Economic Impacts of Utah’s Energy Industry, 2017
John C. Downen, Deputy Director of Economic and Public Policy Research, Kem C. Gardner Policy Institute Thomas Holst, Senior Energy Analyst, Kem C. Gardner Policy Institute Michael D. Vanden Berg, Energy and Minerals Program Manager, Utah Geological Survey
February 2020 The Kem C. Gardner Policy Institute thanks the Utah Governor’s Office of Energy Development for their assistance with this report.
Economic Impacts of Utah’s Energy Industry, 2017 Analysis in Brief Utah’s diverse energy industry plays a significant role in the • Low Retail Energy Prices—Prices range from 6% to 23% state’s economy. It encompasses traditional fossil fuels and below the national average for most energy users. At renewable resources. The mining sector produces crude oil, current consumption levels, if Utahns were paying national natural gas, and coal. Power producers generate electricity from average prices they would pay $578.4 million more for hydropower, geothermal, solar, wind, and biomass resources electricity and natural gas. Because of these low prices, and distribute it within the state and across the western U.S. Five state GDP is about 0.4% larger than it would have been refineries process crude oil from Utah, Colorado, Wyoming, and under national average prices, employment is about 0.3% Canada, and Utah has the only licensed and operating uranium higher, and earnings are about 0.7% higher. mill in the country. Dozens of firms manufacture machinery for • Energy Production—In 2017, Utah produced mining and the oil and gas fields as well as turbines, generators, – 34,437,937 barrels of crude oil worth $1.6 billion, transformers, and other electrical equipment. There are more 11th in the nation than 60 petroleum wholesalers and 30 fuel dealers across the – 315,197,367,000 cubic feet of natural gas worth $1.0 state. Solar installation and energy efficiency activities support billion, 13th in the nation thousands of jobs. – 14,417,284 short tons of coal worth $505.1 million, 10th in the nation Key Findings – 32,315,000 MWh of electricity from coal, natural gas, • Share of the Economy—In 2017, Utah’s energy industry and other fossil fuels directly and indirectly supported 3.8% of the state’s – 4,922,000 MWh of electricity from solar, hydro, employment, 4.2% of its earnings, and 5.7% of its gross geothermal, wind, and biomass domestic product (GDP). – 2,211,000 MWh of utility-scale solar, fifth in the nation • Jobs—Energy activities provided an estimated 38,514 full- and part-time jobs, 1.9% of total jobs in the state. Utah Energy Industry Economic Impacts, 2017 • Earnings—Energy workers earned more than $1.9 billion in 2017, 1.9% of total earnings paid.1 Average earnings 6.0% 5.7% $9.4 (excluding energy efficiency jobs) were $81,257 per annum, 5.0% Uintah 32.7% 60% higher than the statewide average for all industries. 4.2% $4.5 4.0% 3.8% $4.3 • GDP—Utah’s energy industry directly contributed $4.9 76,425 San Juan 11.9% 2 billion to the state’s GDP, 3.0% of the total. 3.0% $2.3 37,911 34,437,937 Sevier 3.5% • Multiplier Effects—Energy industry purchases supported barrels 2.0% Grand 1.2% an additional 37,911 jobs, $2.3 billion in earnings, and $4.9 Other 1.3% almost $4.5 billion in state GDP. The energy industry’s total Share of Utah Economy 1.0% 38,514 $1.9 economic impacts in Utah in 2017 included 76,425 jobs, Duchesne 49.3% 0.0% $4.3 billion in earnings, and $9.4 billion in state GDP. Employment Earnings State GDP • State and Local Fiscal Impacts—Energy-related royalties, (Jobs) (Billions) (Billions) severance taxes, conservation fees, property taxes, and Direct Indirect and Induced sales taxes totaled $492.1 million in 2017. Note: Does not include direct earnings and GDP associated with energy efficiency jobs. Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of Workforce Services, U.S. Bureau of Economic Analysis, Utah Geological Survey, National $3.5 Association of State Energy Officials, Energy Futures Initiative, and Energy Fuels using the REMI PI+ model Oil and Gas Development and Production 20.8% Rooftop and Utility-Scale Solar 15.2% $3.0 INFORMED DECISIONSTM gardner.utah.eduElectricity Distribution I February6.8% 2020 Energy Distribution 4.4% $2.5 Coal Mining 3.9% Electricity Generation 3.3% $2.0 Oil and Gas Re ning 3.2% Energy Trade 2.1% $1.5 Mining Machinery Mfg 1.6% Turbine, Transformer, $1.0 Solar Equip Mfg 0.6% Billions of Constant 2018 Dollars Uranium Milling 0.1% $0.5
Energy E ciency 38.0% $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
45.0 500.0
40.0 450.0 400.0 35.0 350.0 30.0 300.0 25.0 250.0 20.0 200.0 Billion Cubic Feet Millions of Barrels 15.0 150.0 100.0 10.0 50.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other Natural Gas Coalbed Methane 6.0% 5.7% $9.4 5.0% Uintah 32.7% 4.2% $4.5 4.0% 3.8% $4.3 76,425 San Juan 11.9% 3.0% $2.3 37,911 34,437,937 Sevier 3.5% barrels 2.0% Grand 1.2% $4.9 Other 1.3% Share of Utah Economy 1.0% 38,514 $1.9 Duchesne 49.3% 0.0% Employment Earnings State GDP (Jobs) (Billions) (Billions) Direct Indirect and Induced
Energy Industry Employment by Sector, 2017 $3.5 Oil and Gas Development and Production 20.8% Rooftop and Utility-Scale Solar 15.2% $3.0 Electricity Distribution 6.8% Energy Distribution 4.4% $2.5 Coal Mining 3.9% Electricity Generation 3.3% $2.0 Oil and Gas Re ning 3.2% Energy Trade 2.1% $1.5 Mining Machinery Mfg 1.6% Turbine, Transformer, $1.0 Solar Equip Mfg 0.6% Billions of Constant 2018 Dollars Uranium Milling 0.1% $0.5
Energy E ciency 38.0% $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sector Jobs Energy Efficiency1 14,626 Oil45.0 and Gas Development and Production 7,999 500.0 Rooftop and Utility-Scale Solar 2 5,862 40.0 450.0 Electricity Distribution 2,602 400.0 35.0 Energy Distribution 1,710 350.0 Coal30.0 Mining 1,496 300.0 Electricity25.0 Generation 1,290 250.0 Oil and Gas Refining 1,223 20.0 200.0 Energy Trade 809 Billion Cubic Feet
Millions of Barrels 150.0 Mining15.0 Machinery Manufacturing 601 100.0 Turbine,10.0 Transformer, Solar Equipment Manufacturing 250 Uranium Milling 46 50.0 5.0 Total 38,514 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 1. Includes 2008jobs where2009 workers2010 spend2011 at least2012 half of2013 their time2014 on energy2015 efficiency–2016 2017 related tasks. Other Natural Gas Coalbed Methane 2. Excludes jobs at solar utilities and solar equipment manufacturers, which are counted in those sectors. Source: Utah Department of Workforce Services; Bureau of Labor Statistics, Quarterly Census of Employment and Wages; Bureau of Economic Analysis; National Association of State Energy Officials; Energy Futures Initiative; Solar Foundation; Energy Fuels
February 2020 I gardner.utah.edu INFORMED DECISIONSTM Table of Contents
Introduction ...... 1 Figure 15: Refinery Employment in Utah, 2008–2017. . . .7 Terms Used...... 2 Figure 16: Utah Coal Resources and Active Mines . . . . . 7 Economic Impacts...... 3 Figure 17: Coal Production in Utah, 2008–2017...... 8 Oil and Gas Development and Production...... 3 Figure 18: Utah Coal Production by County, 2017 . . . . . 8 Oil Refining...... 6 Figure 19: Value of Coal Production in Utah, 2008–2017. . 8 Coal...... 7 Figure 20: Coal Mining Employment in Utah, 2008–2017. .8 Electricity Generation...... 9 Figure 21: Net Utility-Scale Electricity Generation in Mining and Oil and Gas Field Machinery Manufacturing. . 12 Utah, 2008–2017 ...... 9 Turbine, Transformer, and Solar Equipment Figure 22: Fuel Mix of Utility-Scale Electricity Generatio Manufacturing ...... 12 in Utah, 2017...... 9 Uranium...... 13 Figure 23: Identified Renewable Energy Resources in Utah. . .9 Other Energy Sectors...... 13 Figure 24: Net Utility-Scale Electricity Generation in Electricity Distribution...... 13 Utah from Renewable Sources, 2008–2017...... 10 Oil and Gas Product Distribution ...... 13 Figure 25: Retail Sales of Electricity in Utah by Sector, Solar ...... 14 2008–2017...... 11 Energy Efficiency ...... 15 Figure 26: Per Capita Retail Sales of Electricity in Utah, Fiscal Impacts...... 16 2008–2017...... 11 Energy Prices...... 18 Figure 27: Electric Utility Employment in Utah, Industry SWOT Analyses...... 20 2008–2017...... 11 Oil and Gas...... 20 Figure 28: Mining and Oil and Gas Field Machinery Mineral Fuels...... 20 Manufacturing Employment, 2008–2017...... 11 Wind...... 21 Figure 29: Turbine and Transformer Manufacturing Solar ...... 22 Employment, 2008–2017 ...... 12 Geothermal...... 23 Figure 30: U3O8 Production and Uranium Mining Methodology ...... 23 Establishments in Utah, 2008–2017 ...... 12 Economic Impact Model...... 23 Figure 31: Electricity Distribution Employment, Fiscal Impact Model...... 23 2008–2017...... 13 Conclusion...... 24 Figure 32: Oil and Gas Product Distribution Employment, 2008–2017 ...... 13 Figures Figure 33: Energy Trade Employment and Figure 1: Utah Energy Industry Economic Impact, 2017. . .1 Establishments, 2008–2017...... 14 Figure 2: Energy Industry Employment by Sector, 2017. . .2 Figure 34: Estimated Small-Scale Solar Photovoltaic Figure 3: Oil and Gas Deposits and Active Fields in Utah. . 3 Capacity in Utah, 2014–2017...... 14 Figure 4: Oil Shale and Oil Sands Deposits in Utah. . . . . 4 Figure 35: Estimated Small-Scale Solar Photovoltaic Figure 5: Crude Oil Production in Utah, 2008–2017. . . . .4 Generation in Utah, 2014–2017 ...... 14 Figure 6: Utah Crude Oil Production by County, 2017. . . .4 Figure 36: Solar Jobs in Utah, 2015–2017 ...... 14 Figure 7: Value of Crude Oil Production in Utah, Figure 37: Total State and Local Energy-Related Revenues 2008–2017...... 5 and Average Crude Oil Wellhead Prices, 2008–2017. . 16 Figure 8: Natural Gas Production in Utah, 2008–2017. . . .5 Figure 38: Annual Change in Nominal Crude Oil Figure 9: Utah Natural Gas Production by County, 2017. . .5 Wellhead Price and Oil and Gas Jobs, 1991–2017. . . . 18 Figure 10: Value of Natural Gas Production in Utah, Figure 39: Effects of Utah’s Low Energy Prices...... 18 2008–2017...... 5 Figure 40: Changes in Value Added by Industry Figure 11: Wells Spudded in Utah, 2008–2017...... 5 Due to Lower Energy Prices...... 19 Figure 12: Wellhead Prices in Utah, 2008–2017...... 6 Figure 41: Economic SWOT Analysis of Utah’s Oil Figure 13: Oil and Gas Development and Production and Gas Sector ...... 20 Employment in Utah, 2008–2017...... 6 Figure 42: Economic SWOT Analysis of Utah’s Figure 14: Utah Monthly Refinery Inputs, 2008–2017. . . .6 Mineral Fuels Sector...... 21
INFORMED DECISIONSTM gardner.utah.edu I February 2020 Figure 43: Economic SWOT Analysis of Utah’s Wind Sector...... 21 Figure 44: Economic SWOT Analysis of Utah’s Solar Sector ...... 22 Figure 45: Economic SWOT Analysis of Utah’s Geothermal Energy Sector ...... 22
Tables Table 1: Components of Utah’s Energy Industry...... 1 Table 2: Economic Impacts of Utah’s OIl and Gas Development and Production Industry, 2017...... 6 Table 3: Economic Impacts of Utah’s OIl Refining Industry, 2017...... 7 Table 4: Economic Impacts of Utah’s Coal Mining Industry, 2017...... 8 Table 5: Economic Impacts of Utah’s Fossil Fuel Electricity Generation, 2017...... 11 Table 6: Economic Impacts of Utah’s Renewable Electricity Generation, 2017...... 11 Table 7: Economic Impacts of Utah’s Mining and Oil and Gas Field Machinery Manufacturing Industry, 2017 . . 11 Table 8: Economic Impacts of Utah’s Turbine, Transformer, and Solar Equipment Manufacturing Industry, 2017 . . 12 Table 9: Economic Impacts of Utah’s Uranium Milling Industry, 2017...... 12 Table 10: Incremental Energy Efficiency Savings, 2017. . 15 Table 11: Direct Energy-Related State and County Revenues, 2017...... 16 Table 12: Direct Energy-Related State and County Revenues, 2008–2017...... 17 Table 13: Additional Energy Industry Estimated State and Local Fiscal Impacts, 2017...... 17 Table 14: Five-Year Average Energy Prices, U.S. vs. Utah. . 18
February 2020 I gardner.utah.edu INFORMED DECISIONSTM Introduction
Energy is fundamental to the functioning of a modern Table 1: Components of Utah’s Energy Industry economy. It enables every production process, whether of goods NAICS Energy Sector or services, and facilitates practically every human endeavor. Oil and Gas Development and Production Utah’s diverse energy industry made significant economic 211000 Oil and Gas Extraction impacts in the state in 2017. The industry directly and indirectly 213111 Drilling Oil and Gas Wells supported 3.8% of the state’s employment, 4.2% of its earnings, 213112 Support Activities for Oil and Gas Operations and 5.7% of its gross domestic product (GDP) (see Figure 1). In 541360 Geophysical Surveying and Mapping Services 2017, energy activities provided an estimated 38,514 full- and 324110 Oil and Gas Refining part-time jobs. This represents 1.9% of total jobs in the state and Coal Mining is similar to the number of jobs at Utah’s hospitals. Earnings paid 212100 Coal Mining to energy workers totaled more than $1.9 billion, 1.9% of total 213113 Support Activities for Coal Mining earnings paid.3 Average earnings in 2017 (excluding energy 221112 Fossil Fuel Electricity Generation
