Last year, Colorado's oil and natural gas industry injected $29.6 billion into the state's economy, supporting 110,000 mostly high-paying jobs, according to a study released Monday by a research unit at the Leeds Business School, University of Colorado (UC), Boulder.
The oil/gas industry directly contributed $1.6 billion in the form of various tax revenues paid in 2012, according the study, "Assessment of Oil and Gas Industry 2012: Industry, Economy and Fiscal Contributions in Colorado." Such a study is commissioned every two years by the Colorado Oil and Gas Association (COGA).
Direct employment totaled more than 51,200 jobs with average wages of more than $74,800, or 49% higher than the state average for all industries, said report authors Brian Lewandowski and Richard Wobbekind. "Collectively, this industry contributed nearly $3.8 billion in employee income to Colorado households in 2012, or 2.8% of the total Colorado salary/wages."
From 2010 through 2012, employment due to the oil/gas sector increased 17%, adding more than 7,600 jobs, the report said.
While there has been a steady decline in drilling permits issued in recent years, production growth has continued unabated, according to the study. From 2010 through 2012, permits issued dropped by 37% (5,996 to a little more than 3,700 most recently), but over the same period production went from 32 million bbl to 48 million bbl of oil in 2012, and 1.62 Tcf to 1.65 Tcf of natural gas.
The industry is producing more with a smaller overall footprint, mostly due to technological advances, according to Doug Flanders, COGA policy/external affairs director.
While most of Colorado's production is sold outside the state, it contributes much wealth to owners, employees, government and schools, all of which the UC report called beneficiaries of oil/gas revenues. "In 2012, Colorado's oil/gas industry recorded $9.3 billion in production value, accounting for some 29,300 direct drilling, extraction and support jobs with average annual wages exceeding $101,000," the report said.
Lewandowski said the oil/gas sector has grown "substantially" in Colorado during the past five years, providing a good source of high-paying jobs for recent UC graduates. "It also has helped support many related industries coming out of the recession."
With local government increasingly opposing hydraulic fracturing or other aspects of the oil/gas boom, COGA was glad to see the report and its findings. The industry's overall tax bill, which is equivalent to $817 per Colorado household, was one data point highlighted by COGA.
"Governments across Colorado depend on the oil/gas industry to pay for much-needed public services," Flanders said. "Without revenue from the oil/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."