Bruell column: Looking forward, not back, to build our local economy
All of us here in Garfield County would benefit from a thriving, diverse local economy. We rely on a healthy county budget to fund the community assets that so many of us enjoy, from safe roads and bridges to our public health department to programs for seniors.
There were many years in the past when the oil and gas industry subsidized our county’s tax base significantly, providing millions of dollars in revenue in the form of severance and other taxes. In 2015, the county collected $2.8 million from the oil and gas industry just from severance taxes.
In recent years, however, revenue from local oil and gas production has plummeted. The county projected a collection of only $0.3 million in severance taxes in 2022. Property taxes collected from oil and gas corporations have dropped significantly as well.
We need to find a way to address recent shortfalls in the county budget. However, we can’t simply go back to a time of oil and gas booms — and believing we can do so is not smart economic planning. The dramatic decrease in revenue from the fossil fuel industry is not simply a local or state phenomenon. It’s not something we have much control over at all at the local level. The fact is: The global fossil fuel industry is experiencing long-term, structural decline.
Various economic indicators illustrate this decline. In 1980, the oil and gas sector held 29% of the stock market’s S&P 500 Index. Now it holds 2.1%, the smallest position of any sector in the stock market. Since 2010, the five largest publicly traded oil and gas corporations have been unable to pay dividends to their shareholders without taking on debt and selling off oil reserves.
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Across the world, demand for oil and gas is declining as countries are turning increasingly toward renewable energy sources. This trend is accelerating as the transportation sector shifts toward electrification and as new technologies make the production of clean energy even cheaper.
The automation and digitalization of the fossil fuel production process has also meant that corporations are laying off workers in the field and hiring recent graduates who are tech-savvy and interested in working remotely. ExxonMobil plans to cut its global workforce by 15% in 2021.
Considering the huge federal subsidies that the fossil fuel industry receives, the decline of this industry is even more striking. According to conservative estimates, the U.S. government paid about $16 billion in direct subsidies to oil and gas corporations just in 2019.
Since June 2019, the county commissioners have spent nearly $2 million of county funds on oil and gas lawyers and lobbyists in an effort to fight statewide protections for clean air and water.
These efforts failed. In any case, eliminating those health and safety measures would not have resulted in a significant increase of oil and gas production in our county anyway.
There are major factors deterring companies from investing in natural gas production in Garfield County — on top of the global challenges facing the industry as a whole. The geology of our region makes fracking more expensive here than in other regions, and we lack enough pipelines for transporting natural gas to major U.S. markets.
There is currently a whopping $16 million sitting in the county’s Oil and Gas Mitigation fund. Rather than using those funds to pay more oil and gas lawyers and lobbyists, the commissioners should invest some of those funds in developing diverse, reliable economic drivers for our local economy.
Building a thriving local economy is a huge task, especially now that the oil and gas industry is shrinking. But we’ll never get there if we don’t begin taking more significant steps in that direction now. The county commissioners need to invest more time and resources in creative, strategic planning to diversify our local economies.
This kind of economic planning takes innovative leadership. Steps include: bringing a wide variety of local perspectives and voices to the table; building on the unique assets and existing strengths of our county; coordinating and collaborating with all levels of local government and all sectors of our local economy; and working in partnership with state, regional and local institutions to facilitate investments in our local economy.
Over the last three decades, the five largest U.S. oil corporations have spent a total of over $3.6 billion on advertising. These corporate giants are spending billions of dollars trying to convince us that the future of our families and communities depends on their financial success. In fact, our county’s future depends on recognizing that we cannot rely on the floundering fossil fuel industry.
We urge the county commissioners to stop spending county funds defending those corporations. Instead, let’s invest some of the $16 million in the O&G Mitigation Fund in collaborative and creative efforts to build from within on the local strengths and assets of our communities.
Debbie Bruell of Carbondale chairs the Garfield County Democrats.
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