efficiency jobs) were $81,257 per annum, 60% higher than Renewable Electricity Generation the statewide average for all industries. Utah’s energy industry 221111 Hydroelectric contributed $4.9 billion to the state’s GDP, 3.0% of the total.4 221114 Solar In addition to this direct economic activity, energy industry 221115 Wind purchases supported 37,911 jobs, $2.3 billion in earnings, and 221116 Geothermal almost $4.5 billion in state GDP. The energy industry’s total 221118 Other economic impacts in Utah in 2017 included 76,425 jobs, $4.3 333130 Mining and Oil and Gas Field Machinery Manufacturing billion in earnings, and $9.4 billion in state GDP. Turbine, Transformer, and Solar Equipment Manufacturing Utah’s energy industry comprises oil and gas development 332 Fabricated Metal Product Manufacturing and production; oil refining; coal mining; electricity generation 333611 Turbine and Turbine Generator Set Units Manufacturing from both fossil fuels and renewable sources; mining and 335 Electrical Equipment and Component Manufacturing 335311 Electric Power and Specialty Transformer Manufacturing oil and gas field machinery manufacturing; electric turbine, transformer, and solar equipment manufacturing; uranium Electricity Distribution 221120 Electric Power Transmission and Distribution milling; electricity distribution; oil and gas product distribution; 237130 Power and Communication System Construction wholesale and retail energy trade; rooftop and utility-scale solar installation; and energy efficiency. Table 1 provides the Energy Distribution 221200 Natural Gas Distribution specific industries that make up most of these sectors, based 237120 Oil and Gas Pipeline Construction 486 Pipeline Distribution Figure 1: Utah Energy Industry Economic Impact, 2017 488999 Watco Trans Loading/Price River Terminal
6.0% 5.7% Energy Trade, Wholesale and Retail $9.4 424710 Petroleum Bulk Stations and Terminals 5.0% 424720 Petroleum Wholesalers Uintah 32.7% 4.2% $4.5 454310 Fuel Dealers 4.0% 3.8% $4.3 San Juan 11.9% 76,425 Uranium Milling 3.0% $2.3 212291 Uranium-Radium-Vanadium Mining 37,911 34,437,937 Sevier 3.5% Rooftop and Utility-Scalebarrels Solar* 2.0% Grand 1.2% $4.9 238 Specialty Trade Contractors Other 1.3% Share of Utah Economy 1.0% 38,514 $1.9 42 Wholesale Trade 54 Professional, Scientific, and Technical Services Duchesne 49.3%
0.0% Energy Efficiency Employment Earnings State GDP (Jobs) (Billions) (Billions) 23 Construction 31–33 Manufacturing Direct Indirect and Induced 42 Wholesale Trade Note: Does not include direct earnings and GDP associated with energy efficiency jobs. 54 Professional, Scientific, and Technical Services Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of Workforce Services, U.S. Bureau of Economic Analysis, Utah Geological Survey, National 81 $3.5 Other Services Association of State Energy Officials, Energy Futures Initiative, and Energy Fuels using the * Excludes jobs at solar utilities and solar equipment manufacturers, which are counted in Oil and Gas Development and Production 20.8% REMI PI+ model those sectors. Rooftop and Utility-Scale Solar 15.2% $3.0 Electricity Distribution 6.8% TM INFORMED DECISIONS Energy Distribution 4.4% 1 $2.5 gardner.utah.edu I February 2020 Coal Mining 3.9% Electricity Generation 3.3% $2.0 Oil and Gas Re ning 3.2% Energy Trade 2.1% $1.5 Mining Machinery Mfg 1.6% Turbine, Transformer, $1.0 Solar Equip Mfg 0.6% Billions of Constant 2018 Dollars Uranium Milling 0.1% $0.5
Energy E ciency 38.0% $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
45.0 500.0
40.0 450.0 400.0 35.0 350.0 30.0 300.0 25.0 250.0 20.0 200.0 Billion Cubic Feet Millions of Barrels 15.0 150.0 100.0 10.0 50.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other Natural Gas Coalbed Methane on the North American Industry Classification System (NAICS).5 In addition to jobs, earnings, and GDP, Utah’s energy industry The solar installation and energy efficiency sectors do not generates a significant amount of revenue for state and local align neatly with specific NAICS industries, but instead consist governments. Energy-related royalties, severance taxes, of specific firms and occupations drawn from construction, conservation fees, property taxes, and sales taxes totaled manufacturing, wholesale trade, professional, scientific, and $492.1 million in 2017. The total economic activity created by 6.0% 5.7% technical services, and other services like maintenance$9.4 and the energy industry also led to net revenues of $230.4 million in 5.0% nonprofit organizations. state income taxes, state and local sales taxes, andU ilocalntah 32.7% property 4.2% Figure 2 shows the distribution of Utah’s energy$4.5 industry taxes. Total combined state and local revenues attributable to 4.0% 3.8% $4.3 employment 76,425across its component sectors. Three sectors the energy industry were $722.5 million in 2017.San Juan 11.9% accounted3.0% for three-quarters of$2.3 energy jobs. The largest by The Gardner Institute used the REMI PI+ model to estimate 37,911 34,437,937 Sevier 3.5% far was energy efficiency, with 14,626 jobs, nearly 40% of economic impacts. PI+ is a dynamic simulation model that barrels Grand 1.2% direct2.0% energy jobs.6 Oil and gas development and production estimates the economic and demographic effects of changes $4.9 Other 1.3% providedShare of Utah Economy 1.0% 7,99938,514 jobs in 2017, representing$1.9 one-fifth of the to input variables. In addition to the input-output/supply industry. There were an estimated 5,862 solar jobs, excluding chain relationships captured by traditional multiplierDuchesne models 49.3% those0.0% at solar utilities and solar equipment manufacturers, like IMPLAN or RIMS II, PI+ also calculates general equilibrium Employment Earnings7 State GDP accounting for(Jobs) 15% of the total.(Billions) The remaining (Billions)nine sectors effects, econometric relationships, and economic geography provided approximatelyDirect 10,000Indirect jobs. and Induced effects. In most cases the inputs used were industry employment and wages provided by the Utah Department of Workforce Figure 2: Energy Industry Employment by Sector, 2017 Services, the U.S. Bureau of Labor Statistics, and the U.S. Bureau of $3.5Economic Analysis. In some cases, detailed industry-level Oil and Gas Development and Production 20.8% employment numbers from DWS or BLS were adjusted to $3.0 Rooftop and Utility-Scale Solar 15.2% include the jobs of the self-employed (“proprietors”), which are Electricity Distribution 6.8% Energy Distribution 4.4% not$2.5 included in data from these agencies but are included in Coal Mining 3.9% less detailed data from BEA. Energy efficiency and solar jobs Electricity Generation 3.3% were$2.0 produced by BW Research for the 2018 U.S. Energy and Oil and Gas Re ning 3.2% Employment Report and the Solar Jobs Census. Energy Trade 2.1% $1.5 Mining Machinery Mfg 1.6% Turbine, Transformer, Terms$1.0 Used Solar Equip Mfg 0.6%
EconomicBillions of Constant 2018 Dollars impacts are the changes in the size and structure Uranium Milling 0.1% of $0.5a region’s economy that occur when goods and services Energy E ciency 38.0% are$0.0 purchased from vendors within the region with money 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sector Jobs generated outside the region. In the strictest interpretation, Energy Efficiency1 14,626 economic impacts occur only when “new” money enters the Oil and Gas Development and Production 7,999 regional economy and is then spent locally. Such an inflow has Rooftop45.0 and Utility-Scale Solar 2 5,862 the500.0 potential to expand the size and strength of the region’s Electricity40.0 Distribution 2,602 economy.450.0 Economic impacts can also be said to occur if residents Energy Distribution 1,710 would400.0 have to import goods or services if a particular industry 35.0 did not exist locally. This “import substitution” argument can Coal Mining 1,496 350.0 Electricity30.0 Generation 1,290 be applied to, for example, oil and gas that is produced and 300.0 Oil25.0 and Gas Refining 1,223 consumed in the state. In the absence of an import substitution 250.0 Energy Trade 809 rationale, purchases of goods and services by local residents 20.0 200.0 Mining Machinery Manufacturing 601 from local vendors do not increase the economic base of the Billion Cubic Feet
Millions of Barrels 150.0 Turbine,15.0 Transformer, Solar Equipment Manufacturing 250 region; they simply reshuffle existing resources. Uranium Milling 46 100.0 10.0 Direct impacts are the first round of changes in economic Total 38,514 50.0 5.0 activity within a region. In this study they are the jobs, earnings, 1. Includes jobs where workers spend at least half of their time on energy efficiency– 0.0 related tasks. and output2008 at 2009the exporting,2010 2011 or2012 import-substituting,2013 2014 2015 industries.2016 2017 0.0 2. Excludes2008 jobs at solar2009 utilities2010 and2011 solar equipment2012 2013 manufacturers,2014 2015 which2016 are counted2017 Other Natural Gas Coalbed Methane in those sectors. Indirect impacts are the changes in production, earnings, and Source: Utah Department of Workforce Services; Bureau of Labor Statistics, Quarterly employment within the region in backward-linked industries Census of Employment and Wages; Bureau of Economic Analysis; National Association of State Energy Officials; Energy Futures Initiative; Solar Foundation; Energy Fuels that supply goods and services to the industry under study.
February 2020 I gardner.utah.edu 2 INFORMED DECISIONSTM Induced impacts are the increased sales within the region from State gross domestic product (GDP) is the most commonly used household spending of the income earned at both the business measure of total economic activity in a region. GDP avoids or industry under study and local supplying businesses. double counting of intermediate sales and captures only the Employment is a measure of jobs, not workers. Full- and part- “value added” to final products by capital and labor. From an time jobs are counted equally, and both wage and salary accounting perspective, value added is the sum of employee positions and the self-employed are included. Employment is compensation, taxes on production and imports less subsidies, reported by place of work, rather than place of residence. and gross operating surplus, a measure of profit. Alternatively, it can be thought of as total output or sales less the value of Earnings are the sum of wage and salary disbursements, intermediate inputs purchased to produce that output. Value employer contributions for pension and insurance funds and added is equivalent to the state gross domestic product for government social insurance, and the income of the self- measure. employed. Earnings are reported by place of work.
Economic Impacts
Oil and Gas Development Figure 3: Oil and Gas Deposits and Active Fields in Utah and Production The oil and gas development and 84 Crude oil field Natural gas field CACHE Coalbed methane field production industry consists of geo- Crude oil pipeline Basin boundary
RICH Pet. products pipeline County boundary physical surveying and mapping, drill- 15 Natural gas pipeline Interstate highway ing oil and gas wells, oil and gas ex- BOX ELDER # Petroleum refinery # Natural gas WEBER processing plant traction, and support activities for oil 0 20 40 Data Source: UGS, DOGM MORGAN miles 8 DAVIS and gas operations. As of 2017, Utah 80 # # DAGGETT had an estimated 285 million barrels of # ## 80 crude oil reserves, 134 million barrels SUMMIT SALT Uinta Basin of natural gas liquids reserves (101 mil- LAKE DUCHESNE UINTAH TOOELE WASATCH lion barrels of natural gas liquids plus #
33 million barrels of lease condensate), # # and 3.9 trillion cubic feet of natural # # ### UTAH gas reserves (nonassociated, including coalbed methane, and associated-dis- JUAB 15 # solved). Figure 3 shows the geographi- CARBON cal distribution of the state’s oil and gas
fields, as well as pipelines and refiner- GRAND ies. In addition, there are an estimated SANPETE # # MILLARD EMERY potential economic resource of 77 bil- 70 70 lion barrels of oil in oil shale and 14 to #
15 billion barrels of measured in-place SEVIER oil in oil sands (see Figure 4). BEAVER Utah was the nation’s 11th largest PIUTE Paradox WAYNE Basin producer of crude oil in 2017, with 34.4 # million barrels. This was 16% below 15 IRON production in 2014, which was the GARFIELD highest since 1985 (see Figure 5). Oil is SAN JUAN regularly produced in 11 of the state’s WASHINGTON 29 counties. Nearly half of the state’s # production is in Duchesne County, KANE about one-third comes from Uintah,
Source: Utah Geological Survey; State of Utah, SGID.
