ENERGY ECONOMICS

Historically, extraction of resources—minerals, oil & gas and timber-- was the basis for
many local economies in the West. In recent years, the region has moved toward
exploiting the values of its natural bounty—the scenery, wildlife and clean air and water
—to attract dollars. Tourists, retirees and workers in the new economy are drawn to the
West because of its outdoor amenities and quality of life.

While it’s true that some counties have reaped economic benefits from energy
development, it remains a very small part of the region’s overall economy. The historic
boom and bust cycle of the energy industry raises questions about its reliability as a
long term, sustainable economic engine; and the threats it poses to the region’s unique
resource: The environment.

• Energy is a relatively small portion of the economy in most western states. The
percent of total personal income from people employed in energy development is
as follows: Colorado (2.2%), Montana (2.6%), New Mexico (3.1%) and Utah
(1.4%). 1

• In Wyoming, energy represents 13.7% of total personal income. It is also the

least economically diverse state in the nation (the most reliant on a single
industry), and therefore the most vulnerable to change.2

• Counties that have focused on energy development are underperforming

economically compared to their peers with little or no energy development. From
1990 to 2005, real personal income in energy-focused counties grew 2.3% per
year, compared to 2.9% for their peers in the rest of the West. Similarly,
employment rates grew by 1.8 % in the energy focused counties, compared to
2.3 percent for non-energy counties.3

• Northwest Colorado communities may face a shortfall of up to $1.3 billion for the
capital improvements required to support oil shale development.4

• The share of total jobs in energy-related fields has declined, from 23% in 1982
(past energy boom) to 14% in 2005 (current energy boom). Today, a more
efficient energy industry employs fewer workers per measure of output.5

• In 2006, the clean energy industry generated nearly $1 trillion in industry sales,
8.5 million jobs, more than $100 billion in industry profits, and more than $150
billion in increased federal, state, and local government tax revenues. 6

• A recent review of 13 independent reports and studies concluded that the

renewable energy sector generates more jobs than the fossil fuel-based energy
sector per unit of energy delivered (i.e., per average megawatt).7
• The vast majority of the jobs created in the clean energy sector are standard jobs
for accountants, engineers, computer analysts, clerks, factory workers, truck
drivers, mechanics and other service sector employees 8
•
• 33.9 million hunters and anglers spent $76.7 billion on their activities in 2006. On
average $2,263. per person.9

• More than 71 million people spent nearly $45 billion observing, feeding and
photographing wildlife in 2006.10

• Leisure and Hospitality industry as percentage of all jobs in the interior west 11

 AZ 9.3%
 CO 10.5%
 ID 8.8%
 MT 12.4%
 NV 25.8%
 NM 9.5%
 UT 8.7%
1U.S. Department of Commerce, 2008, REGIONAL ECONOMIC INFORMATION ACCOUNTS, Bureau of Economic analysis,
Washington D.C. at: http://bea.gov/regional/index.htm.
2Tim R. Smith, 1996. "The Relationship between the Tenth District Economy and the National Economy", Federal Reserve Bank
of Kansas City Economic Review Fourth Quarter, 81 (4): 77-90. http://www.kc.frb.org/publicat/econrev/pdf/4q96smit.pdf. Buck
McVeigh, Wyoming Economic Analysis Division, Wyoming Economic Outlook,” presentation to the American Association of
Petroleum Geologists, Billings, Montana, June 11, 2006.
3 Fossil-Fuel Extraction as a County Economic Development Strategy: The Performance of Energy-focusing Counties Compared
to their Peers in the West, forthcoming report, 2008. Headwaters Economics. www.headwaterseconomics.org/energy
4 Associated
Governments of Northwest Colorado, NW Colorado Socioeconomic Analysis and Forecasts, 2008, http://
www.agnc.org/reports.html
5Headwaters Economics, The Surge in Energy Jobs in the West: Economic Consequences for Counties, forthcoming report,
2008 headwaterseconomics.org.energy
6Daniel M. Kammen, Kamal Kapadia, and Matthias Fripp (2004 – Updated January 2006), “Putting Renewables to
Work: How Many Jobs Can the Clean energy Industry Generate?” RAEL Report, University of California, Berkeley.
Available at rael.berkeley.edu/files/2004/Kammen-Renewable-Jobs-2004.pdf
7Management Information Services, Inc and American Solar Energy Society, Renewable Energy and Energy Efficiency:
Economic Drivers for the 21st Century, 2007 www.ases.org/ASES-JobsReport-Final.pdf
8 Ibid
9 US Fish & Wildlife Service, 2006 National Survey of Fishing, Hunting and Wildlife-Associated Recreation. http://
library.fws.gov/nat_survey2006_final.pdf

10 Ibid
11 US Bureau of Labor Statistics, Economy at a Glance http://stats.bls.gov/eag/