Report: Oil, gas a $22.9 billion boost
The Associated Press
Aspen, CO Colorado
DENVER ” The booming Colorado oil and gas industry contributed nearly $23 billion in direct and indirect economic benefits to the state in 2005, a state-funded study found.
The industry generated $22.9 billion for the economy, or 6.1 percent of the total gross state product, according to the report by the Colorado Energy Research Institute released Thursday.
The institute, created by the Legislature in 2004, found the industry paid $870.5 million in business, personal, state and local taxes. The industry generated about 70,000 jobs ” direct and indirect ” accounting for 2.2 percent of the employment in the state and 3.2 percent of total earnings in 2005.
“Oil and gas activities contribute to the economic well-being of many other industries within the State of Colorado as well,” the report said.
The report found that oil and gas development spun off jobs in government, professional services, retail and health and social services.
Colorado is well-positioned for further growth, said Dag Nummedal, director of the energy institute, as energy companies explore and expand production of such unconventional resources as gas from tight sands, older oil and gas fields and oil shale.
Of the state’s five major oil and gas basins, southwestern Colorado’s San Juan and Paradox basins produced the biggest economic punch ” $3.9 billion. Northwestern Colorado’s Piceance Basin was next with $3.4 billion.
The study was designed and produced by the energy institute, Colorado School of Mines and consultants Booz Allen Hamilton.
It was intended to explore the industry’s economic and fiscal contributions and a to develop model to estimate the benefits annually.
Some conservationists and a state lawmaker said future studies should include the costs of development ” including public spending, environmental problems and social disruptions ” to calculate the overall impact of the industry.
Pete Morton, an economist with the Denver-based regional office of The Wilderness Society, called this year’s report “a good first step” but said a follow-up should identify such the cost of public services, new roads and other infrastructure.
He said the next report should also consider loss of investment income when retirees leave an area because of development and any drop in tourism and recreation revenue.
Conservation and outdoors groups have campaigned for development guidelines to protect wildlife and public lands used by hunters, anglers and others.
Rep. Kathleen Curry, D-Gunnison, who represents Aspen and the Roaring Fork Valley, said a follow-up needs to consider development’s environmental and health impacts and loss of use of agricultural land to drilling and production facilities.
Curry sponsored a bill passed by the Legislature this year requiring more input from state health officials on oil and gas development.
“I have a degree in resource economics, and you don’t look at just the benefits,” Curry said. “The costs are harder to quantify for sure.”
Nummedal acknowledged the study didn’t include costs. “It was a very big study on its own,” he said.
He agreed that questions about impacts would be good fodder for another study.
Curry and other members of a legislative interim committee studying taxes on oil and gas production heard Thursday that the state could reap $1 billion in bonuses and royalties over two years from new energy leases on federal land on the Roan Plateau in western Colorado.
The Bureau of Land Management has given final approval to a 20-year management plan authorizing up to 1,570 new natural gas wells on top and around the plateau just west of Rifle.
Curry said the figures were based on estimates by the energy industry.
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