INFORMED DECISIONSTM 3 gardner.utah.edu I February 2020 and San Juan accounts for a little over Figure 4: Oil Shale and Oil Sands Deposits in Utah one-tenth. The remainder is produced Thickness of the 25 gallon 84 Data Source: UGS in Sevier, Grand, Summit, Garfield, per ton oil shale zone Sanpete, Carbon, Daggett, and Emery CACHE >0-5 ft Oil sand deposit RICH 5-20 ft counties (see Figure 6). BOX ELDER 15 20-40 ft Basin boundary 40-60 ft County boundary 60-80 ft Interstate highway The value of crude oil produced in WEBER 80-100 ft 0 20 40 Utah peaked in 2014 at $3.4 billion, in MORGAN 100-130 ft miles 6.0% DAVIS inflation-adjusted 2018 dollars. Under 5.7% 80 $9.4 DAGGETT falling5.0% prices and shrinking output, the SUMMIT 80 Uintah 32.7% state’s oil production was worth4.2% less $4.5 DUCHESNE SALT Asphalt 4.0% 3.8% $4.3 LAKE Ridge than $1.2 billion in 2016. Production San Juan 11.9% 76,425 WASATCH UINTAH began to recover in 2017, reaching TOOELE 3.0% $2.3 almost $1.6 billion37,911 (see Figure 7). 34,437,937 Oil Shale DepositsSevier 3.5% barrels With2.0% 315 billion cubic feet (bcf) of Grand 1.2% UTAH gross production in 2017, Utah was the $4.9 Other 1.3% Share of Utah Economy 1.0% 38,514 $1.9 13th largest natural gas producer in the JUAB Duchesne 49.3% U.S. However, output was about one- 15 Uinta Basin 0.0% CARBON PR Springs third lower thanEmployment an all-time high Earningsof over State GDP Sunnyside (Jobs) (Billions) (Billions) 490 bcf in 2012 (see Figure 8). About 10% SANPETE EMERY of Utah’s annual naturalDirect gas productionIndirect and Induced MILLARD San Rafael is from coalbed methane fields. 70 70 Swell Natural gas is produced in 10 of $3.5 GRAND SEVIER Utah’s counties.Oil and GAlmostas Development two-thirds and Pr oisduction 20.8% produced in UintahRooftop andCounty. Utility-Scale Duchesne Solar 15.2% $3.0 BEAVER Electricity Distribution 6.8% Tar Sand and Carbon each account for about PIUTE WAYNE $2.5 Triangle one-seventh of the state’s production.Energy Distribution 4.4%
Coal Mining 3.9% 15 The remainder comes from San Juan, $2.0 Electricity GenerationIRON 3.3% Emery, Grand, Summit, Daggett, Oil and Gas Re ning 3.2% GARFIELD Sanpete, and Garfield (see Figure 9). Energy Trade 2.1% $1.5 SAN JUAN Circle Cliffs The value of natural gas and natural Mining Machinery Mfg 1.6% $1.0 Paradox Turbine, Transformer, Basin gas liquids produced in Utah reached Solar Equip Mfg 0.6%
WASHINGTON Billions of Constant 2018 Dollars KANE an all-time high of over $3.6 billion in Uranium Milling 0.1% $0.5
2008, in inflation-adjusted 2018Energy dollars. E ciency 38.0% $0.0 Source: Utah Geological Survey; State of Utah,2008 SGID. 2009 2010 2011 2012 2013 2014 2015 2016 2017
Figure 5: Crude Oil Production in Utah, 2008–2017 Figure 6: Utah Crude Oil Production by County, 2017
45.06.0% 5.7% 500.0 $9.4 450.0 40.05.0% Uintah 32.7% 4.2% 400.0 35.0 $4.5 4.0% 3.8% $4.3 350.0 San Juan 11.9% 30.0 76,425 300.0 3.0% $2.3 25.0 37,911 34,437,937 250.0 Sevier 3.5% barrels Grand 1.2% 20.02.0% 200.0 $4.9 Other 1.3% Billion Cubic Feet Share of Utah Economy Millions of Barrels 15.01.0% 38,514 $1.9 150.0 100.0 Duchesne 49.3% 10.0 0.0% 50.0 5.0 Employment Earnings State GDP (Jobs) (Billions) (Billions) 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 Direct Indirect and Induced Note: “Other” consists of Summit, Garfield, Sanpete, Carbon, Daggett, Emery, and Juab 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 counties. Other Natural Gas Coalbed Methane Source: Utah Division of Oil, Gas and Mining Source: Utah Division of Oil, Gas and Mining $3.5 TM February 2020O il I and gardner.utah.edu Gas Development and Production 20.8% 4 INFORMED DECISIONS Rooftop and Utility-Scale Solar 15.2% $3.0 Electricity Distribution 6.8% Energy Distribution 4.4% $2.5 Coal Mining 3.9% Electricity Generation 3.3% $2.0 Oil and Gas Re ning 3.2% Energy Trade 2.1% $1.5 Mining Machinery Mfg 1.6% Turbine, Transformer, $1.0 Solar Equip Mfg 0.6% Billions of Constant 2018 Dollars Uranium Milling 0.1% $0.5
Energy E ciency 38.0% $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
45.0 500.0
40.0 450.0 400.0 35.0 350.0 30.0 300.0 25.0 250.0 20.0 200.0 Billion Cubic Feet Millions of Barrels 15.0 150.0 100.0 10.0 50.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other Natural Gas Coalbed Methane 6.0% 5.7% $9.4 5.0%6.0% 5.7% Uintah 32.7% 4.2% $9.4 $4.5 4.0%5.0% 3.8% $4.3 SanUint Juanah 32.7% 11.9% 76,425 4.2% $4.5 4.0% 3.8% $4.3$2.3 3.0% 37,911 76,425 34,437,937 SevierSan Juan 3.5% 11.9% barrels 2.0%3.0% $2.3 Grand 1.2% 37,911 34,437,937 Sevier 3.5% $4.9 Other 1.3%
Share of Utah Economy barrels 1.0%2.0% 38,514 $1.9 Grand 1.2% $4.9 DuchesneOther 1.3% 49.3% Share of Utah Economy 0.0%1.0% 38,514 $1.9 Employment Earnings State GDP Duchesne 49.3% 0.0% (Jobs) (Billions) (Billions) EmploymentDirect IndirectEarnings and Induced State GDP (Jobs) (Billions) (Billions) Figure 7: Value of Crude Oil Production in Utah, 2008–2017 Figure 9: Utah Natural Gas Production by County, 2017 Direct Indirect and Induced 00 0 $3.5 0 Oil and Gas Development and Production 20.8% Carb n . $3.5 0 Rooftop and Utility-Scale Solar 15.2% $3.0 00 0 Oil and Gas DevelopmentElectricity and Production Distribution 20.8% 6.8% 0 Rooftop and Utility-Scale Solar 15.2% $2.5$3.0 Du he ne 2. 0 Energy Distribution 4.4% 00 0 Carb n . 0 CoalElectricity Mining Distribution 3.9% 6.8% 0 0 Energy Distribution 4.4% $2.0$2.5 Electricity Generation 3.3% Carb n . 0 315,197,367,000 0 Coal MiningOil 3.9% and Gas Re ning 3.2% Du he ne 2. $2.0 0 EnergyElectricity Trade Generation 2.1% 3.3% $1.5 cubic feet San uan 2. OI e head r e 0 0 Oil and Gas Re ning 3.2% Du he ne 2. N na D ar er N na D ar er arre Mining Machinery Mfg 1.6% E ery 2. 0 20 2 Natura a e head r e $1.5 Turbine,Energy Trade Transformer, 2.1% $1.0 0 315,197,367,000 0 Mining Solar Equip Machinery Mfg 0.6% Mfg 1.6% rand . Billions of Constant 2018 Dollars cubic feet San uan 2. OI e head r e 0 0 UraniumTurbine, Transformer,Milling 0.1% $0.5$1.0 315,197,367,000 Other . 0 0 N na D ar er N na D ar er arre Solar Equip Mfg 0.6% E ery 2. 20 2 Natura a e head r e OI e head r e Billions of Constant 2018 Dollars cubic feet 0 Energy E ciency 38.0% San ntah uan .2 2. 200 200 20 0 20 20 2 20 20 20 20 20 Uranium Milling 0.1% $0.0$0.5 0 rand . N na D ar er N na D ar er arre 20 Natura a e head r e 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 E ery 2. O e head r e N e head r e 2 Energy E ciency 38.0% Other . 0 0 $0.0 rand . 0 Source: Utah2008 Geological2009 Survey2010 2011 2012 2013 2014 2015 2016 2017 Source: Utah Division of Oil, Gas and Mining Other ntah . .2 0 200 200 20 0 20 20 2 20 20 20 20 20 0 .0 2.0 O e head r e N e head r e 45.0 Figure500.0 8: Natural Gas Production in Utah, 2008–2017 Figure 10: Value of Natural Gas Production in Utah, ntah .2 200 200 20 0 20 20 2 20 20 20 20 20 O e head r e N e head r e 40.0 450.0 . 0.0 45.0 500.0 2008–2017 400.0 .0 2.0 35.040.0 450.0 .0 .0 350.0 400.0 2. 30.035.0 .0 . 0.0 2.0 300.0 .0 350.0 25.0 .0 2.0 30.0 250.0 . 0.0 .0 300.0 .0 b th u and 20.025.0 200.0 .0 2. . 250.0 .0 Billion Cubic Feet 2.0 Millions of Barrels 150.0 .0 15.020.0 200.0 2. 2.0 .0
n C n tant 20 D ar .0
Billion Cubic Feet 100.0 b th u and 0.0 Millions of Barrels 10.0 150.0 0. 15.0 2.0 . 200 200 20 0 20 20 2 20 20 20 20 20 50.0 2.0 .0 100.0 b th u and 10.05.0 . .0 0.0 E tra t n Su rt t t e e Dr ng Sur ey ng Ma ng 0.0 200 200 20 0 20 20 2 20 20 20 20 20 50.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 n C n tant 20 D ar 2.0 0.0 0.0 5.0 .0 0. Dry Natura a Natura a u d 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0.0 Other Natural Gas Coalbed Methane 200 200 20 0 20 20 2 20 20 20 20 20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 n C n tant 20 D ar 0.0 0.0 0. 0.0 E tra t n0.0 Su rt t t e e Dr ng Sur ey ng Ma ng 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other Natural Gas Coalbed Methane 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 0.0 0.0 Dry Natura a Natura a u d E tra t n Su rt t t e e Dr ng Sur ey ng Ma ng Source: Utah Division of Oil, Gas and Mining 200 200 200 20 0 20 20 2 20 20 20 20 20 0.0 Source: Utah Geological SurveyDry Natura a Natura a u d 0.0 0.0 000 0.0 By 2017, under falling prices and shrinking output, the state’s Figure 200 11: Wells Spudded in Utah, 2008–2017 0.0 natural gas and natural gas liquids production was worth $1.0 0.0 200 00 M n arre billion (see Figure 10). 000 0.0 20.0 Both oil and gas drilling crashed in 2009 with the recession. 00 000 0.0 While oil exploration immediately rebounded in 2010 (along S ud 00 0.0 M n arre with oil prices), natural gas exploration has remained low due to 00 0.0 20.00.0 00 M n arre continuing low gas prices. Oil exploration activity in Utah began 200 200 20 0 20 20 2 20 20 20 20 20 S ud 0.020.0 to slow after a post-recession peak in 2012, then crashed again 00200 00 in 2015 when oil prices nearly halved (see Figures 11 and 12). At S ud 0.00.0 just 84, the number of wells commenced (“spudded”) in 2016 000 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 was the lowest level in modern history, 93% below the peak of 200 0.0 200 200 20 0 20 20 2 20 20 20 20 20 1,144 spudded in 2008. From 2008 to 2009, the average nominal 200 0 wellhead price for crude oil fell by 42%, from $86.58 per barrel 200 200 20 0 20 20 2 20 20 20 20 20 to $50.22, while natural gas wellhead prices fell by 50%, from 0 200 200 20 0 20 20 2 20 20 20 20 20 $6.82 per mcf to $3.38. Oil prices quickly recovered, reaching Source: Utah Division of Oil, Gas and Mining
INFORMED DECISIONSTM 5 gardner.utah.edu I February 2020 00 0 0 Carb n . 0 0 Du he ne 2. 0 0 315,197,367,000 0
cubic feet San uan 2. OI e head r e 0 N na D ar er N na D ar er arre E ery 2. 20 2 Natura a e head r e
rand . 0 Other . 0 0
ntah .2 200 200 20 0 20 20 2 20 20 20 20 20 O e head r e N e head r e
Figure 12: Wellhead Prices in Utah, 2008–2017 Table 2: Economic Impacts of Utah’s OIl and Gas .0 2.0 00 0 Development and Production Industry, 2017 (Dollar amounts in millions) . 0 0.0 Carb n . 0 .0 00 Impact Direct Indirect and Induced Total 0 .0 0 0 Employment 7,999 24,033 32,032 Du he ne 2. 2. Carb n . 0 0 Earnings .0 $420.7 $1,498.0 $1,918.7 2.0 0 0 State GDP $1,346.8 $2,591.1 $3,937.9 .0 Du he ne 2. 0 b th u and 315,197,367,000 . 0 Note: Oil and gas development and production consists of geophysical surveying and mapping services, drilling oil and gas wells, oil and gas extraction, and support activities cubic feet San uan 2. OI e head r e 0 2.0 .0 0 for oil and gas operations. N na D ar er N na D ar er arre 20 2 Natura a e head r e E ery 2. 0 Source: Kem C. Gardner Policy Institute analysis of data from the Bureau of Economic 315,197,367,000 n C n tant 20 D ar 0. Analysis,0.0 Utah Department of Workforce Services, and Utah Geological Survey using the rand . 0 cubic feet San uan 2. OI e head r e 0 REMI PI+ model200 200 20 0 20 20 2 20 20 20 20 20 Other . 0 0 0.0 N na D ar er E tra t n Su rt t t e e Dr ng Sur ey ng Ma ng N na D ar er arre E ery 2. 20 2 Natura a e head r e 200 200 20 0 20 20 2 20 20 20 20 20
rand ntah . .2 0 200 200 20 0 20 20 2 20 20 20 20 20 Dry Natura a Natura a u d Figure 14: Utah Monthly Refinery Inputs, 2008–2017 0 O e head r e N e head r e 0 Other . 0.0 Source: Utah Geological Survey ntah .2 200 200 20 0 20 20 2 20 20 20 20 20 0.0 O e head r e N e head r e .0 Figure 2.0 200 13: Oil and Gas Development and Production 0.0 Employment in Utah, 2008–2017 . 0.0 000 0.0 .0 2.0 .0 .0 . 00 0.0 2. 0.0 .0 M n arre .0 2.0 20.0 .0 00 .0 b th u and 2. S ud . .0 0.0 2.0 2.0 00 .0 .0 0.0 b th u and n C n tant 20 D ar . 0.0 200 200 20 0 20 20 2 20 20 20 20 20 0. 200 2.0 200 200 20 0 20 20 2 20 20 20 20 20 .0 Source: Utah Geological Survey and U.S. Energy Information Administration 0.0 E tra t n Su rt t t e e Dr ng Sur ey ng Ma ng
n C n tant 20 D ar 200 200 20 0 20 20 2 20 20 20 20 20 0. 0.0 0 200 200 200 200 20 020 0 20 20 20 220 2 20 20 20 20 20 20 20 20 20 20 Dry Natura a Natura a u d Average annual earnings across the oil and gas development 0.0 E tra t n 0.0 Su rt t t e e Dr ng Sur ey ng Ma ng 200 200 20 0 20 20 2 20 20 20 20 20 and production sector were $52,594 in 2017, about on par with Dry Natura a Natura a u d Source: 0.0 Bureau of Economic Analysis; Bureau of Labor Statistics, Quarterly Census of the statewide average of $50,655. Within the sector, average Employment and Wages; and Kem C. Gardner Policy Institute analysis 200 0.0 earnings ranged from $37,470 for oil and gas extraction 0.0 workers to $75,695 for drilling and other support activity jobs. 0.0 000 200 $84.79 0.0 in 2013. However, natural gas prices have remained low, Oil and gas development and production activity generated falling 0.0 as far as $2.24 in 2016 and leading to a steady decline in total economic impacts in Utah of over 32,000 jobs, $1.9 billion 0.0 00 natural gas drilling. Oil and gas prices increased somewhat in in earnings, and $3.9 billion in state GDP (see Table 2). 000 M n arre 0.0 2017,20.0 with oil prices rising 20% to $44.24 per barrel and natural 00 00 gas 0.0 prices rising 22% to $2.72 per mcf. Spuds grew 137% to 199, Oil Refining S ud butM n arre 0.0 these were entirely new oil wells, and exploration activity is Most of the crude oil produced in Utah is refined in the 00 20.0 00 still well0.0 below pre-2015 levels. state. There are five refineries, all located within a few miles of S ud Oil 0.0 and200 gas development200 20 0 20 and20 2 production20 20 shed20 1,70020 jobs from20 each other in northern Salt Lake and southern Davis counties: 200 00 2008 to 2009, during the Great Recession. Most of the losses Marathon (formerly Andeavor, formerly Tesoro), Big West, 0.0 were in well drilling and other support activities. Employment Chevron, HollyFrontier, and Silver Eagle. They also process 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 200 20 0 20 20 2 20 20 20 20 20 then grew to a high of 10,643 jobs in 2014, when oil prices were crude from Canada, Wyoming, and Colorado. Inputs of crude peaking. The industry has since shed more than 2,600 jobs, again oil to Utah’s refineries grew 27% between 2008 and 2017, from 0 mostly in drilling and other support activities while extraction 53.2 million barrels to 67.5 million (see Figure 14). Refinery 200 200 20 0 20 20 2 20 20 20 20 20 employment has remained fairly steady (see Figure 13). capacity increased 17% over the same period, from 167,700 In 2017 the sector provided almost 8,000 direct jobs earning barrels per day to 196,830. Monthly utilization rates over the $420.7 million and produced over $1.3 billion in state GDP. period averaged 91% but ranged from a low of 61% in March
February 2020 I gardner.utah.edu 6 INFORMED DECISIONSTM Figure 15: Refinery Employment in Utah, 2008–2017 Table 3: Economic Impacts of Utah’s OIl Refining
00 Industry, 00.0 2017 (Dollar amounts in millions) 00.0 200 Impact 00.0 Direct Indirect and Induced Total 000 Employment 1,223 17,908 19,131 00.0 Earnings $205.7 $1,097.8 $1,303.5 00.0 00 State GDP $808.6 $2,486.3 $3,294.9
b Source: 00.0 Kem C. Gardner Policy Institute analysis of data from the Bureau of Labor 00 Statistics, Quarterly Census of Employment and Wages and Utah Geological Survey using the REMI 00.0 PI+ model 00 200.0 M n C n tant 20 D ar 200 00.0 0.0 0
200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
2 .0 2 200 2015 to a high of 103% in July of that Figure 16: Utah Coal Resources2 000 and Active Mines 00 year. Utah’s refineries were running at Goose Creek Coalfields 20.0 84 an average of 94% of capacity in 2017. 00 Economic reserves Grouse Creek 00 CACHE Prospective resources Increasing refinery capacity and in- 15 RICH Marginal resources 200 puts .0 are reflected in growing employ- Coal >4 ft thick County boundary BOX ELDER b 000 and <3000 ft deep Interstate highway ment. From 2008 through 2011, re- WEBER # 00 Lost Creek Active coal mine 0 20 40 finery employment was steady at just 00 MORGAN Data Source: UGS 0.0 80 miles 00 underM n Sh rt T n 1,000 jobs. Since 2011, the indus- DAVIS try has added 230 jobs (see Figure 15). 200 Henrys Fork DAGGETT .0 80 0 Coalville In 2017, Utah’s refineries provided 1,223 200 200 20 0 SUMMIT20 20 2 20 20 20 20 20 SALT jobs with $205.7 million in earnings and LAKE C a M n ng Su rt t t e WASATCH 0.0 TOOELE contributed $808.6 million to the state’s DUCHESNE Vernal GDP. This is200 one 200 of the20 0 highest-paying20 20 2 20 20 20 20 20 Tabby
