Diversity of Colorado’s energy sector stays strong, says new report

Despite struggles among coal producers and oil and gas companies, Colorado’s energy sector as a whole remains strong, according to the seventh annual “Resource Rich Colorado” report from the Colorado Energy Coalition. The coalition is an affiliate of the Metro Denver Economic Development Corp. The report was shared with the Denver Business Journal on Tuesday and will be posted to the EDC’s “Resource Rich Colorado” website. “Colorado’s energy industry is a top-10 performer in about every category, it’s a unique story,” Scott Prestidge, who oversees the EDC’s efforts in the energy industry. “When you think of the resources that are here and the talented workforce that’s here, our research and development resources and the universities, plus the collaboration and the reach across the political aisle when it comes to policy and business-to-business — one of the key takeaways is that amazing diversity in Colorado’s energy sector and that we’re a top performer in every category,” Prestidge said. The sector’s strength and diversity, plus the seven-year track record that the report has under its belt, has allowed the EDC and the Denver Metro Chamber of Commerce to argue in favor of federal policies that will support both traditional fuel sources as well as the renewable sector, said Tom Clark, the EDC’s CEO. “For us to see energy as an industry, and present it as an industry in the last several years particularly to the legislature, it’s taken a lot of emotional tension out of the discussions by providing factual data — which was one of our goals,” Clark said. “The fight was always to steal one sides tax incentive for the other. Now it’s a balancing act, such as opening markets for us producers of oil but also giving certainty to the cleantech center with a long-term tax credits for wind and solar,” Clark said. In August, the EDC and the Denver chamber joined with the Colorado Competitive Council, a business group, on a letter to the state’s congressional delegation asking its members to support lifting the decades-old ban on crude oil exports and also to extend the federal Production Tax Credit for wind power for several years. “We look for opportunities where we can work together,” Prestidge said. According to the report, Colorado ranks: Seventh in oil and gas production; Sixth in natural gas production; 10th in coal production; 10th in the total wind capacity with 2,583 megawatts worth of wind turbines operating; Ninth in solar power capacity with 316 megawatts; And 10th in the number of alternative-fuel vehicles per capita. Over the years, the report has chronicled major changes across the state’s energy sector. Since 2009 the cost of wind power has dropped 56 percent and solar power costs have dropped 78 percent, according to the report. The report estimates there will be another 400 megawatts worth of wind turbines installed in Colorado during 2016, plus an additional 290 megawatts of utility-scale solar power farms. And the amount of oil and gas produced per drilling rig working has climbed six-fold for rigs working in the Denver-Julesburg Basin, an underground cache of natural gas and oil that sprawls north and east of Denver to the state lines. The report indicated that the state’s energy sector, including both fossil fuels and cleantech, directly employs 74,720 people, which support an additional 188,890 indirect jobs throughout the state. The industry’s total economic impact in Colorado was $17.2 billion in 2015, according to the report. One surprise in this year’s report is that the number of people classified as working in Colorado’s “fossil fuel” sector has remained steady, at nearly 50,000 people, compared to 2014. That’s despite the state’s Department of Labor and Employment office recording thousands of unemployment claims from the “mining” sector, which in Colorado is dominated by the oil and gas industry that’s experienced months of contraction nationwide due to low commodity prices. That’s possibly because the “fossil fuel” sector, according to the chamber’s report, includes people working in the utility sector — including those working at power plants and on power line and related engineering projects — as well as employees working in the coal, oil and gas sectors.