  |
|
| ||||||||||||||||||||||
|
 | ||||
|
|
Analyzing Economic Impacts of Colorado’s Oil and Gas Industry Oil and gas industry contributed $23 billion to Colorado's economy in 2007 and employed 71,000 people. In 2005, Colorado’s legislature passed a bill to investigate and research the economics of the state’s energy industries. Lawmakers wanted to understand the oil and gas industry’s total economic contribution to Colorado in jobs, income, and gross state product. They also wanted to know how many jobs and earnings leaked out of state. Surprisingly, no one had ever tracked such in-depth economic information for the oil and gas industries. In response, the Colorado Energy Research Institute (CERI) at the Colorado School of Mines engaged Booz Allen Hamilton to conduct the first-ever, wide-ranging economic study of Colorado’s oil and gas industry. The results were startling. The Booz Allen study showed that Colorado’s oil and gas industry was a bigger economic engine for the state than the travel industry, accounting for 6.1 percent of state industry revenues, contributing $23 billion to Colorado’s economy, and employing 71,000 people. “Booz Allen gathered extensive, site-specific information, interviewing 80 industry representatives from across the state and customizing an off-the-shelf IMPLAN [impact analysis for planning] model,” says vice president Kurt Stevens. The Booz Allen team developed a number of models to estimate economic benefits generated from the primary activity (oil and gas development, extraction, taxes, and royalty payments), while multipliers in IMPLAN calculated the ripple effects, such as employee spending on housing and in local food and beverage stores, and oil-and-gas-supporting businesses and industries. Data including mineral royalty payments made to private Colorado households and businesses were also gathered, extrapolated, and input to IMPLAN. The Booz Allen team then developed the final report, including estimates of revenues that leaked out of the region.
“We’re totally dependent on natural resources for everything that we do,” says CERI director Dag Nummedal. “This report is the first one that pioneered a pathway to quantify the impact of one of the natural resource industries.” The state’s regulatory agency, the Colorado Oil and Gas Conversation Commission, has recently proposed new rules that will likely restrict drilling in the state. “The industry asked Booz Allen to estimate how the new regulations could impact jobs, gross state and regional product, and labor income—we can do that with this model,” says associate Holly Bender. The customized economic model has other wide-ranging uses, such as determining what types of industries should be encouraged to relocate to Colorado. Mr. Nummedal notes that the results indicate that Colorado’s economy “will be tied to natural resources for a very, very long time.” story posted September 2, 2008
|
|
Home | About Booz Allen | Consulting | Consulting Services | Ideas & Insights | Contracts | News & Media | Careers Copyright 2009 Booz Allen Hamilton Inc. | All Rights Reserved | Legal Notice & Privacy Policy | Site Map | Contact Us
|