UTAH sectors of the energy industry, with 2017 UINTAH Wasatch average earnings of $168,180—more Plateau 15 Dugout Canyon
0.0 Skyline CARBON than three times the statewide average. JUAB # # Book .0 Wales Mt. Pleasant Utah’s refineries generated economic Cliffs Sego Se er .2 0.0 impacts of over 19,000 jobs, $1.3 billion # # .0 in earnings, and $3.3 billion in state GDP SANPETE Lila Canyon 0.0 Castle Valley #3 and #4 (see Table 3). MILLARD 2 .0 Sterling SUFCO # Emery 20.0 # 70 14,417,284 M h M n .0 Salina Coal Emery short tons Canyon GRAND 0.0 EMERY Utah has an estimated 15.5 billion SEVIER La Sal short tons of recoverable coal, most E ery . .0 BEAVER 0.0 ane .0 WAYNE Henry Mtns. of which is constrained by land use 200 PIUTE 200 20 0 20 20 2 20 20 20 20 20 restrictions. Current economic fields San ete 0. F Fue Rene ab e 15 Carb n . Kaiparowits are in Carbon, Emery, Sevier, and Kane IRON Plateau counties, with prospective resources Harmony GARFIELD San Juan Coal in Garfield and Grand (see Figure 16). Hollow At 14.4 million short tons in 2017, Utah SAN JUAN # was the 11th largest coal producer in Alton the country. However, mine output was WASHINGTON Kolob KANE 40% lower than in 2008 and almost 47% Source: Utah Geological Survey; State of Utah, SGID
INFORMED DECISIONSTM 7 gardner.utah.edu I February 2020 00 00.0 00 00.0 00.0 200 00.0 200 00.0 00.0 000 000 00.0 00.0 00 00.0 00 00.0
b 00.0
b 00 00.0 00 00.0 00.0 00 200.0 00
M n C n tant 20 D ar 200.0
200 M n C n tant 20 D ar 00.0 200 00.0 0.0 0 0.0
0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20
200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 Figure 17: Coal Production in Utah, 2008–2017 Figure 19: Value of Coal Production in Utah, 2008–2017 00 2 .0 00.02 200 2 .0 2 2002 000 00 00.0 00.0 200 2 000 00 20.0 00.0 00.0 00 00 20020.0 000 00 00 00.0 00.0 00 200 000 .0
b 00.0 200 .0 00 00.0 000 b 000 b 00.0 00.0 00 00 00 0.0 00 00
b 00.0 0.0 00.0 00 00 M n Sh rt T n 00 00 M n Sh rt T n 00 00.0 200.0200 200 .0 M n C n tant 20 D ar 0 00 .0 200 200.0 00.00 200 200 20 0 20 20 2 20 20 20 20 20
M n C n tant 20 D ar 200 200 20 0 20 20 2 20 20 20 20 20 00.0 0.0 C a M n ng Su rt t t e 2000.0 C a M n ng Su rt t t e 0.00
200 200 20 0 20 20 2 20 20 20 20 20 0.0 200 200 20 0 20 20 2 20 20 20 20 20 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 Source: Utah Geological Survey
Source: Utah200 Geological200 Survey20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20
Figure2 .0 18: Utah Coal Production by County, 2017 Figure2 200 0.0 20: Coal Mining Employment in Utah, 2008–2017 0.0 2 000 .0 2 .0 2 200 .0 Se er .2 00 0.0 2 000 20.0 Se er .2 00 0.0 00 .0 00 .0 20.0 00 0.0 200 0.0 .0 002 .0 b 0002 .0 20.0
M n M h M n 200 .0 14,417,284 20.0 00 b 14,417,284 M h M n 000 .0 0.0 short tons .0 00 00 short tons 0.0 00 M n Sh rt T n 0.0 00 0.0 E ery . 200 .0 E ery . 00 .0 M n Sh rt T n .0 ane .0 0.00 0.0 200 200 20 0 20 20 2 20 20 20 20 20 ane .0 200 200 200 20 0 20 20 2 20 20 20 20 20 San ete 0. 200 200 20 0 20 20 2 20 20 20 20 20 .0 0 F Fue Rene ab e San ete 0. C a M n ngF Fue Su rtRene ab e t t e 0.0 Carb n . 200 200 20 0 20 20 2 20 20 20 20 20 Carb n . C a M n ng Su rt t t e
0.0 200 200 20 0 20 20 2 20 20 20 20 20 Source: Utah Geological Survey Source: Kem C. Gardner Policy Institute analysis of data from the Bureau of Economic Analysis and Bureau of Labor Statistics, Quarterly Census of Employment and Wages 200 200 20 0 20 20 2 20 20 20 20 20
0.0 below the state’s peak in 1996 (see Figure 17). The Sufco mine Coal mining employment consists of support activities .0 0.0 in Sevier County accounted for over 40% of the state’sSe er 2017 .2 coal as well 0.0 as the actual mining jobs. Support activities for coal .0 production, while those in Carbon County provided one-third mining .0 include exploration and services such as tunneling, Se er .2 0.0 of the total and Emery County mines produced one-fifth. Kane drilling, 0.0 blasting, and draining performed on a contract basis. .0 County, at 5%, and Sanpete, with 0.3%, produced the remainder Reflecting2 .0 the decline in output, Utah’s coal sector lost over 0.0 20.0 (see Figure 18).14,417,284 600M h M n 2 .0 jobs, 30%, from 2008 to 2016, recovering fewer than 50 in .0 In 2017, 64%sho ofr tthe ton coals produced in Utah was consumed in 2017.20.0 All of the losses have been in the mining industry, which 14,417,284 M h M n 0.0 Utah. One-fifth of the state’s coal was exported internationally, shed .0 865 jobs between 2008 and 2017. In contrast, contracted short tons E ery . .0 mostly to Asia. About one-tenth went to California, and the 0.0 ane .0 0.0 remainder went to New Mexico, Nevada, Arizona,E ery Idaho, . and Table .0 4: 200 Economic200 20 0Impacts20 of20 2 Utah’s20 Coal20 Mining20 20 20 San ete 0. ane .0 Industry,0.0 2017 F Fue Rene ab e Oregon. 20 2 20 20 20 20 20 Carb n . 200 200 20 0 20 The value of Utah’s coal production has declinedSan ete by 0. one- (Dollar amounts in millions)F Fue Rene ab e third since 2008, adjusting for inflation. The state’sCarb n 24.3 . million Impact Direct Indirect and Induced Total tons of coal in 2008 was worth $747.2 million in 2018 dollars. Employment 1,496 3,731 5,228 Production value grew to $829.5 million in 2009. However, by Earnings $157.9 $185.2 $343.0 2017 Utah’s shrinking coal production was worth $505.1 million State GDP $309.7 $302.4 $612.1 (see Figure 19). Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of Workforce Services and Utah Geological Survey using the REMI PI+ model
February 2020 I gardner.utah.edu 8 INFORMED DECISIONSTM 00 00.0
00.0 200 00.0 000 00.0
00 00.0
b 00.0 00 00.0
00 200.0 M n C n tant 20 D ar 200 00.0 0.0 0
200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20
2 .0 2 200 2 000 00 20.0 00 00 200 .0 b 000 00 0.0 00 00 M n Sh rt T n 200 .0 0 200 200 20 0 20 20 2 20 20 20 20 20 C a M n ng Su rt t t e 0.0 200 200 20 0 20 20 2 20 20 20 20 20 Figure 21: Net Utility-Scale Electricity Generation in Utah, Figure 22: Fuel Mix of Utility-Scale Electricity Generation in 2008–2017 Utah, 2017 . 0. 0.0 . 0. .0 . F Fue . 0. Se er .2 0.0 .2 .0 .2 0.2 0.0 S ar . . 0.0 2 .0 Re dent a M h ydr e e tr . . Se t r M h 20.0 . 14,417,284 M h M n .0 .0 nd 2. short tons .0 . 0.0 e ther a . 2. . E ery . .0 a 0.2 0.0 Other 0. ane .0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 Re dent a Se t r San ete 0. F Fue Rene ab e
Carb n . Note: Fossil fuels comprise coal, natural gas, petroleum liquids, and other gases. Renewables comprise utility-scale solar, hydroelectric, wind, geothermal, and most biomass. Other Note: Fossil fuels consist of coal, natural gas, petroleum liquids, and other gases. comprises cogeneration, waste heat, and non-biogenic municipal solid waste. Other comprises cogeneration, waste heat, and non-biogenic municipal solid waste. Source: U.S. Energy Information Administration Source: U.S. Energy Information Administration
000 00 support activities for coal mining more Figure 23: Identified Renewable Energy Resources in Utah 00 than quadrupled, adding almost 290 jobs 200 000 Solar Resource 9 84 Direct Normal Irradiance (see Figure 20). This implies an evolution (kWh/sq. meter/day) Potential geothermal 00 Areas with slope <3% resource area 000 CACHE RICH of the coal industry in the state, as larger Wind energy zone BOX ELDER 000 15 6.0 - 6.25 mining firms contract out more functions 6.25 - 6.5 County boundary 00 2 00 6.5 - 6.75 Interstate highway 6.75 - 7.0 to smaller support firms. WEBER b 7.0 - 7.25 Data Source: UGS, NREL, Utah 00 2 000 Renewable Energy Zones Task
Utah mines produced $493.1 million Th u and M h MORGAN 7.25 - 7.4 Force - Phase I and II 00 DAVIS 80 worth of coal in 2017 (in nominal 00 0 20 40 000 DAGGETT dollars), providing almost 1,500 direct SUMMIT miles 80 200 jobs with $157.9 million in earnings and 00 SALT 0 DUCHESNE contributing $309.7 million to the state’s ^ LAKE 0 Tooele Army Depot Wind - 3.5 MW ^ 200 200 20 0 WASATCH20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 GDP. Coal jobs are high paying, with 2017 Camp Williams Wind - 0.9 MW S ar ydr e e tr nd e ther a a F Fue Rene ab e average annual earnings of $105,500, TOOELE UTAH double the statewide average of $50,655. ^ Spanish Fork Wind Farm - 19 MW
Utah’s 2017 coal production generated UINTAH
JUAB .0 000 total economic impacts of 5,228 jobs, 15 CARBON $343.0 million in earnings, and $612.1 0.0 00
million in state GDP (see Table 4). 2 .0 00 MILLARD SANPETE 20.0 00 Electricity Generation 00 .0 70 Net utility-scale electricity generation Milford Wind Corridor 306 MW SEVIER GRAND M n M h EMERY 00 for all sectors was 20% lower in 2017 than 0.0 b ^ ^ 00 in 2008. This was due to a 29% reduction BEAVER ^ .0 Cove Fort Geohermal Power Plant - 25 MW WAYNE in fossil fuel generation from 45.5 to 32.3 Thermo Hot Springs PIUTE 00 Geothermal Power Plant - 14 MW 0.0Blundell Geothermal Power Plant - 34 MW million megawatthours (MWh). Over the ^ 200 200 20 0 20 20 2 20 20 20 20 20 200 same period, electricity generated from IRON C er a Re dent a Indu tr a Tran rtat n 00 ^ renewable sources increased fivefold GARFIELD 15 Latigo Wind Farm - 62 MW 0 from nearly 1.0 to 4.9 million MWh. 200 200 20 0 20 20 2 20 20 20 20 20 SAN JUAN Although it’s a small source, electricity WASHINGTON from cogeneration, waste heat recovery, KANE and non-biogenic municipal solid waste grew 23%, from 142,000 MWh in 2008 to 175,000 MWh in 2017. In 2008, fossil Source: Utah Geological Survey, MP-09-1, Utah Renewable Energy Zone Task Force Phase I Report: Renewable Energy Zone Resource Identification fuels accounted for almost 98% of total INFORMED DECISIONSTM 9 gardner.utah.edu I February 2020 Figure 24: Net Utility-Scale Electricity Generation in Utah from Renewable Sources, 2008–2017
000 00 000 00 000 2 00 2 000 00 Th u and M h 000 00 0 200 200 20 0 20 20 2 20 20 20 20 20 S ar ydr e e tr nd e ther a a
Fuel 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Solar – – – – 2 2 2 32 1,054 2,211 Hydroelectric 668 835 696 1,230 748 505 633 769 760 1,294 Wind 24 160 448 573 704 540 660 626 822 858 Geothermal 254 279 277 330 335 319 522 430 485 481 Biomass* 25 44 52 53 55 66 69 81 79 78
* Excludes non-biogenic municipal solid waste. Source: U.S. Energy Information Administration. electricity generation in Utah; by 2017 their share had shrunk to The residential and industrial sectors are similar in size, each 86% (see Figures 21 and 22). At 26.4 million MWh, Utah ranked averaging about 31% of total sales. The transportation sector 20th of 48 states for electricity generated from coal in 2017, is by far the smallest electricity consumer, at just 0.2% of sales. accounting for 2.2% of total coal-fired electricity in the country. Despite the increase in total electricity sales, per capita sales (all The state ranked 35th out of 49 states and the District of Columbia sectors) shrank by 7% between 2008 and 2017, from 10.6 MWh (all but Hawaii) for electricity generated from natural gas, with to 9.8 MWh. Per capita residential sales also fell by 7%, from 3.3 5.9 million MWh. Utah also has significant renewable resources. MWh to 3.1 MWh (see Figure 26). Figure 23 shows wind zones, potential geothermal resource areas, Total electric utility employment was steady between 2008 and areas with solar direct normal irradiance of at least 6.0 kWh/ and 2016 at about 1,200 jobs, then jumped to almost 1,300 in m2/day and terrain with less than a 3-degree slope. 2017. However, over this period, fossil fuel electric utilities shed a Utility-scale solar has seen the fastest growth, jumping net of 25 jobs while renewable utilities added 126 (see Figure 27). from just 1,619 MWh in 2012 to 2.2 million MWh in 2017, and While utilities are generally a “residential” or non-export sec- growing to 5.9% of total utility-scale electricity generation. In tor serving only the local market, Utah generates more electric- 2017, Utah was the fifth-largest producer of utility-scale solar ity than it consumes. Over the five-year period of 2013 to 2017, electricity, accounting for 4.1% of U.S. solar generation. Wind- Utah’s electric power sector exported an average of 18% of the generated electricity grew more than 35-fold from 23,900 electricity it generated. These exports generate economic im- MWh in 2008 to 858,000 MWh in 2017, representing 2.3% of pacts in the state. Since the data do not indicate the fuel source total generation. Hydroelectric and geothermal electricity of exported electricity, we assumed 18% of both fossil fuel generation both nearly doubled between 2008 and 2017, but electricity and renewable electricity was exported.10 Fossil fuel for different reasons. Hydro increased from generating 668,000 electricity generation provided 1,117 direct jobs with $165.6 MWh to nearly 1.3 million MWh—3.5% of total net generation. million in earnings and contributed $474.2 million to Utah’s However, hydro power is dependent on precipitation and GDP. Average annual earnings for these jobs were $148,200, al- the need for peak power, and historically has large swings in most triple the statewide average of $50,655. Exports of fossil generation. In comparison, geothermal added generation, fuel electricity produced indirect and induced impacts that led growing from 254,000 MWh in 2008 to 481,000 in 2017—1.3% to total economic impacts of 1,828 jobs, $208.4 million in earn- of total generation (see Figure 24). ings, and $539.3 million in state GDP (see Table 5). Electricity Total retail electricity sales grew by 8% between 2008 and generation from renewable sources (hydroelectric, solar, wind, 2013, from 28.2 million MWh to 30.5 million, and have since geothermal, and biomass) provided 173 direct jobs with $27.0 remained essentially flat despite continuing economic and million in earnings and contributed $73.5 million to the state’s population growth (see Figure 25). The commercial sector is the GDP. Average earnings were even higher for renewable elec- largest consumer, averaging 37% of total sales over the period. tricity generation at $156,500. Exports of renewable electricity
February 2020 I gardner.utah.edu 10 INFORMED DECISIONSTM . . 0. 0. . . 0. 0. . . F F Fue Fue . . 0. 0. .2 .2 .2 .2 0.2 0.2 S arS ar . . . . 0.0 0.0 Re dent a M h Re dent a M h Se t r M h ydr e e tr ydr e e tr . . . . Se t r M h . . nd nd 2. 2. .0 .0 . . e ther a e ther a . . .0 .0 a a 0.2 0.2 2. 2. . . OtherOther 0. 0. 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 Re dent a Re dent a Se t r Se t r
000 000 00 00 00 00 200 200 000 000 00 00 000 000 000 000 00 00 2 002 00 b b 2 0002 000 00 00 Th u and M h Th u and M h 00 00 00 00 000 000 200 00 00 200 0 0 00 200 200 200 200 20 020 0 20 20 20 220 2 20 20 20 20 20 20 20 20 20 20 200 200 200 200 20 020 0 20 20 20 220 2 20 20 20 20 20 20 20 20 20 20 S arS ar ydr e e tr ydr e e tr nd nd e ther a e ther a a a F F Fue Fue Rene ab e Rene ab e Figure 25: Retail Sales of Electricity in Utah by Sector, Figure 28: Mining and Oil and Gas Field Machinery 2008–2017 Manufacturing Employment, 2008–2017
.0 .0 000 000
0.0 0.0 00 00
2 .02 .0 00 00 00 20.020.0 00 00 00 .0 .0 M n M h M n M h 00 00 b 0.0 0.0 b 00 00 .0 .0 00 00 0.00.0 200 200 200 200 20 020 0 20 20 20 220 2 20 20 20 20 20 20 20 20 20 20 200200 C er a C er a Re dent a Re dent a Indu tr a Indu tr a Tran rtat nTran rtat n 00 00
Source: U.S. Energy Information Administration 00 200 200 200 200 20 020 0 20 20 20 220 2 20 20 20 20 20 20 20 20 20 20
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages Figure 26: Per Capita Retail Sales of Electricity in Utah, 2008–2017 . 0. Table 5: Economic Impacts of Utah’s Fossil Fuel Electricity . . 0. Generation, 2017 . F Fue . . 0. (Dollar amounts in millions) .2 0. . F Fue . .2 0.2 0. Impact Direct Indirect and Induced Total S ar . .2 . 0.0 Employment 1,117 711 1,828 .2 0.2 Re dent a M h ydr e e tr S ar . . . Se t r M h Earnings $165.6 $42.8 $208.4 . . 0.0 nd 2. .0 State GDP $474.2 $65.1 $539.3 Re dent a M h ydr e e tr . . . Se t r M h e ther a . .0 . Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of .0 nd 2. Workforce Services using the REMI PI+ model a 0.2 2. . e ther a . .0 Other 0. a 0.2 2. 200 200 20 0 20 20 2 20 20 20 20 20 . Re dent a Se t r Other 0.
