A recent study, released by the Common Sense Policy Roundtable (CSPR) and the REMI partnership, shows the economic impact of a proposed Colorado initiative that would increase setbacks of oil and natural gas development to five times its current distance. The study found that the estimated dollar amount of lost oil and natural gas production due to Initiative 97 would range from $110 billion to $141 billion by 2030. The study shows a $258 million loss in state and local tax revenue during the first year alone. By 2030, more than $1 billion in tax revenue would be eliminated, along with as many as 121,700 jobs.
“The numbers cited in this study are stunning. The oil and gas industry is a significant economic driver in this state, and the study shows that this initiative will devastate Colorado’s economy and lead to tens of thousands of job losses,” said Kathie Barstnar, executive director of the Colorado chapter of commercial real estate development association NAIOP.
The CSPR study reinforces a recent analysis conducted by the Colorado Oil and Gas Conservation Commission showing that the setback measure would put 85 percent of the state off limits to new oil and natural gas development. It would also eliminate new development in 94 percent of non-federal land in the state’s top five producing oil and natural gas counties (Weld, Garfield, La Plata, Rio Blanco and Las Animas).
Colorado’s oil and gas industry supports hundreds of thousands of jobs across multiple industries and sectors. In addition, the industry operates within some of the nation’s strictest regulations regarding safety, water monitoring, and air, according to CSPR’s analysis. In fact, Colorado has had 14 rulemaking processes regarding oil and natural gas development in the past nine years.
Communities across the state receive about $1 billion dollars annually in revenues that are critical to state and local governments, schools and special districts. Oil and natural gas contributed $839 million to K-12 schools in 2015 and 2016, and over the past eight years, the industry sent $615 million in severance tax to municipalities and counties for everything from new parks and recreational centers to funding public safety of local police and fire departments and road improvements.
“I know first-hand how Colorado counties and local communities depend on oil and gas tax revenue for critical services for their residents,” said former Adams County Commissioner and Colorado State Representative Guillermo DeHerrera. “Cuts or elimination of those services will pose a significant hardship to those communities.”
Read the study here: commonsensepolicyroundtable.org/oil-gas-setback-study