Posted August 20, 2013
PwC’s recent study showing the oil and natural gas industry supported 9.8 million jobs in 2011 – adding 600,000 jobs in just two years – offers a look at the national economic impact of our industry. A new University of Colorado study shows industry’s contributions in a key energy state. Main findings:
Industry activity added $29.6 billion into Colorado’s economy in 2012.
Oil and natural gas supported 110,000 high-paying jobs, including direct employment of more than 51,200.
Wages for direct industry jobs averaged more than $74,800 – 49 percent higher than the state average for all industries.
This is a snapshot of the boost the oil and natural gas industry is providing a state economy – 17 percent growth in employment from 2010 to 2012. Brian Lewandowski of CU’s Leeds School of Business, which authored the report:
“The oil and gas industry has grown substantially in Colorado over the past five years, offering Colorado graduates the opportunity at high wage jobs directly in the industry. It also helped support many related industries coming out of the recession. The oil and natural gas industry thus plays a pivotal role not only in bringing substantial economic benefits to Colorado companies and households, but also provides significant fiscal benefits for local governments and the state as a whole.”
Benefits to the state included:
$163 million in severance tax revenue, an increase of 158 percent over 2010.
$600 million in property taxes – accounting for nearly 9 percent of all property taxes paid in the state.
$1.6 billion in revenues to state and local governments, school districts and special districts.
Doug Flanders of the Colorado Oil and Gas Association:
“Without revenue from the oil and gas industry, we would not be able to provide the necessary funding or would have to further raise taxes for public schools, roads, parks and many other government services that Coloradans depend on.”
The study found that oil and natural gas production is becoming more efficient. Despite a 37 percent drop in approved drilling permits, oil and natural gas output increased. Charts showing the state's oil and natural gas output and their value, 2006-2012:
It’s hard to overstate the importance of the CU study in the context of a state that is engaged in an intense debate over energy development. Flanders:
“… the economic contributions of the industry should be present in the discussions calling for drilling moratoriums, understanding that in Colorado, the industry impacts thousands of jobs and billions in wages, funds state and local government – including schools – and makes purchases from every industry.”
The focus of these discussions – in Colorado and anywhere else oil and natural gas development is occurring or contemplated – should be safe and responsible production that earns the confidence and support of local communities, to the benefit of all.
This indeed is happening, according to a new study on the role of oil and natural gas and amenities in county economic development. The study by Liberty Source analyzed 16 U.S. counties that have various levels of energy development and found that the oil and natural gas industry provides valuable economic diversity in communities that rely on seasonal hospitality and recreation employment. Specific findings include:
Energy extraction can directly advance the development of amenities.
A county’s economic well-being depends on having both high-paying jobs provided by energy development and a large number of jobs generated by hospitality and recreation.
Kyle Isakower, API vice president for regulatory and economic policy:
“This study shows that oil and natural gas development can stimulate economic growth in areas that also support outdoor recreation. Counties with an active oil and gas sector create jobs alongside employment in skiing, hunting, fishing and hiking. … Each county is unique, but where oil and natural gas development is an option, it yields tremendous economic growth and is compatible with recreational activity. Oil and gas revenues also provide needed funds for education, trail maintenance, and other local priorities.”
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.