200 200 20 0 20 20 2 20 20 20 20 20 Table 6: Economic Impacts of Utah’s Renewable Electricity Source: Kem C. Gardner Policy Institute analysis of data from the U.S. Energy Information Re dent a Se t r Administration; U.S. Census Bureau, Intercensal Population Estimates (2008–2009); Utah Generation, 2017 Population Committee, State Population Estimates (2010–2017) (Dollar amounts in millions)
Impact Direct Indirect and Induced Total 000 00 Figure 27: Electric Utility Employment in Utah, 2008–2017 Employment 173 111 283 00 000 200 00 Earnings $27.0 $6.5 $33.5 000 00 State GDP $73.5 $10.1 $83.6 00 000 200 000 Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of 000 Workforce Services using the REMI PI+ model 00 000 00 2 00 000 b 2 000 00 2 00 Th u and M h Table 7: Economic Impacts of Utah’s Mining and Oil and 00 b 2 000 00 Gas Field Machinery Manufacturing Industry, 2017
Th u and M h 000 00 00 (Dollar amounts in millions) 00 200 000 0 Impact Direct Indirect and Induced Total 00 2000 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 Employment 601 1,303 1,904 0 S ar ydr e e tr nd e ther a a 0 F Fue Rene ab e Earnings $51.7 $72.1 $123.8 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 State GDP $59.3 $111.3 $170.6 S ar ydr e e tr nd e ther a a F Fue Rene ab e Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of Source: Utah Department of Workforce Services and U.S. Bureau of Labor Statistics Workforce Services using the REMI PI+ model .0 000
0.0 .0 000 00 2 .0 0.0 INFORMED 00 DECISIONSTM 11 gardner.utah.edu I February 2020 00 20.02 .0 00 00 .020.0 00
M n M h 00
b 00 0.0 .0 00 M n M h 00 0.0 .0 b 00 0.0 .0 200 200 20 0 20 20 2 20 20 20 20 20 200 00 C er a 0.0 Re dent a Indu tr a Tran rtat n 00 200 200 20 0 20 20 2 20 20 20 20 20 200 C er a Re dent a Indu tr a Tran rtat n 000 200 200 20 0 20 20 2 20 20 20 20 20 0 200 200 20 0 20 20 2 20 20 20 20 20 0 000
2 00 0 2 000 0 00 b 0 b 000
20 00
0 0 200 200 20 0 20 20 2 20 20 20 20 20
0 200 200 20 0 20 20 2 20 20 20 20 20
Figure 29: Turbine and Transformer Manufacturing Figure 30: U3O8 Production and Uranium Mining Employment, 2008–2017 Establishments in Utah, 2008–2017
0 000 00 000
2 00 00 2 00 0 2 000 00 2 000 0 00 00 00 b b 0 b 000 00 000 E tab h ent Th u and und 20 200 00 2 00
000 0 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 0 0 e ne C n tru t n Natura a D tr but n e ne D tr but n 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 r du t n E tab h ent Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages Source: Utah Geological Survey and U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
00 000 200 Table 8: Economic Impacts of Utah’s Turbine, Transformer, Table 9: Economic Impacts of Utah’s Uranium Milling and 00 Solar Equipment Manufacturing Industry, 2017 Industry,2 00 2017 000 (Dollar amounts in millions) (Dollar amounts in millions) 00 2 000 00 Impact Direct Indirect and Induced Total Impact Direct Indirect and Induced Total 00 00 Employment 250 517 767 b Employment 46 25 71 00 b Earnings 00 $19.3 $29.1 $48.3 Earnings 000 $3.3 $1.6 $5.0
State GDP $31.5 $45.3 $76.9E tab h ent State GDP $3.8 $2.0 $5.8 00 E tab h ent Th u and und 200 2 002 Source: Kem C. Gardner Policy Institute analysis of data from the Utah Department of Source: Kem C. Gardner Policy Institute analysis of data from Energy Fuels using the REMI Workforce Services and the 2017 Solar Jobs Census using the REMI PI+ model PI+ model 200 00 0 200 200 20 0 20 20 2 20 20 20 20 20 0 0 0 200 200 20 0 20 20 2 20 20 20 20 20 e ne C n tru t n Natura a D tr but n e ne D tr but n produced200 indirect200 20 0 and20 induced20 2 20 impacts20 that20 led20 to 20 total eco- Turbine, Transformer, and Solar Equipment Manufacturing 0 etr eu u Stat n etr eu nomic impacts of 283 jobs, $33.5 million in earnings, and $83.6 This sector consists of turbine and turbine generator set Fue Dea er r du t n E tab h ent 200 200 20 0 20 20 2 20 20 20 20 20 and Ter na h e a er million in state GDP (see Table 6). The total impacts of the state’s units manufacturing, electric power and specialty transformer electricity generation sector in 2017 amounted to 2,111 jobs, manufacturing, and manufacturers of solar energy equipment. $241.9 million in earnings, and $622.8 million in state GDP. Data on turbine and transformer manufacturing employment 200 were obtained from the Utah Department of Workforce Services. Mining and Oil and Gas Field Machinery Manufacturing Solar equipment manufacturing employment is published by 000 While employment at manufacturers of mining and oil and the Solar Foundation and available only for 2015 through 2018. 00 gas field machinery shrank by one-third, from 912 jobs in 2008 Turbine and transformer manufacturing is a small industry in to 601 in 2017, the number of establishments in the state grew Utah. From 2008 to 2017 between six and eight establishments 00 from 18 to 26 over the same period (see Figure 28). The largest were b operating in the state. Employment in the industry grew of these are MegaDiamond, a Schlumberger company, and from 00 51 in 2008 to 58 in 2011, but has since fallen to 44 as of 2017 BoartE tab h ent 2 Longyear. Average earnings in this sector were $77,646 in (see Figure 29). Annual earnings across the two sectors averaged 2017, 53% higher than the statewide average of $50,655. $88,377200 in 2017, about 75% higher than the statewide average. The 601 mining machinery and oil and gas field machinery According to the Solar Foundation’s Solar Jobs Census, 0 manufacturing jobs in 2017 received $51.7 million in earnings. solar-related200 200 manufacturing20 0 20 jobs20 2 in20 Utah20 grew20 from20 just20 96 11 This0 activity produced total economic impacts of over 1,900 in 2015Fue to Dea er 226 in 2016, etr eu then u dipped Stat n to 206 in etr eu 2017. While jobs, $123.8200 200 million20 0 in earnings,20 20 2 and20 $170.620 million20 in20 state20 GDP there are no solar panelsand Ter na or wafers manufactured h e a er in the state, (see Table 7). other components such as mounting structure hardware are produced in Utah.
February 2020 I gardner.utah.edu 12 INFORMED DECISIONSTM Combining solar-related manufacturing with jobs building reached as high as six in 2009. However, since then, prices have turbines, turbine generator sets, and electric power and specialty fallen back to around $20 per pound. Mine output remained transformers, there were a total of 250 electric power–related above 500,000 pounds through 2012, then plummeted to just manufacturing jobs in 2017 with $19.3 million in earnings. This 55,000 pounds in 2013, and all uranium mining operations have activity produced total economic impacts of 767 jobs, $48.3 since ceased in the state (see Figure 30).12 Energy Fuels recently million in earnings, and $76.9 million in state GDP (see Table 8). started exploring again, but with emphasis on vanadium rather than uranium. The company’s White Mesa mill near Blanding is Uranium the only fully licensed and operating conventional uranium mill Between 1991 and 2006 no uranium was produced in Utah. in the U.S.13 With no mining taking place in the state, Energy Production restarted in 2007 and grew in response to a Fuels is currently only reprocessing uranium ore from its mine significant increase in uranium oxide (U3O8) spot prices. From in Arizona. The firm reported an average of 46 jobs at the mill a low of between $15 and $20 per pound in the early 2000s, in 2017; at an average wage of $67,000 this yields estimated spot prices for U3O8 jumped to $136 in June 2007. The state’s total earnings of $3.3 million. The mill produced total economic mines produced 201,000 pounds in 2007 and 621,000 pounds impacts of 71 jobs, $5.0 million in earnings, and $5.8 million in in 2008. The number of uranium mining establishments in Utah state GDP (see Table 9).
Other Energy Sectors
There are several other energy-related sectors in Utah which Figure 31: Electricity Distribution Employment, 2008–2017 0 000 do 0not generate economic impacts by exporting goods or 000 producing import substitutes. However, they do provide 2 00 0 2 00 important 0 services to consumers and other energy sectors in 2 000 the state. 2 000 0 0 00 b 00
Electricity Distribution b 0 b The 0 electricity distribution sector consists of electric power 000 b 000 transmission and distribution and power system construction. 20 00 The20 sector has been relatively stable over the last decade, with 00 estimated employment fluctuating between 2,570 and 2,742 0 0 0 200 200 20 0 20 20 2 20 20 20 20 20 (see 0 Figure 31).14 In 2017, the sector provided an estimated 2,600 200 200 20 0 20 20 2 20 20 20 20 20 jobs with $292.0 million in earnings, and contributed $851.8 Source: Utah Department of Workforce Services 0 0 million 200 to the200 state’s20 0 GDP.20 Average20 2 earnings20 20 were20 $112,233,20 20 well 200 200 20 0 20 20 2 20 20 20 20 20 over twice the statewide average of $50,655. Figure 32: Oil and Gas Product Distribution Employment, 2008–2017 Oil and Gas Product Distribution 00 000 The 00 oil and gas product distribution sector consists of utility 000 00 2 00 natural 00 gas distribution; crude oil, natural gas, and refinery 2 00 products pipeline distribution; oil and gas pipeline construction; 00 2 000 and 00 the Watco Price River Terminal. Employment in this sector 2 000 dipped 00 from 2,210 in 2008 to 1,764 in 2009, then climbed to a 00 00 b 00 high of 2,732 in 2011. It has since declined by 37%, due largely b 00 000 to losses 00 in the pipeline construction industry (see Figure 32). 000 E tab h ent E tab h ent Th u and und
OverTh u and und 200 the same period the number of establishments grew2 00 200 2 00 from 102 in 2008 to 138 in 2015. It has since shrunk to 127. In 00 00 0 2017 this sector provided approximately 1,710 jobs with $182.6 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 million0 in earnings and contributed an estimated $464.7 million0 0 0 e ne C n tru t n Natura a D tr but n e ne D tr but n 200 200 20 0 20 20 2 20 20 20 20 20 e ne C n tru t n Natura a D tr but n e ne D tr but n to the state’s200 200 GDP.20 0 Average20 earnings20 2 20 were20 $106,800,20 20 more20 than r du t n E tab h ent Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages double the statewide r du t n average. E tab h ent
INFORMED DECISIONSTM 13 gardner.utah.edu February 2020 200 I 200
000 000 00 00 00
b 00
b 00 00 E tab h ent
E tab h ent 2 2 200 200 0 0 200 200 20 0 20 20 2 20 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 0 etr eu u Stat n etr eu 0 Fue Dea er etr eu u Stat n etr eu 200 200 20 0 20 20 2 20 20 20 20 20 Fue Dea er and Ter na h e a er 200 200 20 0 20 20 2 20 20 20 20 20 and Ter na h e a er 0 000
2 00 0 2 000 0 00 b 0 b 000
20 00
0 0 200 200 20 0 20 20 2 20 20 20 20 20
0 200 200 20 0 20 20 2 20 20 20 20 20
200 00 000 00.0 0 0 00.0 0 00 2 00 200 00.0 0 0 00.0 0 0 0 0 00.0 0 00.0 00 2 000 0 0 20 00.0 0 0 00.0 0 00 00 00 00.0 0 b 00.0 0 20 0
Mega att 0 00.0 0 00 000 00 200.0 20 0 00.0 E tab h ent 0
Mega att 0 00.0 Th u and und
Re enue N na M n 0
0 e head r e N na D ar 200 2 00 200.0 20 0 0.0 0 20 00.0 200 200 20 0 20 20 2 20 20 20 20 20
Re enue N na M n 0 00 0 e head r e N na D ar 0 0 200 200 20 0 20 20 2 20 20 20 20 20 0.0 Re enue O e head r e 0 20 200 200 20 0 20 20 2 20 20 20 20 20 0 0 u u u u an an an an O t O t O t O t r r r e ne C n tru t n Natura a D tr but n e ne D tr but n r 200 200 20 0 20 20 2 20 20 20 20 20 0 Re enue O e head r e
r du t n E tab h ent Re dent a C er a Indu tr a u u u u an an an an O t O t O t O t r r r Figure 33: Energy Trade Employment and Establishments, Figure 35: r Estimated Small-Scale Solar Photovoltaic Re dent a C er a Indu tr a 2008–2017 Generation in Utah, 2014–2017 00.0 200 0.0 0.0 2 0.0 00.0 0.0 000 0.0 0.0 2 0.0 00 200.0 20.0 0.0 0.0 00 0.0200.0 20.0 nnua Change b 20.0 0.0 0.0
00 Th u and M h 00.0 nnua Change 0.0 E tab h ent 20.0 2 0.0 Th u and M h 00.0 200 0.0 0.0
0.0 200 200 200 200 200 20 20 20 20 0 0.00.0 200 200 20 0 20 20 2 20 20 20 20 20 20 20 20 20 O r e e Dr ng b E tra t n b 200 200 200 200 200 20 20 20 20 0 Fue Dea er etr eu u Stat n etr eu 0.0 200 200 20 0 20 20 2 20 20 20 20 20 and Ter na h e a er 20 Re dent a 20 C er a 20 Indu tr a 20 O r e e Dr ng b E tra t n b Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages Source: U.S. Energy Information Administration, Form EIA-861M Re dent a C er a Indu tr a
Figure 34: Estimated Small-Scale Solar Photovoltaic Figure 000 36: Solar Jobs in Utah, 2015–2017 0. Capacity in Utah, 2014–2017 000 000 0. 0. 200 00.0 0 0 00.0 000 000 0 0. 0. 0 00.0 0 000 000 0. 0. 0 0 00.0 b 20 000 0 0. 0. 00.0 000 0 00 b 00.02 000 0. 0. 000 0
Mega att 0 200.0 0. 0 000 20 0.
