About a year ago the Colorado Oil and Gas Industry was turned upside down. Almost overnight the price for a barrel of oil plummeted.
Since dropping, prices for a barrel of oil have remained low, rig count has dropped, employment has declined, BUT production has remained at record levels. At some point the disruption will become more settled and Colorado will move forward with a smaller oil and gas industry.
Projected revisions to the BLS employment data for Colorado suggest the oil and gas industry could be reduced by 1,000 jobs for 2015. Although the industry is small from an employment perspective, it is significant in terms of gross domestic product for the state and MSAs. This is particularly true in Mesa, Weld, and Denver counties. Much of the drilling occurs in Mesa and Weld counties and many of the headquarters or company offices are located in the Denver MSA.
The IMPLAN model is designed to show how changes in employment or sales could impact the state economy. In this case, the Colorado Labor Market Information group has produced projections suggesting there will be a loss of 1,000 jobs in the oil and gas industry for 2015. The IMPLAN model indicates this will cause an additional loss of 1,800 indirect and induced jobs. In addition there will be a combined loss of $657 million in direct, indirect, and induced sales in the Colorado economy.
To date the robust mix of industries in Colorado has offset the job losses in the extractive industries. That is likely to continue for the remainder of the year and into 2016.
