Oil, gas have big presence in Denver area, report finds

Gargi Chakrabarty

Thursday, March 27, 2008

Far from the drilling fields, the oil and gas industry has a sizeable footprint in metro Denver.

It owns $482.6 million worth of property in the seven-county area and pays rent to the tune of $178.1 million a year, according to a report released Wednesday by real estate firm Cushman & Wakefield.

Commissioned earlier this year by the Colorado Oil and Gas Association, a trade body, the report found that 1,519 oil and gas companies occupy more than 10.9 million square feet of office, industrial and retail space in the metro area.

Also, the energy industry employs 26,382 in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties.

This presence also translates into higher incomes for taxing authorities.

For example, oil and gas companies paid $25.8 million in local taxes on property assessments levied in 2007.

"It's well understood that the oil and natural gas industry plays a significant role in Colorado's economy, but it is enlightening to see the impact it has had on the state's capitol city," said Denver Mayor John Hickenlooper in a release.

COGA President Meg Collins said "a variety of people in the past two months have asked how many people did we employ in metro Denver, how much did we pay in taxes" and that she didn't have an answer.

"So we asked Cushman and Wakefield to take a look," Collins said. "(This report) reinforces how proud we are of the important role that industry plays in metro Denver, not just statewide."

Last year, the industry had touted another report compiled by the Colorado School of Mines that showed oil and gas poured $22 billion into the state's economy in 2005, employed 70,000 workers and paid a salary, on average, of $60,000 a year.

But that year, the prices of natural gas peaked in the aftermath of hurricanes Rita and Katrina.

Since then, prices have softened, especially in Colorado. As a result, the total value of oil and gas production dropped 24 percent to $6.63 billion in 2007, compared with the record $9.39 billion in 2005 and $8.75 billion in 2006.

The report on the industry's real estate impact comes as the state is making an effort to raise severance tax on oil and gas producers, and also overhaul drilling rules to reduce impact on communities and the environment.

In terms of the industry's employment by county, Denver has 12,911 workers on industry payrolls, Jefferson 5,473 while firms in Adams and Arapahoe together supported another 5,772 jobs.

Sizeable footprint

Colorado's oil and gas industry in the seven-county metro Denver area.

* Property owned $482.6 million

* Rent paid each year $178.1 million

* Local taxes on property assessment levied in 2007 $25.8 million

* Office, industrial and retail space occupied 10.9 million square feet

1,519 companies, in business for at least one year, are registered with the Colorado secretary of state.

26,382 workers are employed in the area.

Source: Cushman & Wakefield report, commissioned by the Colorado Oil and Gas Association