2 000 Change . Nat na erage r e 00.0
Re enue N na M n 0 0 e head r e N na D ar 0.2 0. 000 0.00 0 20 200 200 20 20 0 20 20 2 20 20 20 20 20 20 20 Change . Nat na erage r e 0.2 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 0 In ta at n0 Sa e Re enue Manu a tur ngO e head r e t r e Other D tr but n20 20 De e ent20 Earn ng State D E y ent 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 u u u u an an an an O t O t O t O t r r r r In ta at n Sa e Manu a tur ng r e t Other D tr but n De e ent Earn ng State D E y ent Re dent a C er a Indu tr a
Source: U.S. Energy Information Administration, Form EIA-861M Source: The Solar Foundation, Solar Jobs Census
00.0 0.0
The energy trade sector consists of petroleum bulk stations Solar 0.0 and2 0.0 terminals, other petroleum wholesalers, and retail fuel In 2017, Utah had the 14th largest small-scale photovoltaic 0.0 dealers. Employment dropped from a pre-recession high of solar capacity and generation in the nation. The Energy 200.0 20.0 1,017 jobs in 2008 to 904 in 2009, then grew to 978 in 2012. Information Administration estimates small-scale (<1 MW) 0.0 Energy 0.0 trade jobs have since shrunk to just over 800. Petroleum photovoltaic solar capacity in Utah reached 190.6 MW as of nnua Change wholesalers have seen the largest losses, shedding over 200 jobs December 20.0 2017 and generated 289,373 MWh that year (see
Th u and M h 00.0 between 2008 and 2017. Petroleum bulk stations and terminals Figures 0.0 34 and 35). This represents a 12-fold increase in capacity lost 35 jobs over the same period, while fuel dealers saw a net since 2014, the earliest available data, and an almost eightfold 0.0 gain 0.0 of 32 jobs (see Figure 33). Together, these three subsectors increase in generation.15 Utah went from representing 0.3% of
provided 809 jobs in 2017 with an estimated $57.8 million in the nation’s small-scale photovoltaic 200 200 capacity200 200 200 and20 generation20 20 20 0.0 earnings and 20 contributed $91.920 million to20 the state’s GDP.20 in 2014O to r e 1.2% of both e capacity Dr ng b and generationE tra t n in 2017. b The most rapid growth was in the residential market, where Re dent a C er a Indu tr a capacity grew from 6.3 MW in January 2014 to 147.2 MW in December 2017, and generation grew from 15,825 MWh in
000 0.
TM February 000 2020 I gardner.utah.edu 14 0. INFORMED DECISIONS
000 0.
000 0. b 000 0.
2 000 0.
000 0. Change . Nat na erage r e 0.2 0 20 20 20 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 In ta at n Sa e Manu a tur ng r e t Other D tr but n De e ent Earn ng State D E y ent 2014 to 218,494 MWh in 2017. More than three-quarters (76%) Table 10: Incremental Energy Efficiency Savings, 2017 of 2017 small-scale photovoltaic generation in Utah came from Energy Average Value of residential installations, one-fifth (22%) came from commercial Fuel Efficiency Savings Energy Price Energy Saved installations, and the remaining 3% was from industrial. Electricity 254,907 MWh 8.6¢/kWh $21,922,002 Solar jobs are present in industries ranging from engineers Natural Gas 890,000 MMBtu $7.63/mcf $6,519,033 to electrical contractors to equipment wholesalers, but none of Note: Savings amounts represent new energy savings from programs implemented in 2017. these sectors uniquely capture solar employees. To be included, Source: Kem C. Gardner Policy Institute analysis of data from the American Council for an Energy Efficient Economy, 2018 State Energy Efficiency Scorecard, and the Energy an employee must spend at least 50% of his or her time on solar- Information Administration related work. The Solar Foundation’s 2017 National Solar Jobs Census reported 6,170 solar jobs in Utah, a 40% increase from employees in 2017 spent the majority of their workday in 2016 (see Figure 36). This placed the state 12th for total solar energy efficiency activities. These activities include working jobs and fourth for the number of solar jobs per capita. 16 These with Energy Star appliances and efficient lighting; high- represent both residential rooftop solar and utility-scale solar, efficiency heating, ventilation, and air conditioning equipment, each of which requires very different job skills. Nearly three- including renewable heating and cooling systems; and building quarters of the state’s solar jobs, 4,553, were in installation, materials and insulation that exceed building code standards. which consists mostly of electricians and construction Conducting energy audits and building certifications and workers. The next largest component was wholesale trade and providing related software services are also included. Energy distribution, accounting for 811 jobs. There were 243 project efficiency employment ranges across such industries as development jobs, including design, engineering, permitting, construction, professional services, sales and distribution, and and associated accounting, management, and administration. manufacturing. Within the professional services sector, a number Manufacturing of mounting structure hardware, monitoring of Utah companies provide home automation equipment to systems, inverters, or other components accounted for 206 minimize energy usage. The energy efficiency employment data jobs, which are also included in the turbine, transformer, and do not include accompanying wages or earnings. Nor do the solar equipment sector discussed above. Finally, there were available data allow us to make our own estimates. 357 “other” jobs, covering research and development, training, According to The 2018 State Energy Efficiency Scorecard, Utah finance, consulting, law, communications, and nonprofit electricity users saved 254,907 MWh of electricity in 2017 due organizations. The total count includes jobs at solar electricity to the implementation of new energy efficiency measures. generation plants, some of which are included in the renewable At an average price of 8.6 cents per kWh, this amounts to electricity generation sector discussed above. savings of $21.9 million. Similarly, incremental natural gas energy efficiency savings of 890,000 MMBtu were worth an Energy Efficiency estimated $6.5 million (see Table 10).17 Note that these savings Energy efficiency employment is defined as the production do not represent a full cost-benefit accounting as they do not or installation of energy efficiency products certified by the subtract the cost of achieving these savings, such as subsidies Environmental Protection Agency’s Energy Star program. paid by utilities to customers for purchasing energy-efficient BW Research, the consulting firm retained to quantify appliances or the higher cost of energy-efficient appliances and energy efficiency jobs in each state, advises that 14,626 Utah LED lighting not covered by rebates.
INFORMED DECISIONSTM 15 gardner.utah.edu I February 2020 Fiscal Impacts
In addition to jobs, earnings, and GDP, Utah’s energy industry Table 11: Direct Energy-Related State and County generates a significant amount of revenue for state and local Revenues, 2017 governments. Approximately half of the revenues from energy Source Amount production on federal lands is disbursed to the state. Energy Property Taxes $188,680,880 leases on the state’s trust lands also generate royalties and other Sales Taxes $163,114,451 revenues. The state charges an oil and gas severance tax, an Federal Mineral Lease Disbursements $74,126,035 oil and gas conservation fee, and an environmental assurance SITLA Energy-Related Revenues $35,159,282 fee on petroleum products. Counties levy property taxes on Oil and Gas Severance Tax and Conservation Fee $26,002,488 various energy and natural resource properties. The state Environmental Assurance Fee $4,988,134 and local jurisdictions collect sales taxes on taxable business Total $492,071,270 investments made by energy companies. Most municipalities Note: Sales taxes comprise estimated state and local taxes collected on energy-related impose an energy sales and use tax. In calendar year 2017 these business investment and municipal energy sales and use taxes. Oil and gas severance tax and conservation fee includes environmental assurance fee revenues. All data are for revenue sources totaled $492.1 million (see Table 11). Property calendar year 2017. taxes and sales taxes accounted for more than two-thirds of the Source: U.S. Department of the Interior, Office of Natural Resources Revenue; Utah State Tax Commission; State of Utah School and Institutional Trust Lands Administration total and federal mineral lease disbursements made up about one-seventh. Figure 37: Total State and Local Energy-Related Revenues Many energy-related government revenues are based on the and Average Crude Oil Wellhead Prices, 2008–2017 value of resource production. Federal oil and gas royalties are assessed200 at 6.9 to 19.1% of production value, depending on the 00.0 0 product; 0 SITLA charges 12.5% to 16-2/3% of production value 00.0 0 for 0 oil and gas extraction from state trust lands; the state oil and 00.0 0 0 0 gas severance tax is 3% or 5% of production value, depending 00.0 on 20 price; and the oil and gas conservation fee is 0.2% of the 0 00.0 value 00 of oil or gas. As a result, a significant portion of state 0 00.0 0 andMega att 0 local energy-related revenue is sensitive to changes in 200.0 energy 0 prices. From 2008 through 2014, federal mineral lease 20 00.0
Re enue N na M n 0 disbursements, 0 SITLA revenues, and the oil and gas severance e head r e N na D ar 0.0 0 tax20 and conservation fee accounted for 46% to 56% of total 200 200 20 0 20 20 2 20 20 20 20 20 energy-related0 revenues (see Table 12). Over this same period, Re enue O e head r e crude oil wellhead prices averaged over $75 per barrel and Source: U.S. Department of the Interior, Office of Natural Resources Revenue; Utah State u u u u an an an an O t O t O t O t r r r natural gas wellhead prices averaged over $4 per mcf. r From Tax Commission; State of Utah School and Institutional Trust Lands Administration; and Re dent a C er a Indu tr a Utah Geological Survey 2015 through 2017 these revenue sources decreased to about one-quarter of total energy revenues while oil and gas prices nearly halved. Over the last decade, total energy-related state led to an estimated $236.2 million in state income and sales tax 00.0 and local revenues peaked at $711.3 million in 2014, measured revenues 0.0 and $112.7 million in county sales and property taxes 0.0 in nominal2 0.0 dollars. Since then, revenues decreased by 30% to (in addition to those noted above) in 2017 (see Table 13). On $492.1 million in 2017 (see Figure 37). the 0.0 expenditure side, the population supported by this activity
In200.0 addition to taxes, fees, royalties, and other energy-related required20.0 state public education, higher education, and non- revenues, the direct, indirect, and induced income, output and education operating expenditures of $96.3 million, plus $22.2 0.0 employment 0.0 generated by the energy industry creates income, million of county-level public education and non-education nnua Change sales, and property taxes for the state and local jurisdictions. The expenditures. 20.0 The net effect amounted to $139.9 million in
Th u and M h 00.0 total economic activity resulting from Utah’s energy industry state 0.0 revenues and $90.5 million in local revenues.
0.0 0.0 200 200 200 200 200 20 20 20 20 0.0 20 20 20 20 O r e e Dr ng b E tra t n b
Re dent a C er a Indu tr a
February 2020 gardner.utah.edu 16 INFORMED DECISIONSTM 000 I 0.
000 0.
000 0.
000 0. b 000 0.
2 000 0.
000 0. Change . Nat na erage r e 0.2 0 20 20 20 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 In ta at n Sa e Manu a tur ng r e t Other D tr but n De e ent Earn ng State D E y ent Table 12: Direct Energy-Related State and County Revenues, 2008–2017 (Thousands of nominal dollars)
Source 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Property Taxes $119,736.8 $128,954.2 $147,040.4 $164,277.2 $185,020.2 $188,889.1 $199,002.0 $203,492.9 $190,078.2 $188,680.9 Power $52,259.2 $59,055.3 $70,097.7 $76,285.9 $82,422.5 $88,371.1 $87,460.0 $96,775.4 $94,289.2 $93,282.9 Pipeline and Gas Utilities $20,372.4 $22,992.3 $29,253.4 $35,031.6 $41,631.2 $43,223.9 $41,623.1 $43,747.4 $44,725.6 $44,400.4 O&G Extraction $42,902.5 $42,582.1 $43,979.0 $48,652.3 $56,730.2 $52,604.9 $63,973.6 $57,735.0 $45,448.7 $46,821.2 Coal Mines $4,202.8 $4,324.4 $3,710.4 $4,307.5 $4,236.4 $4,689.2 $5,945.2 $5,235.1 $5,152.7 $3,741.7 Uranium $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $462.1 $434.6 Sales Tax on Energy-Related $147,064.7 $136,383.3 $151,295.3 $164,314.3 $157,121.1 $168,483.1 $166,334.4 $157,750.2 $157,848.8 $156,977.8 Business Investment Federal Mineral Lease $162,483.0 $132,151.4 $144,382.5 $153,182.0 $157,839.3 $146,256.2 $157,033.0 $104,125.3 $69,306.5 $74,126.0 Disbursements SITLA $87,881.1 $85,232.8 $72,269.7 $73,275.6 $71,033.0 $82,661.8 $82,131.0 $49,006.3 $32,027.6 $35,159.3 Oil and Gas $73,212.0 $67,873.3 $55,958.8 $59,537.9 $62,707.0 $77,451.5 $76,905.7 $44,862.0 $28,565.3 $32,334.9 Coal $13,661.2 $16,393.1 $14,812.9 $12,203.4 $6,475.0 $2,871.7 $3,282.7 $2,644.6 $1,873.1 $1,319.0 Oil Shale -$92.5 -$139.3 $281.0 $281.1 $663.6 $942.5 $465.7 $93.0 $113.6 $109.0 Tar Sands $402.9 $285.1 $399.4 $571.6 $462.8 $547.2 $666.5 $519.7 $333.6 $184.2 Uranium $442.9 $340.8 $298.5 $331.7 $339.3 $280.1 $123.6 $158.0 $287.8 $210.2 Geothermal $218.5 $370.2 $400.0 $257.7 $232.1 $293.7 $329.9 $333.9 $340.0 $352.7 Solar $0.0 $0.0 $0.0 $0.0 $45.1 $81.2 $97.0 $103.6 $167.3 $296.3 Wind $36.2 $86.1 $78.0 $57.3 $58.6 $59.3 $62.6 $66.0 $66.6 $67.4 Western Energy Hub $0.0 $23.6 $41.1 $35.0 $49.5 $134.7 $197.3 $225.5 $280.3 $285.7 (salt cavern storage) Oil and Gas Severance Tax $88,210.7 $83,143.0 $65,603.8 $71,102.2 $68,220.3 $80,294.1 $88,757.3 $52,990.5 $22,047.9 $22,599.7 Oil and Gas Conservation Fee $6,122.1 $5,513.1 $4,987.8 $6,108.7 $6,151.7 $6,846.0 $7,274.7 $4,924.6 $3,229.6 $3,402.8 Environmental Assurance Fee $4,869.8 $4,414.7 $4,527.4 $4,574.1 $4,774.5 $4,897.0 $5,241.4 $5,842.8 $5,346.0 $4,988.1 Municipal Energy Sales $4,670.4 $4,456.7 $4,036.2 $3,985.1 $4,115.3 $5,065.3 $5,542.4 $5,061.1 $5,555.6 $6,136.7 and Use Tax Total $621,038 .7 $580,249 .0 $594,143 .1 $640,819 .3 $654,275 .4 $683,392 .6 $711,316 .1 $583,193 .8 $485,440 .2 $492,071 .3 Note: Years are calendar years. Source: U.S. Department of the Interior, Office of Natural Resources Revenue; Utah State Tax Commission; State of Utah School and Institutional Trust Lands Administration.
