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Economics and Taxes



MythBusters:  Federal Exemptions

January 25, 2013

Across the U.S., each state has regulatory authority over oil and gas operations. Colorado has some of the most comprehensive and stringent oil and gas regulations in the country: Every aspect of oil and gas activity is regulated from site selection, permitting, down-hole activities, hydraulic fracturing and disclosure, and final site reclamation.

States are the most appropriate place to regulate oil and gas activity because state regulators understand the unique geological characteristics of the basins in their states. Even so, the federal government…Read More


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Our American landscapes and environmental resources are national treasures. We in Colorado know that as well as anyone in the country. Also here in Colorado, we have abundant resources of clean burning natural gas, making us a part of the shale gas revolution. This revolution is an opportunity for all of us to reduce pollution, reduce our carbon footprint, reduce our dependence on foreign oil, increase jobs, and ensure long-term reliable and affordable energy.

The health of the oil and natural gas industry is of key importance to the State of Colorado. Colorado ranks fifth in the country in U.S. natural gas production and 9th in oil production. The industry supports over 111,000 Colorado jobs and provides $21 billion to the state’s economy. In addition to providing jobs that support communities across the state, Colorado receives a significant portion of its state revenues from oil and gas development, with over 95% of the severance taxes paid for by the industry. The oil and natural gas industry is a key component to rural values, lifestyles and economies and help keep those areas growing and thriving. It is critically important that Colorado has a welcoming environment for energy investment.


Economic Benefits

In the U.S., the oil and natural gas industry supports 98 million American jobs, which is 5.6 percent of the total employment in the country. The associated labor income is estimated to be $598 billion, or 6.3 percent of the national labor income total. The industry’s total value added contribution to the national economy was over $1.2 trillion, accounting for 8 percent of U.S. gross domestic product in 2011.1 Statistics are similar here in Colorado where our industry is a significant employer and contributor to state and local revenues.

KEY POINTS
  • The OIL & GAS industry in Colorado directly employs over 50,000 people and supports over 111,000 jobs in the state and provides $3.8 billion in total labor income and $29 billion in economic output annually. 1

  • In 2012 the industry contributed over $1.6 billion in public revenues. Almost $500 million went to education.
     
  • Only the cities of Denver, Colorado Springs, and Boulder have more jobs than the State’s oil and natural gas industry.2

  • In Colorado, more than 75 percent of residential homes use natural gas as their primary energy source for home heating, one of the highest shares in the nation.3

  • Colorado had more than 50,000 oil & gas wells in production.4

  • Ten of the Nation’s 100 largest natural gas fields and three of its 100 largest oil fields are found in Colorado.3

  • Colorado has more than 50,000 oil & gas wells in production. 4

  • Ten of the Nation’s 100 largest natural gas fields and three of its 100 largest oil fields are found in Colorado. 3

  • Colorado produces 1/4 of all coalbed methane in the U.S.3

  • Severance tax is levied on extraction of metals, coal, oil and gas and is part of TABOR revenue base. Oil and gas pay over 90% of the state’s severance tax.5

Information Sources:
1 "Assessment Of Oil And Gas Industry Economic And Fiscal Impacts In Colorado In 2012” Business Research Division, CU Boulder – August 2013
2  Economy at a glance - The Bureau of Labor Statistics http://www.bls.gov/eag/eag.co.htm 
3 EIA, Colorado Energy Profile, last updated 12/31/2009 http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=CO 1/2/2010 
4 Colorado Oil & Gas Conservation Commission (COGCC)
5 Department of Local Affairs, https://dola.colorado.gov/sdd/sdd_tier1.jsf
6 Department of Local Affairs - Colorado Assessed Values Manual 1995-2012
     
     
   
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