Report assesses energy boom’s impacts
November 28, 2007
DENVER ” The energy industry isn’t affecting the Colorado economy as much as the boom in the 1980s did, and state leaders should consider managing its growth to make sure it doesn’t crowd out other employers, a research group said Wednesday.
The study by Headwaters Economics found that the oil and gas and coal industries and the services that directly support them accounted for 2 percent of the income earned by Coloradans in 2005.
In contrast, 47 percent of the income came from the service industry ” everything from jobs in law firms to resorts ” and 29 percent from savings and government payments, mostly collected by retirees.
“This energy boom is not as important as the last,” associate director Ben Alexander said after a presentation of the study to reporters and a representative of the state Department of Natural Resources.
The Colorado Oil and Gas Association didn’t immediately have a comment on the report.
Alexander said his Bozeman, Mont.-based group makes about half of its money by providing information to the U.S. Bureau of Land Management and Forest Service.
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Funding for the study, which also looked at Utah, Wyoming, New Mexico and Montana, also came from progressive and conservation foundations, Alexander said.
Coloradans who work in the energy sector are doing well, making an average of $83,213 in 2005, the study said. That’s about $20,000 more than federal government jobs, usually the second-highest paying jobs in western Colorado counties experiencing the boom.
Alexander said there’s no evidence that the oil and gas boom is preventing retirees or others from moving to energy boom counties, but he said that could happen if energy development harms the environment or drives up housing costs.
A boom in new, high-paying energy jobs in small counties is driving up overall wages and making it harder for other businesses to hire workers, the study said.
Alexander said lawmakers should consider whether energy development should be slowed down so it doesn’t harm other industries or force energy companies to go out of state to find workers.
The findings on personal income echo some of the findings of a report by the Wildnerness Society this fall. It found that the industries related to the outdoors ” recreation, tourism and an influx of retirees ” were more important to Colorado’s economy than energy. Ben Davis, a spokesman for Headwaters Economics, said the two reports were not related.
Earlier this year, a state-funded survey found that Colorado’s oil and gas industry contributed nearly $23 billion in direct and indirect economic benefits to the state in 2005.