2005, but the average take per well fell 10 percent, according to the Colorado Oil and Gas Conservation Commission. Total production also dropped, from the county's peak of 472 billion cubic feet of natural gas in 2003, to 456 billion cubic feet in 2005.

"It suggests to me that more than half, and perhaps as much as 60 percent of the gas that will be produced (in La Plata) in the span of time, has been produced," said Randy Udall, who runs an energy efficiency office in Aspen and sits on the board of the Association for the Study of Peak Oil-USA.

"It's not that the field has died - it's just showing its age. A golfing analogy would be that it's moved on to the senior tour," he said.

The best wells tend to be in a zone south of Durango called the Fairway. The gas moves so easily through the coal seams there, BP's Larson said, that his company might not ever need to seek permission for 80-acre spacing.

But state statistics show a dramatic decline in the county's 100 best wells, many of which lie in the Fairway. The total production of the county's top 100 wells fell 27 percent from 2002 to 2005, a rate of decline much higher than the county as a whole.

Still, $1.5 billion worth of gas was produced in La Plata County last year, the county assessor's office reported.

Between 1995 and 2004, the county budget took in $200 million in oil and gas taxes, DOLA reported.

Ninety percent of the gas produced in the county is coal-bed methane. The gas is found in thin strips of coal and was once thought to be worthless. But a 1980 federal tax credit jump-started coal-bed production, and high prices since 2000 have propelled a local boom.

Companies like to drill when gas prices are high, and they've been on a thrilling ride for most of this decade. After stagnating below $2 per million Btu for most of the 1990s, prices have tripled or quadrupled. Demand shot up when utilities built gas-burning power plants, which pollute less than coal plants.

Prices spiked at $15 per million Btu after Hurricane Katrina last fall. (A typical U.S. household uses just more than 100 million Btu a year, according to the federal Energy Information Administration.)

Natural gas futures prices were trading above $6 late last week. Federal Reserve Chairman Ben Bernanke predicts prices will settle around $9 this year.

Translation: Companies have every incentive to keep drilling, even though the field isn't as productive as it once was.

Technology also can keep the decline away. BP is experimenting with directional drilling that can do the work of three regular wells, Larson said. The company plans to invest $150 million in local gas projects in the next year, he said.

But prices and technology can do only so much, said Udall, the energy efficiency advocate.

"At this point, it doesn't matter how many wells they drill there - you're unlikely to recapture that peak production," he said.