COGA report: Oil, gas generates $1B in tax revenue

DENVER — Colorado’s oil and gas industry was directly or indirectly responsible for 89,000 jobs, $13.5 billion of the state’s gross domestic product, and $1 billion of state and local tax revenue in 2017, according to a recent report from the Colorado Oil and Gas Association.

The report, paid for by COGA and conducted by Global Energy Management Program at the University of Colorado Denver, was released amid efforts by oil and gas operators to highlight the contributions of the industry.

Colorado lawmakers are in the process of debating SB19-181, a bill that would overhaul the way oil and gas are regulated in the state. The industry has come out in opposition to the measure.

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“Colorado enjoys substantial economic benefits as the result of natural resource development in the state, including drilling, extraction, and all the support activities that go along with it. However, the industry’s contributions within our communities are more than numbers on a page. This report demonstrates how a strong oil and gas sector is a net positive, not only because of the jobs and economic impacts it provides, but also because public revenue generated from oil and natural gas activity play a vital role in ensuring that everyone in the state has access to good schools, infrastructure to meet a growing population and the great outdoors that makes Colorado exceptional,” the report said.

The industry is responsible for seven distinct tax revenue streams, according to the report. “And unlike other industries, the assessment rate on oil and gas lands value is 75 to 87.5 percent, as compared to 29 percent for the general assessment rate for corporate property. And unlike other industries, oil and natural gas extraction establishments pay royalties and taxes on the value of production, in addition to taxes paid on earnings. The state receives royalties for oil and gas production from state and federal lands and severance taxes on all production in Colorado.”

In Colorado, “where it is nearly impossible to raise taxes, a billion dollars from a single industry is a significant revenue stream that should be trumpeted,” COGA CEO Dan Haley said in a prepared statement that accompanied the report.