There’s a recent study out of University of Colorado Boulder.
The report, commissioned by the American Petroleum Institute, looked at the financial impact that oil and gas development is having in Colorado. It looked closely at where the money goes and how the money gets spent. Some of the figures are pretty amazing.
"We found that in 2012 alone, there were just shy of 32,000 direct industry workers," says Brian Lewandowski, a research associate with the University's Leeds School of Business, "and those workers earned about $3.2 billion in wages."
That averages out to around $100,000 per year.
"That puts the average wages more than twice of all the industries in Colorado," he says.
Joe says what really stood out in this study, is how places with no actual development, like metro Denver, are seeing a huge economic boost just from all the office jobs related to oil and gas. He says office jobs account for about 40 percent of all the oil and gas jobs.
"Executives, finance departments, accountants, engineers: those jobs are in the Denver metro area," says Brian.
Not everything is Denver and Front Range. The two main counties for oil and gas wells are Weld County and Garfield County. In 2012 Garfield County added over $38 million to its general fund from oil and gas, almost 40% of its revenue. With severance tax and money made from leases, it pushes that number to over $44 million. Other places the study looked at aren’t even close, like Pueblo County, who’s seen a grand total of $53,000.
Mesa County shares the same shale basin as Garfield, and they’ve seen some money too. They received a total of over 10 million dollars in 2012. That basin continues south and east, but development really doesn’t reach beyond the north edge of the county. Relatively speaking, there’s no development on the western slope aside from that cluster in Garfield and Mesa County, and a few spots in San Miguel. Joe has an idea why.
"I think it primarily has to do with the concentration of resources within that basin," says Brian.
He says that right now, the way the shale is on most of the western slope, it’s just not as economically viable. The oil and gas deep in the earth isn’t as clustered, making it more expensive to develop. That may change, though, if the price of the oil and gas changes.
"I've talked with people who describe it in two ways," says Brian. "One way would be if prices do come back strongly, that would drive a lot more new production on the Western Slope. But another individual told me that the wells are already spaced so close together in the prime areas on the Western Slope, that even if the price comes back, there won't be a whole lot of additional drilling because it would reduce the pressure in the wells that already exist out there. I don't actually know the answer, but I ask that question when I'm talking to people in the industry, and I've heard a couple of different answers."
The market price may bring development to the rest of the Western Slope, or things might just stay the way they are.
The 80 page study can be found here, with data for several areas across the state. For a county by county breakdown, scroll to the bottom of the study.
