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The Colorado and New Mexico Oil and Gas Workforce: Economic Contributions and Future Options

Report Quantifies the Contribution of Oil and Gas Sector to States’ Economies and Provides Recommendations to Help Workers Impacted By Economic Transition

January 26, 2021

A new report released by the BlueGreen Alliance today entitled The Colorado and New Mexico Oil and Gas Workforce: Economic Contributions and Future Options examines the current state of the oil and gas industry in Colorado and New Mexico and provides recommendations to blunt the impacts to workers due to the industry’s boom and bust cycle. The recommendations call for a proactive state and federal response to help workers both in the short and long term.

“We know that workers’ wages don’t just support themselves and their families—they also help support the communities in which they live,” said Chris Markuson, BlueGreen Alliance Director of Colorado and State Economic Transition Policy. “We have to be thoughtful and cognizant of the contribution of oil and gas workers to our economy and be proactive to ensure workers and communities are prepared and have the resources they need to in the face of any changes in this sector.”

The report found the oil and gas sectors contribute significantly to Colorado and New Mexico’s economy. The sectors directly employ over 33,000 workers in Colorado and 28,000 workers in New Mexico. Colorado workers earned over $4 billion, and New Mexico workers earned over $2 billion in wages in 2019. The sector also generated severance tax revenues of $212 million in Colorado and $555 million in New Mexico in 2019.

“This report provides a look at the current workforce, the economic impact of the oil and gas industry on Colorado and New Mexico, and how it intersects with other industries,” said report author Ben Webster, PhD, the Associate Director of Curriculum and Specialization Lead for the Environment and Natural Resources Policy program at the University of Colorado Boulder. “The oil and gas sector is made up of a workforce bearing significant weight, and reductions in the size of the oil and gas sector would have negative impacts on workers and the economies in which they are located. It’s important to be proactive to ensure we’re doing what we need to do to protect workers and communities as demand for oil and gas lessens.”

However, the report assesses the impact of a significant reduction in the oil and gas sectors over time, and—while it will not be immediate—job losses in the oil and gas sector may have sizable negative job loss impacts in both the upstream (including drilling and well operations) and downstream elements (including refining) of the supply chain. These types of impacts have already been observed in the coal sector. These impacts would be most pronounced in counties that have significant oil and gas operations, such as Weld County, Colorado, and Lea County and Eddy County, in New Mexico.

“Even though these are good-paying jobs, the workers in the oil and gas sector are impacted by the boom or bust cycle in the industry and we need to do more to help them immediately and in the future,” said Dennis Dougherty, the Executive Director of the Colorado AFL-CIO. “Colorado’s clean economy is growing and as demand for fossil fuels drop we need to be ready to help out workers and communities that will be impacted. With the right economic investment and community engagement, we can make sure that workers and communities are protected.”

Recommendations in the report include the federal government providing additional immediate relief to workers during the COVID-19 pandemic and Colorado and New Mexico increasing funding for workforce centers and workforce development, establishing programs to provide wage support to workers caught up in the energy transition; and mandating policies that will boost job quality in new energy and utility projects and ensure local hiring and targeted hiring of underemployed or unemployed oil and gas workers.

“We support efforts to create diversified local economies and ensure that there are systemic supports in place for impacted workers,” said Brian Condit, Executive Director of the New Mexico Building and Construction Trades Council. “We know that several New Mexico communities are at risk of declining and volatile industries like we see with oil and gas boom and bust cycles. We need support for our workers and communities to grow new industries so that we don’t leave workers and the communities they call home out in the cold.”

Download The Document