Jobs, taxes, leases have $22.9 billion impact, study says.

The state’s oil and gas industry is an economic powerhouse, pouring $22.9 billion into the economy, creating 70,000 jobs and adding $640.5 million in taxes, according to a study released Thursday.

Lawmakers, nonetheless, have passed a bevy of new laws and penciled in some future ones that restrict the extraction of the state’s resources.

The $300,000 study, funded by the state legislature, was conducted by the Colorado School of Mines. It found oil and gas production accounted for 6.1 percent of the gross state product - making the energy industry one of the biggest contributors to Colorado’s economy.

“This study clearly demonstrates the importance of oil and gas to Colorado’s economy and what those of us in the industry knew intuitively,” said Doug Hock, spokesman for Denver- based EnCana Oil and Gas, one of the state’s top oil and gas producers. “Hopefully, this information will provide a guidance as public policies are being considered.”

Based on 2005 data, the joint analysis by the Mines’ Colorado Energy Research Institute and consultants Booz Allen Hamilton concludes that the state oil and gas industry employs 70,000 people and pays on average $60,881 per worker.

The industry’s impact likely exceeded $24 billion in 2006, partly because of the higher cost of drilling equipment and labor, said Dag Nummedal, CERI director.

Earlier this year, energy companies had complained about the slew of proposed bills to reform and regulate the oil and gas industry.

The Democratic-controlled Colorado House and Senate heard at least 50 bills related to energy development. The legislature passed nearly two dozen of them, some aimed at minimizing the impact of oil and gas drilling on the environment, wildlife and human health.

A key bill overhauled the Colorado Oil and Gas Conservation Commission, the state agency that regulates the energy industry. The bill expands the commission to include environmental oversights and no longer guarantees industry majority representation.

Gov. Bill Ritter has yet to name members of the new commission. Also, state officials have not yet announced new energy development rules.

“We know there’s going to be a series of rule-makings in different areas,” said Greg Schnacke, who heads the Colorado Oil and Gas Conservation Commission. “We don’t know what it means yet.

“That’s the definition of regulatory uncertainty, and industry doesn’t like regulatory uncertainty.”

A majority of the new rules will be in place by April 2008, said Brian Macke, director of the commission. The commission would include suggestions from industry, as well as environmental activists and local governments, during rule-making, Macke said.

“While we recognize the importance of oil and gas in the state, there’s a strong interest to balance that with mitigating the potential impacts to the public and to the environment.”

The study found private mineral royalties and lease payments by the oil and gas industry totaled $808 million. Royalties are fees, usually a percentage of the oil and gas extracted from a property, paid by companies to the owners of mineral rights of that property.

Lorena Kiser knows firsthand about the industry’s impact. She recently flew back from Atlanta after visiting her brothers. Earlier this year, she visited Utah.

Royalty checks that she receives each month from oil and gas production in her fields in Yuma paid for the trips.

The 75-year-old widow says those checks, averaging about $12,000 a year, have helped supplement her farm income the past couple of years.

“Without those (checks) I wouldn’t be able to do some of the things I do,” said Kiser, who lives in Vernon.

The study also concluded that state and local governments earned $640.5 million in tax revenue and $117.5 million in personal income tax. Those earnings likely will fall this year because of lower gas prices.

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