Table 13: Additional Energy Industry Estimated State and Local Fiscal Impacts, 2017 (Millions)
Estimated State Fiscal Impacts Amount Estimated Local Fiscal Impacts Amount Personal Income Tax Revenues $103.8 Local Sales Tax Revenues2 $15.8 Corporate Income Tax Revenues $19.9 Property Tax Revenues $96.9 State Sales Tax Revenues1 $112.6 Total Local Revenues $112 .7 Total State Revenues $236 .2 County Expenditures $12.8 State Non-Education Expenditures $49.8 Countywide Public Education Expenditures $9.4 State Public Education Expenditures $25.7 Total Local Operating Expenditures $22 2. State Higher-Education Expenditures $20.8 Net Local Operating Revenue $90 5. Total State Operating Expenditures $96 .3 Net State Operating Revenue $139 .9 1. Sales and gross receipts taxes. 2. Local sales tax revenues consist of total general sales and use taxes and the tourism restaurant tax. Source: Kem C. Gardner Policy Institute analysis using the REMI PI+ model and Gardner Institute fiscal model
INFORMED DECISIONSTM 17 gardner.utah.edu I February 2020 Energy Prices
As noted above, because many of the state energy-related have a correlation coefficient of 0.56, whereas the coefficient on revenue sources are based on the value of production, revenues changes in prices and extraction jobs is only 0.22. are200 affected by swings in energy prices. Energy prices also affect Retail 00.0 energy prices for most consumers in Utah are below 0 the 0 state through the prices that businesses and households national 00.0 averages. Prices range from 6% to 23% lower than 0 the pay 0 and through changes in direct energy-sector jobs in Utah national 00.0 average for all but industrial users of natural gas 0 and 0 0 that result from changes in energy prices. In addition, our low transportation 00.0 users of electricity, whose prices are 22% and 20 0 retail energy prices may induce energy-intensive firms to locate just 00.0 over 1% higher than average, respectively (see Table 14). 00 0 facilities here, creating new jobs. At 00.0current consumption levels, if Utahns were paying national 0
Mega att 0 Oil and gas drilling jobs are the most responsive to changes average 200.0 prices they would pay, on net, $578.4 million more for 0 20 in oil and gas prices (see, for example, Figures 11 and 12 above). electricity 00.0 and natural gas.
Re enue N na M n 0
0 e head r e N na D ar High prices spur new exploration activity, while low prices 0.0 0 discourage20 investment in new wells. Oil and gas extraction jobs 200 200 20 0 20 20 2 20 20 20 20 20 0 exhibit almost no response to price changes because once a Table 14: Five-YearRe enue Average EnergyO Prices, e head U r e.S . vs . Utah u u u well is drilled and u producing, ongoing operating costs are low an an an an O t O t O t O t 5-Year r r r r Estimated Average Price (see Figure 38).Re dent a However, thisC er a masks the fact thatIndu tr a operators can Utah vs . U .S . Savings shut in wells when prices are low, and the steep production Sector/Product Utah U .S . Differential in 2017 declines of horizontal wells require companies to continually Residential drill new wells to keep production flowing. Running simple Electricity (per kWh) 10.8¢ 12.5¢ –16.5% $184,513,400 00.0 0.0 Natural Gas (per mcf) $9.18 $10.53 –14.6% $124,062,000 200 regression 00.0 analyses of the change in oil and gas drilling jobs 0 as Commercial 0.0 0 a function 00.02 0.0 of the change in nominal wellhead oil prices, and 0 the 0.0 Electricity (per kWh) 8.6¢ 10.5¢ –23.0% $237,127,800 0 change 00.0 in oil and gas extraction jobs as a function of changes 0 Natural Gas (per mcf) $7.53 $8.01 –6.4% $19,806,720 0 in nominal200.0 wellhead prices supports these observations. 018 For 20.0 00.0 Industrial 0 20 every 10% change in the price of oil, drilling jobs change by 6% 0.0 00.0 0.0 Electricity (per kWh) 6.1¢ 6.9¢ –12.9% $69,622,500
00 (in the same direction) but extraction jobs change by only 0 1%— nnua Change 00.0 20.0 0 Natural Gas (per mcf) $5.61 $4.36 22.3% –$56,409,870
Mega att 0 and could even move in the opposite direction. Correlation
Th u and M h 00.0 200.0 Transportation* 0.0 0 measures the degree to which two variables move together. 20 00.0 Electricity (per kWh) 10.2¢ 10.1¢ 1.4% –$324,800
Re enue N na M n 0 0 Correlation 0.0 coefficients range from 1, when the two variables e head r e N na D ar 0.0 0.0 0 All Sectors/All Products $578,397,750 20
are perfectly in synch, to –1, when they are perfectly out of 200 200 200 200 200 20 20 20 20 200 200 20 0 20 20 2 20 20 20 20 20 * State-level natural gas prices for the transportation sector are available only through 2012. 0 synch.0.0 An analysis ofRe enue changes in oil prices,O e head well-drilling r e jobs, and Source: Kem C. Gardner Policy Institute analysis of U.S. Energy Information Administration 20 20 20 20 O r e e Dr ng b E tra t n b extraction jobs shows that changes in prices and drilling jobs data u u u u an an an an O t O t O t O t r r r r Re dent a C er a Indu tr a Re dent a C er a Indu tr a Figure 38: Annual Change in Nominal Crude Oil Wellhead Figure 39: Effects of Utah’s Low Energy Prices Price and Oil and Gas Jobs, 1991–2017 000 0. 00.0 0.0 000 0. 0.0 2 0.0 000 0. 0.0 0. 200.0 20.0 000 b 0.0 0. 0.0 000 nnua Change 20.0 2 000 0.
Th u and M h 00.0 0.0 000 0. 0.0 Change . Nat na erage r e 0.0 0.2 0
20 200 20 200 200 200 200 20 20 20 20 20
0.0 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 In ta at nO r e Sa e e Manu a tur ng Dr ng b r e t E tra t nOther b D tr but n De e ent Earn ng State D E y ent Re dent a C er a Indu tr a Source: Kem C. Gardner Policy Institute analysis of data from the Utah Geological Survey and the Bureau of Labor Statistics, Quarterly Census of Employment and Wages Source: Kem C. Gardner Policy Institute analysis of U.S. Energy Information Administration data using the REMI PI+ model
000 February0. 2020 I gardner.utah.edu 18 INFORMED DECISIONSTM 000 0.
000 0.
000 0. b 000 0.
2 000 0.
000 0. Change . Nat na erage r e 0.2 0 20 20 20 20 20 202 202 202 202 202 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 In ta at n Sa e Manu a tur ng r e t Other D tr but n De e ent Earn ng State D E y ent Figure 40: Changes in Value Added by Industry Due to Lower Energy Prices
Total 0.4% Forestry, shing, and hunting Mining Utilities Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Information Finance and insurance Real estate and rental Prof., sci., tech. services Management of companies Admin., support, waste mgmt Educational services Health care and social assistance Arts, entertainment, and recreation Accommodation and food services Other services State and Local Government 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%
Source: Kem C. Gardner Policy Institute analysis of U.S. Energy Information Administration data using the REMI PI+ model
To examine the effects of energy prices on the state’s economy, Comparing impacts on value added by industry, effects range we entered the percentage difference between national average from 0.2% in the finance and insurance sector to 3.2% in the prices and Utah prices for each fuel (electricity and natural utilities sector (see Figure 40). Since most utilities are regulated gas) and end user (residential, commercial, and industrial). We monopolies, their profit margins are fixed. The large advantages entered the differences for every year out to 2060 and compared of lower prices to the utility sector then likely result from the results to REMI’s baseline forecast, which incorporates Utah’s greater electricity and natural gas consumption compared with existing prices. After an initial adjustment period, baseline state that under the higher national average prices. Besides utilities, GDP averages about 0.4% larger than it would have been under other sectors with the largest effects include accommodation national average prices, employment is about 0.3% higher, and and food services (0.66%), construction (0.55%), and state and earnings average 0.7% higher (see Figure 39). local government (0.50%).
INFORMED DECISIONSTM 19 gardner.utah.edu I February 2020 Industry SWOT Analyses
The Gardner Institute conducted strengths-weaknesses- Regarding natural gas, future production growth is also opportunities-threats (SWOT) analyses of Utah’s main energy problematic. The United States is awash in natural gas supplies sectors: oil and gas, mineral fuels, wind, solar, and geothermal. due to prolific shale gas resource in the Marcellus (Pennsylvania) These analyses evaluated the internal strengths and weaknesses and other shale basins, plus the associated gas production in the of each sector as well as external opportunities and threats. Permian Basin (Texas) and Bakken Formation (North Dakota). The resulting overhang of natural gas volumes has driven Oil and Gas prices to levels that are uneconomic for Uinta Basin operators to Utah has abundant oil and gas resources to meet state expand production. At such low price levels, supplying natural demands; however, Utah faces a decision about becoming a gas to a West Coast liquefaction plant for deliveries to the Asian player in the national and international markets. In parts of the markets is attractive to stakeholders in the Western States and Uinta Basin, hydraulic fracturing and horizontal drilling have Tribal Nations Natural Gas Initiative. Opening a new market increased well production rates to match prolific basins in Texas for sales of liquefied natural gas (LNG) could raise natural gas and North Dakota. However, delivering Uinta Basin waxy crude prices, increasing exploration and drilling activities. to national and international markets has always been difficult because the crude congeals at ambient air temperatures. Since Mineral Fuels the state’s crude oil production growth has been constrained by Mineral fuels consist of coal and uranium. Utah is the 11th Salt Lake City refinery capacity, Utah’s crude oil sector growth largest coal producer in the United States; however, domestic is dependent on expanding rail infrastructure to export Uinta markets have dwindled over the last decade due to environmental Basin crude oils to the Gulf Coast and West Coast. concerns and fuel switching by power plants to natural gas. In
Figure 41: Economic SWOT Analysis of Utah’s Oil and Gas Sector
Strengths Weaknesses • Utah has a favorable regulatory environment that encourages oil and gas • Uinta Basin waxy crude has a high paraffin content that solidifies at ambient development temperatures making handling more difficult and expensive • Utah is the 11th largest producer of oil and 13th largest producer of • The Salt Lake City refineries’ aggregate fluid catalytic cracking capacity caps their natural gas in the U.S. receipts of Utah waxy crude at 90,000 barrels per day, although the Uinta Basin is • Uinta Basin waxy crude oil has positive properties such as high API capable of producing more waxy crude than current production levels gravity, low sulfur, and low metals content • Truck traffic on US 40 has increased the wear and tear on the road and increased • Uinta Basin waxy crude oil’s high paraffin content makes it an ideal base the risk of automobile accidents stock for lubricants used in automobiles • The number of oil and gas jobs can be volatile due to commodity price • Horizontal drilling in the Uinta Basin has proven very successful and has fluctuations improved economics of production • Uinta Basin waxy crude sells to Utah refiners at a discount to the benchmark • Oil and gas jobs pay higher than average wages crude, West Texas Intermediate (WTI), although the waxy crude could be valued • Large unconventional oil shale and oil sands resources exist in Utah higher by out-of-state refiners that produce lubricants • Upside potential exists to increase production levels in the Paradox Basin. • Federal ownership of a majority of Utah’s land increases the difficulty of developing oil and gas
Opportunities Threats • The production of waxy crude from the Uinta Basin could expand with • The Williston (Bakken - North Dakota) and Permian (Texas) basins have export the construction of rail infrastructure, allowing exports to national and commissions identifying potential outlets for their crude oil exports to national international markets and international markets • With a newly constructed rail infrastructure for increased Uinta Basin • Political differences in Oregon pose resistance to building an LNG terminal in waxy crude production, profits could increase to $126 million per Jordan Cove annum, $92 million per annum more could be collected in state and local • Increased pressure from climate change activists may decrease demand for fossil revenues, and 860 full-time-equivalent jobs per annum could be created fuels and sustained • Increasing market share of electric vehicles (EV’s) may decrease demand for • Abundant supplies of natural gas plus low price levels make a liquefied motor gasoline and diesel fuel. natural gas (LNG) terminal plant located on the West Coast economically attractive allowing exports to international markets • The Ruby Pipeline, constructed in 2010 has spare capacity to transport Uinta Basin natural gas to the West Coast • With the right training, Utah’s young, agile population can fill key industry positions • New enhanced oil recovery (EOR) techniques are poised to increase crude oil production levels. Source: Kem C. Gardner Policy Institute; U.S. Energy Information Administration; U.S. Geological Survey; Utah Geological Survey; HDR, Uinta Basin Energy and Transportation Study
February 2020 I gardner.utah.edu 20 INFORMED DECISIONSTM Figure 42: Economic SWOT Analysis of Utah’s Mineral Fuels Sector
Strengths Weaknesses • Utah is the 11th largest coal producer in the U.S. • Demand for Utah coal in U.S. domestic markets has declined since the early • Utah coal exports increased to 20% of total state production since the early 2000s 2000s • The use of uranium as a fuel source in the U.S. has declined in recent years
• Utah’s bituminous coal has a higher heat content (11,400–12,100 BTU/lb.) than • Utah’s uranium ores have an average concentration of only 0.4% U3O8, where-
the sub-bituminous coal from Wyoming, the nation’s largest coal producer as Canadian uranium ores have 20% U3O8 concentration • The U.S. is the world’s largest consumer of uranium, principally as a fuel source for nuclear power plants and the Navy’s vessel fleet • Utah has the only operating uranium mill in the U.S.
