A new report from a national industry group that says oil and gas development supports hundreds of thousands of jobs in Colorado comes amid strong discussions over the state and nation’s economic recovery and energy future.
report released on Tuesday American Petroleum Institute said oil and gas supported 69,000 direct jobs and 271,000 indirect jobs in Colorado in 2019, the latest data available. Nationally, the report found that the industry supported 2.5 million direct jobs and 8.8 million indirect jobs, 5.6% of total US jobs.
The report’s findings on the industry’s economic contribution are important as the country recovers from the pandemic and considers energy policies, said Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs.
However, an analyst at an institute that supports the diversified energy economy questioned whether some of the numbers in the report were inflated. The report lacks transparency, said Tom Sanzillo, director of financial analysis. Institute of Energy Economics and Financial Analysis.
“It is an industry that is big and powerful and provides a major contribution to the country’s economy. It doesn’t need to be dragged to make a point,” Sanzillo said.
But API said the report, prepared by PricewaterhouseCoopers, included oil and gas jobs across the industry, including pipeline operations and oil refining, in various sectors in some government data. Macchiarola said the report, which APIs releases annually, draws from data by the US Bureau of Economic Analysis at the Commerce Department and is supplemented by other data sources.
The BEA’s figures capture those who are self-employed in industry and individual involvement, Macciarola said, while the US Bureau of Labor Statistics only captures salaried workers.
Sanzillo said the report’s methodology is unclear, adding that the more than 800,000 workers cited in the report work at gas stations and convenience stores. “Many of these convenience stores now host charging stations for (electric vehicles). Are they also part of the solar and wind industry?”
Sanzillo said the facts of job numbers and the state of the industry matter because of the public debate over fossil fuel use. The trade group defended the contents of the report
“Service station workers are naturally included in these figures, as they represent a significant portion of the supply chain for liquid fuels and are by far the most visible part of our industry to the general public,” said Lynn Granger, Colorado-API’s executive director, said in an email.
According to the report, after factoring in wages, additional jobs backed by the industry and the “induced impact,” or personal spending by employees and business owners, oil and gas contributed $46.1 billion to Colorado’s GDP, or 11.7% in 2019 gave. The industry’s impact at the national level was about $1.7 trillion in GDP, or 7.9% of the total, the report said.
“The median salary in our industry is almost twice the average private sector salary in the US, so it’s not only the size of the job but the quality of the job that the industry supports,” Macchiarola said. “At a time when policymakers are considering a wide range of policies affecting the industry, it is important to take stock of what is at stake.”
Oil and gas demand is close to pre-pandemic levels, Macchiarola said, and experts expect the fuel to be used for decades to come.
At the state and federal levels, policymakers are addressing climate change by reducing greenhouse-gas emissions to which oil and gas contribute, and expanding the use of renewable energy. The $1.2 trillion bipartisan infrastructure bill in Congress includes billions of dollars to boost the number of electric vehicles on the roads and upgrade the electric grid to facilitate more renewable energy.
In Colorado, lawmakers have set targets for emissions reductions and recently passed several bills aimed at electrifying transportation and buildings in the state. State regulators have written new rules to reduce methane emissions from oil and gas sites as part of a 2019 law that overhauls the way the industry is regulated.
Any discussion of the effects of the oil and gas industry should include what continued use of fossil fuels means for the environment, said Paonia’s Pete Kolbenschlag, a consultant and longtime activist on climate change, energy and conservation.
“We can look at wildfires in Central Europe and the West to see whether the economic benefits that the oil and gas industry brings can now offset the costs being imposed by their carbon footprint,” said Kolbenschlag. Said in email.
“The federal government announced that it is reducing the Blue Mesa Reservoir – Colorado’s largest – by 8 feet to send more water to the rapidly disappearing Lake Powell. These are the effects of climate change today, already us Billions are coming in, and API has long known that its products are a major cause of this crisis,” Kolbenschlag said.
Macchiarola said API released climate action plan In March that supported federal funding to develop new technologies to cut carbon emissions and fast-track commercial systems to capture and store carbon and encourage innovation by companies. The organization supports placing a price on carbon and supports direct regulation of methane emissions from new and existing sources.
Granger of Colorado-API said industry is a key partner in tackling environmental concerns.
“Colorado has some of the most aggressive policies and emissions reduction targets in the nation. We have long recognized that we are part of the solution on all those fronts,” she said.