Colo. oil, gas generating $1B in state, local taxes
Colorado’s oil and gas industry and its employees pay almost $1 billion in state and local taxes, according to a new report released Friday — a significant chunk of change as the General Assembly contemplates new regulations on the industry.
The Colorado Oil and Gas Association report, compiled by an economist from the University of Colorado Denver, says the state’s oil and gas sector employed about 30,000 people in 2017, created about 51,000 additional jobs, added about $13.5 billion to Colorado’s domestic product and provided 81 percent of the distributions doled out through the School Trust.
“In Colorado, where it is nearly impossible to raise taxes, a billion dollars from a single industry is a significant revenue stream that should not be taken for granted,” COGA president Dan Haley said.
That’s the billion-dollar concern for lawmakers at Colorado’s Capitol as they continue to move forward with a bill that would, among other things, give local governments more control over drilling. Oil and gas companies and their supporters say Senate Bill 181 would cripple production and lead to drilling bans like the temporary one enacted this week in Adams County.
If Adams County were to consider making its sixmonth moratorium permanent, one of the county’s Democratic state senators, Dominick Moreno, told The Denver Post he would go to the meeting himself to testify in opposition. He said the proposed regulations could have some impact on the industry, but “I would bet the sky is not falling.”
The bill’s sponsors say they have heard doom-andgloom predictions before.
“Oil and gas’ job is to push and promote fear on this,” House Speaker KC Becker, D-Boulder, said during a meeting with reporters earlier this month. “It’s going to work out. It’s going to be fine.”
She pointed to a mailer she has from 2008 when the industry predicted new rules would put 71,000 jobs at risk and shut down production for three months.
“None of that happened. In fact, oil and gas took off like crazy right after these rules,” Becker told reporters. “Now they are back on TV and in the press saying this is going to cripple Colorado’s economy. It didn’t happen last time. Why should people believe it this time?”
Total oil production in the state grew by more than 400 percent in the 10 years following 2008, according to COGA’s own report. For context, the industry grew by about 50 percent in the decade beginning 1999.
A lot of oil and gas’ growth in Colorado in the last decade came from the advent of shale oil and was localized in Weld County. Ninety percent of drilling permits issued in the past 12 months were in Weld, Garfield and Adams counties, according to COGA’s report. Weld also contained the largest number of workers directly employed by oil and gas, but Denver accounted for the largest number of workers in the broader supply chain.
In northwest Colorado the number of wells is lower, but the financial impacts of oil and gas are just as significant, said Sen. Bob Rankin, R-Carbondale. Several school districts in his area, such as Rifle and Parachute, rely almost entirely on oil and gas taxes.
Rankin said SB 181 would drop production in northwest Colorado by as much as 50 percent, in his opinion, because the Piceance Basin is mostly gas wells that don’t have nearly the same profit margins as oil wells on the Front Range.