The upstream and midstream sectors of Colorado's oil and gas industry supported 89,000 jobs, accounted for $13.5 billion of the gross domestic product and created $1 billion of public revenue in 2017, according to researchers at the University of Colorado Denver Business School.
In a 30-page report commissioned by the industry-backed Colorado Oil & Gas Association (COGA), researchers estimated industry output from the upstream and midstream sectors at $19 billion in 2017, the most recent year with available statistics. Researchers also found that the 89,000 jobs supported by the industry -- 38,000 directly supported and 51,000 indirectly -- accounted for $10.8 billion in local employee income.
"This report demonstrates how a strong oil and natural gas sector benefits all Coloradans by ensuring that everyone has access to the great outdoors, good schools, and infrastructure to meet the needs of our growing population," said COGA CEO Dan Haley. "And in Colorado, where it is nearly impossible to raise taxes, a billion dollars from a single industry is a significant revenue stream that should be trumpeted."
The report comes at a critical time, as lawmakers in the Democratic-controlled General Assembly are seeking to advance Senate Bill (SB) 181, which calls for local governments to have a higher profile in the regulation of oil and gas activity. SB 181 passed the Senate on a 19-15 vote on March 13 and is expected to be approved in the state House and signed by Gov. Jared Polis.
Using data from the U.S. Bureau of Labor Statistics, researchers found that 874 firms employ 11,989 in oil and gas support activities in 2017, while 402 extraction firms employed 10,833 workers. An additional 99 firms with 3,936 workers were in the pipeline construction field, 86 firms with 1,799 workers handled drilling and 65 firms with 1,347 workers performed pipeline transportation work.
The report also found that nearly 90% of oil and gas permits approved by the Colorado Oil and Gas Conservation Commission for the 12-month period ending Feb. 2 were issued in Adams, Garfield and Weld counties. More than 80% of the approved permits were for wells targeting the Denver-Julesburg Basin, while 16% were for Piceance Basin wells.
Officials in Adams County, with an eye toward possible passage of SB 181, established a temporary moratorium on new drilling last week.
The report also pointed to a 75-87.5% tax assessment rate for oil and gas lands, compared to a 29% general assessment rate for corporate property. It also pointed to producers paying royalties and taxes on the value of production, in addition to taxes on earnings. The state also receives royalties for oil and gas production from state and federal lands and severance taxes on all production in Colorado.
"Various taxes and fees on oil and natural gas activity produce at least seven distinct streams of public revenue in Colorado," the researchers said. "We estimate the various public revenue streams amounted to over $990 million received by various state and local governmental organizations in Colorado in 2017."