Rising success of Colorado oil and gas industry impacts local economy
The RM5 is designed to precisely calculate oil and gas volumes and automate process control using only one simple, safe piece of equipment.
Colorado’s oil and gas comeback efforts appear to be working.
Although the state is not dependent on the industry, as business rises the economy has benefited in a number of ways. One such example is the hotel market in the city of Greeley. The status of the oil and gas industry directly impacts that market’s performance. More oil rigs means more energy workers that need a place to stay.
“Greeley has been one of the stronger performers due to the energy markets, then energy places took a decline,” said Robert Benton, who helps put together the Rocky Mountain Lodging Report. “The hotel industry in Greeley is impacted by oil and gas trends, and the number of new wells is coming back, and activity has increased.”
The Rocky Mountain Lodging Report showed that Greely’s hotel occupancy rate in June was 88.8% with 14,700 out of 16,549 available rooms occupied throughout the month. Greely has also had the highest year-to-date (YTD) occupancy rate in the state: 74.2 percent, up from 64.2% last year. According to Benton, that’s much better than the state YTD average of 68.4%.
If that was not enough to demonstrate the direct impact of the oil and gas industry on Greeley, the city is the only one along the Front Range experiencing this market boom. Nearby Loveland and Fort Collins haven’t changed much, the former dropping 1.2 percent and the latter increasing by just under a third of a percent.
The lodging market is only one of many that is affected by the success or failure of the oil and gas industry in Colorado. A 2014 report by the Colorado Oil and Gas Association (COGA) showed that development in the oil and gas industry contributed $31.7 billion in total economic impact that year. It also supported 102,700 jobs and provided $7.6 billion in compensation. The report states:
“The oil and gas industry, along with nearly all extraction industries, inherently provides substantial economic benefits due to its integrated supply chain, high wage jobs, and propensity to sell nationally and globally. Much of Colorado’s oil and gas is sold outside of the state, contributing wealth to owners, employees, governments, and schools, all of which are beneficiaries of oil and gas revenues.”
In addition, the report showed that schools were a major beneficiary, receiving $178 million in 2014. Colorado State University received $1 million. There were also huge benefits for state parks and wildlife. On an individual basis, Colorado residents saw the effects in their taxes, their payroll, and other parts of their financial well being.
The oil and gas industry is a powerful one, and is constantly undergoing regulation to ensure safety and responsibility in its operations and effects on surrounding communities. When it succeeds, however, the benefit spreads not just to business executives, but to everyone the industry touches.
- Header Photo Attribution: Tony Webster via Wikipedia Commons
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