The Colorado Energy Coalition (CEC), an industry affiliate of the Metro Denver Economic Development Corporation (Metro Denver EDC), today released the seventh edition of its Resource Rich Colorado (RRC) report.
The annual study measures and details Colorado’s competitive position in the oil, natural gas, coal, renewables, power, alternative fuel vehicle, and environment and sustainability sectors that make up the energy industry.
The analysis also compares Colorado to the 49 other states based on the availability of natural resources for energy generation, energy policies and programs, and the intellectual resources crucial to energy development.
“Colorado is truly ‘resource rich’ due to its substantial energy resource mix, tremendous intellectual capital with 24 federally-funded scientific research laboratories, and its highly progressive energy policies and programs,” said Brian Payer, Consulting Manger with IHS Corporation, and Co-Chair of the CEC’s Resource Rich Colorado Committee. “These assets make the state one of the most diverse energy economies in the world.”
This year’s report highlights a major shift in the affordability of renewable energy, noting that when considering the unsubsidized, levelized costs of new power plant facilities, the cost of wind energy is now at parity with natural gas and the price of solar has shown tremendous price drops.
In fact, since 2009, there has been a 56 percent price drop for the cost of wind generation and a 78 percent cost decrease for solar generation. Further, RRC estimates that more than 400 MW of wind generation and 290 MW of utility-scale solar generation will be installed within Colorado in 2016, boosting the amount of cost-effective renewable energy in the state’s power generation portfolio.
Additional key RRC findings:
- Colorado is a clear leader in progressive energy policies and programs. The state is a pioneer in air quality policy, adopting the first state-level regulations on methane emissions from oil and gas operations in 2014.
- The study notes a clear, national trend of retiring coal plants, which Colorado has experienced first-hand as part of the Clean Air-Clean Jobs Act. However, 60 percent of Colorado’s net energy generation is derived from coal power.
- When it comes to oil and gas production, the efficiency per rig has increased exponentially, with production increasing in the Niobrara shale formation by a factor of six.
- Following a national trend, the state’s per-capita CO2 emissions have dropped steadily from 2005 levels. In August 2015, the Environmental Protection Agency (EPA) finalized the Clean Power Plan, which aims to reduce carbon pollution from power generation by 32 percent by 2030 (from 2005 levels).
The energy industry is vital to Colorado’s economy and a key employment cluster in the state. New data show that the energy industry (both fossil fuels and cleantech) directly employs 74,720 energy workers, which support an additional 188,890 indirect employees throughout the state. The industry tallied an overall economic impact in Colorado of $17.2 billion in 2015.
The RRC analysis shows that Colorado’s balanced energy economy ranks prominently in several areas:
- Third in total LEED-certified space per capita
- Fourth in Clean Edge, Inc.’s State Clean Energy Index 2015. The state has held a top-five position the past six years in a row.
- Sixth in natural gas production
- Seventh in crude oil production
- Ninth in installed solar capacity at 316 megawatts (MW)
- Tenth in installed wind capacity, with 2,583 MW installed
- Tenth in coal production
- Tenth in alternative fuel vehicle ownership per capita
However, while Colorado’s energy industry is experiencing broad success, the state’s companies face significant market, regulatory, and political uncertainty, according to Chris Hansen, Principal with Hansen Advisors and Co-Chair of the Colorado Energy Coalition.
“While the federal renewable electricity Production Tax Credit received a short-term extension through 2014, currently, an extension for 2015 and beyond remains uncertain, creating an unpredictable environment for Colorado’s wind and solar firms,” he said.
In addition, Colorado’s oil and gas sector is contending with a dramatic decline in commodity prices, which challenges job growth in this key sector of the state’s economy, according to Hansen.
“Although the industry does face uncertainty, several factors continue to make Colorado a magnet for energy companies,” explained Tom Clark, CEO of the Metro Denver EDC. “The state’s low income tax, moderate business costs, skilled energy workers, and diverse resource base continue to attract investment and create jobs in the energy and natural resources sector.”
A detailed analysis of Colorado’s and the United States’ competitive rankings can be found by downloading the full report below.
>> Resource Rich Colorado, Seventh Edition (Executive Summary)
>> Resource Rich Colorado, Seventh Edition (Full Report)
Janet Fritz is the senior director of marketing and technology for the Metro Denver Economic Development Corporation.
This report was originally published to the Metro Denver Economic Development Corporation’s website, you can view the full report here.