Opportunities Threats • Southeast Asia is projected to have a continued large demand for coal • The number of coal-fired power plants in the U.S. has been decreasing. Utah’s • The Utah Office of Energy Development has signed an agreement with the coal deliveries to other states has decreased by almost 90% in the last 15 years Port of Ensenada in Baja California, Mexico for transportation of Utah’s natural • The Los Angeles Department of Water and Power, the chief shareholder in the resources Intermountain Power Project, will cease accepting coal-fired electricity in 2025; • Utah has large recoverable resources of coal, one of the lowest-cost conven- this event will further diminish coal demand within Utah tional fuels • Low natural gas prices make natural gas–fired electricity a better option • With the right training, Utah’s young, agile population can fill key industry • Future greenhouse gas emissions regulations may threaten Utah’s existing coal- positions fired power plants • Associated vanadium can make Utah’s uranium ore more attractive • Opposition to allowing coal exports through California port facilities • The carbon capture sequestration and utilization (CCSU) pilot project at the • Declining costs of renewable electricity generation coal-fired Hunter Power Plant may become commercial, eliminating the need • Lack of a long-term nuclear waste storage solution impedes the building of any for alternative feedstocks new nuclear plants
Source: Kem C. Gardner Policy Institute; Utah Geological Survey, circular 124, Utah Mining 2017
Figure 43: Economic SWOT Analysis of Utah’s Wind Sector
Strengths Weaknesses • Wind-generated electricity accounted for 2.3% of Utah’s total electricity • Intermittent nature of wind energy generated in 2017 • The complex topography of Utah makes wind resources in the state marginal • The $125 million investment in the Latigo Wind Park (62 MW) is the largest compared with other states like Wyoming private investment in San Juan County • Storage costs for intermittent resources have not been demonstrated to be • Beaver and Millard county property tax revenues on the 12,000-acre footprint cost effective in Utah’s low energy cost environment of the Milford Wind Project (306 MW) rose from $680 to $3,100,000 after the • Concerns about hub height and potential hazards to wildlife have delayed development of the $360 million project wind projects from being commissioned on schedule
Opportunities Threats • As the hub heights on windmills (i.e. the height of the rotor above ground) • Lack of available transmission capacity from remote sites in Utah could deter increase from 80 meters to 140 meters the electrical generating capacity will project developers increase • Federal and state fiscal incentives are scheduled to lapse in the early 2020s • Adoption of renewable portfolio standards (RPS) by either Utah or neighbor- • New difficulties in securing power purchase agreements due to a large influx ing states may improve economic viability of wind projects in Utah. of renewable electricity and decreasing incentives • Difficulties siting and permitting on or near federal lands could delay or deter projects
Source: Kem C. Gardner Policy Institute; U.S. Energy Information Administration; Beaver County Economic Development Office, press release titled “Renewable Energy and Our Economy”
2025, Utah coal deliveries to the Intermountain Power Project Wind (IPP) will cease as IPP converts to natural gas–fired electricity as Although wind has the lowest levelized cost of energy among mandated by IPP’s chief shareholder, the Los Angeles Department both conventional and renewable energies, wind remains of Water and Power. Utah’s coal production has shrunk by 47% relatively underdeveloped in Utah compared with neighboring since 2001. Although demand for coal in Asia is projected to rise, states Wyoming, Colorado, and New Mexico. Smaller wind ongoing litigation at U.S. domestic export terminals in California projects located close to communities such as Spanish Fork and Washington have forced Utah coal producers to transit coal (19 MW) or Monticello (60 MW) have met with local resistance shipments through Mexico or the Gulf of Mexico. due to compromised view sheds. Larger wind projects such as Low uranium commodity prices have brought Utah’s uranium Milford Project 1 and 2 in sparsely populated Beaver and Millard production activities to a standstill since 2013. The only counties have been embraced because of the enormous jump licensed conventional uranium mill in the United States, White in property tax revenues. Mesa, near Blanding, services superior grade uranium ores from Arizona while Utah’s lower grade ore remains shut in.
INFORMED DECISIONSTM 21 gardner.utah.edu I February 2020 Figure 44: Economic SWOT Analysis of Utah’s Solar Sector
Strengths Weaknesses • Utah has high-quality solar resources at higher altitudes, which often • Intermittent nature of solar energy increases the efficiency of solar systems • Storage costs for renewable energy generated electricity have not currently • Solar-generated electricity totaled almost 7% of Utah’s electricity generated demonstrated cost effectiveness in Utah’s low energy rate environment in 2017. Solar-generated electricity more than doubled from 2016 to 2017 • Utah is one of seven states with the best potential for solar power according to the National Renewable Energy Laboratory • Utah has over 6,100 employees working in the solar industry according to the 2017 Solar Foundation Annual Jobs Census1
Opportunities Threats • Through technological advances, solar panel costs will likely decrease. Solar • The U.S. announced Section 201 tariffs on imported solar cells and modules panel costs have already decreased by over 60% in the last decade commencing in January 2018. U.S. project developers have announced • Counties in southern Utah have the highest solar potential. Beaver, Iron, and project cancellations totaling $2.5 billion due to the announcement of Millard currently account for almost all of the installed capacity of utility-scale Section 201 solar • Lack of available transmission capacity from remote sites in Utah could deter • Advances in residential and utility-scale battery technology may enable solar project developers to become base load energy. • Federal and state fiscal incentives are scheduled to lapse in the early 2020s • New difficulties in securing power purchase agreements due to a large influx of renewable electricity and decreasing incentives
1. The Solar Foundation defined a solar job as one held by a worker who spends at least 50% of his or her time on solar-related work; census findings showed that 89% of solar workers spent 100% of their time on solar work. Source: Kem C. Gardner Policy Institute; U.S. Energy Information Administration; Deseret News, 6 April 2018, “Salt Lake City Rises Above Many Other American Cities”
Figure 45: Economic SWOT Analysis of Utah’s Geothermal Energy Sector
Strengths Weaknesses • Significant geothermal resources exist close to transmission • More expensive front-end costs of project development for both utility-scale • The University of Utah’s Energy and Geoscience Institute (EGI) was awarded a and direct-use geothermal as compared to some alternatives $140 million Department of Energy (DOE) research grant to research geother- • Research and development advances from FORGE will take significant time to mal and development of advanced geothermal extraction methods at the develop into commercial deployment Frontier Observatory for Research in Geothermal Energy (FORGE) center near Milford, Utah • Geothermal energy is a base-loaded mostly carbon neutral energy source
Opportunities Threats • Technical breakthroughs by FORGE may reduce the costs of energy produc- • Geothermal projects have costly front-end exploration and development tion and lower risks in project development phases before full-scale production of geothermal resources commences • Less than one-tenth of U.S. geothermal resources have been developed; Utah has 22 identified geothermal systems of which only 4 have been developed • Knowledge-sharing with the oil and gas industry may lead to cost reductions in deep drilling of geothermal wells • Utility-scale geothermal is a large potential energy source with positive attri- butes of serving as base load power as well as dispatchable power
Source: Kem C. Gardner Policy Institute; U.S. Department of Energy, 14 June 2018 press release, “DOE selects University of Utah Site for Research and Development”
Solar National Solar Jobs Census identified 6,170 solar jobs in Utah. Solar-generated electricity in Utah doubled from 2016 to In both rooftop and utility-scale solar, job creation is greatest 2017. Solar has replaced hydroelectric as the biggest renewable during the photovoltaic panel installation phase followed by a energy contributor to Utah electricity generation. Growth in drop-off in job creation during the production phase. Potential solar energy is driven by decreased costs of photovoltaic panels barriers to continued solar growth include the scheduled phase- as well as state and federal incentives. Both utility-scale solar out of both state and federal tax incentives. Another potential and rooftop solar in Utah doubled year-on-year from 2016 to barrier is tariffs levied on imports of Chinese-manufactured 2017, however utility-scale solar (2,500 thousand megawatt photovoltaic panels. hours) is nearly an order of magnitude larger than rooftop solar (289 thousand megawatt hours). Geothermal The National Renewable Energy Labs named Utah one Utah is the third largest producer of geothermal energy in of seven states along a solar energy corridor that are most the United States, behind California and Nevada. However, prospective in the U.S. for harnessing solar power. The 2017 within Utah’s renewable energy portfolio, geothermal energy
February 2020 I gardner.utah.edu 22 INFORMED DECISIONSTM ranks fourth, behind solar, hydroelectric, and wind. Technology Technology advances may reduce production costs of energy advances in both solar and wind have outstripped geothermal, from geothermal projects and lower project development risks. resulting in minimal growth in Utah’s geothermal resources Geothermal energy has a unique advantage over wind and since 2014. The Department of Energy’s $140 million grant to the solar as a dispatchable power source available 24 hours per day. University of Utah for geothermal research and development In addition, the surface footprint of geothermal operations is at Milford, Beaver County will create a center of excellence small compared with utility-scale wind farms and solar panel near the site of Utah’s three existing geothermal operations, fields. Thermo Hot Springs, Roosevelt Hot Springs, and Cove Fort.
Methodology
Economic Impact Model products to local consumers that would have been purchased The Gardner Institute estimated direct earnings by from out of state in the absence of the industry (“import multiplying direct wages obtained from the Utah Department of substitution”). Thus, sectors like oil and gas development Workforce Services (DWS) or the Bureau of Labor Statistics (BLS) and production, oil refining, coal mining, and energy-related by the appropriate industry-specific ratio of either earnings manufacturing sectors generate impacts. Sectors that serve or compensation to wages, depending on the presence of the local market, like electricity transmission and distribution, self-employed proprietors in each industry. These ratios were wholesale and retail trade, and construction, do not generate calculated from three-digit NAICS level data for Utah, available indirect and induced impacts but do contribute direct from the Bureau of Economic Analysis (BEA). In the case of oil employment, earnings, and GDP. In the case of the state’s and gas extraction, we were able to obtain industry earnings electricity generation sector, we calculated indirect and directly from the BEA. induced impacts on only 18% of total generation. This is the We estimated direct GDP by entering the direct employment five-year average share of electricity sector generation that was for each industry into REMI PI+ and obtaining the associated exported out of state. direct output, or “exogenous industry sales.” We then multiplied To calculate the impacts of the entire energy industry, industry sales by the value-added share of output for each we began by modeling only the “downstream” industries to industry. This gives direct value added by industry, which is determine the amount of activity in other energy sectors the equivalent to GDP. model generated as inputs. For example, the oil refining sector The Gardner Institute used the most recent data available at uses crude oil production as one of its major inputs, and fossil the time of research. Some values have since been revised. fuel electricity generation uses coal mining as one of its inputs. To estimate the indirect and induced effects resulting To avoid double counting, we subtracted this “intermediate from direct economic activity in the energy industry, we demand” employment from the direct employment we customized an economic impact model for Utah. REMI PI+ modeled in the “upstream” sectors like oil and gas production version 2.1, developed by Regional Economic Models, Inc., is and coal mining. a dynamic, multi-regional simulation model that estimates economic, population, and labor market impacts of specific Fiscal Impact Model economic or policy changes. The model incorporates input- We use the fiscal model to estimate new state and local output relationships, general equilibrium effects, econometric revenues and expenditures. Inputs to the fiscal model are relationships, and economic geography effects. employment, personal income, output, and population results The 70-sector model generally aggregates to two-digit or produced by the REMI PI+ model based on energy industry three-digit NAICS sectors, rather than fully incorporating the operations in Utah in 2017. six-digit specificity of our data from DWS and BLS. We adjusted Tax revenue estimates are based on past Utah effective tax for the difference in wages between the aggregated NAICS rates calculated as ratios of historical tax payments to personal sectors in REMI and our six-digit NAICS industries to regain income, industry output, and employment. All government precision lost by the model’s 70-sector limitation. expenditures reported in this memo are estimates based on In deciding which energy sectors generate economic impacts Utah historical averages for spending per capita, adjusted to in Utah, we considered whether they export products or provide 2017 dollars.
INFORMED DECISIONSTM 23 gardner.utah.edu I February 2020 Conclusion
Utah’s diverse energy industry plays a significant role in the energy prices saved consumers $578.4 million versus national state’s economy. In 2017, the industry directly and indirectly average prices, and have helped fuel the state’s economic supported approximately 4.0% of the state’s jobs and earnings growth. The state’s mix of traditional and renewable energy and nearly 6.0% of GDP. Direct energy-related state and local resources position it to enjoy continued low prices. government revenues totaled $492.1 million. Utah’s low retail
Endnotes 1 This does not include earnings for 14,600 energy efficiency jobs, 11 See solarstates.org/#state/utah/counties/solar-jobs/2018. as the data were not available and could not be estimated. 12 Production and pricing discussion taken from Taylor Boden, Ken 2 As with earnings, direct GDP from energy efficiency jobs could Krahulec, Michael Vanden Berg, and Andrew Rupke, Utah Mining not be estimated. 2017, Utah Geological Survey, Circular 125, 2018. 3 This does not include earnings for 14,600 energy efficiency jobs, 13 Per Energy Fuels; see www.energyfuels.com/project/white-mesa- as the data were not available and could not be estimated. mill/. 4 As with earnings, direct GDP from energy efficiency jobs could 14 Power system construction employment is estimated. NAICS not be estimated. 237120 is power and communication system construction. To 5 The North American Industry Classification System is used by estimate only the power system construction jobs, the Gardner state and federal statistical agencies as a means of classifying Institute used the Department of Workforce Services’ FirmFind economic activity based on production methods. It allows for database to identify the companies in this industry that perform various levels of detail, but at its most aggregated divides the power system construction. We estimated employment in 2017 economy into 20 sectors such as mining, utilities, construction, by taking the midpoint of the summed employment ranges manufacturing, and professional, scientific, and technical reported for those companies. This gave 960 jobs. We then services. The full classification scheme can be found at www. multiplied total power and communication system construction census.gov/cgi-bin/sssd/naics/naicsrch?chart=2017. jobs in previous years by the ratio of power system jobs to the 6 Taken from an analysis by BW Research for the National total in 2017 (960/1,723). Association of State Energy Officers and the Energy Futures 15 The change in capacity is measured from January 2014 to Institute, these are jobs where workers spend at least half of December 2017; the change in generation is measured from the their time on energy efficiency–related tasks. A more generous annual total in 2014 to the annual total in 2017. definition, counting workers who spend any time at all on 16 See https://www.thesolarfoundation.org/solar-jobs-census- energy efficiency–related tasks, gives 31,074 jobs. We use the factsheet-2017-ut/. more conservative count in our analysis. 17 These are estimated net savings, which remove savings due to 7 As reported elsewhere in this study, the Solar Foundation’s Solar program participants who would have implemented or installed Jobs Census counted 6,170 solar jobs in Utah. This includes 308 the energy efficiency measures without an incentive. They are solar equipment manufacturing and electricity generation jobs incremental savings in that they represent new energy savings that are counted in those sectors here. from programs implemented in 2017, not cumulative savings 8 Support activities for oil and gas operations include exploration; from all measures implemented in 2017 and prior years. For excavating slush pits and cellars; well surveying; running, cutting, a full discussion, see American Council for an Energy Efficient and pulling casings, tubes, and rods; cementing wells; shooting Economy, 2017 State Energy Efficiency Scorecard, available at wells; perforating well casings; acidizing and chemically treating aceee.org/sites/default/files/publications/researchreports/ wells; and cleaning out, bailing, and swabbing wells. u1710.pdf. 9 The number of support activities establishments does not 18 Oil and gas drilling jobs are those in NAICS sector 213111 Drilling include sole proprietors, who accounted for about 20% of total Oil and Gas Wells; extraction jobs are those in NAICS sector 211 support activities employment in 2017. Oil and Gas Extraction. 10 This is probably too low for renewables. Much of the wind and geothermal electricity goes out of state through power purchase agreements with California.
February 2020 I gardner.utah.edu 24 INFORMED DECISIONSTM
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