economic impact of downtown denver oil and gas industry€¦ · findings industry definition...

Final Report

Economic Impact of

Downtown Denver

Oil and Gas Industry

Prepared for:

Downtown Denver Partnership

Prepared by:

Economic & Planning Systems, Inc.

April 17, 2015

EPS #143038

Table of Contents

EXECUTIVE SUMMARY ...................................................................................................... 1

ANALYSIS .................................................................................................................... 2

Introduction ........................................................................................................... 2

Findings ................................................................................................................ 4

List of Tables

Table 1 Private-Sector Employment, 2005 & 2014 .......................................................... 5

Table 2 Private-Sector Wages, 2005 & 2014 .................................................................. 6

Table 3 Occupied Office Floor Area Downtown Denver, 2014 ............................................ 7

Table 4 Oil and Gas Employment Impact Summary, 2014 ............................................... 8

Table 5 Oil and Gas Output Impact Summary, 2014 (in millions) .................................... 11

Table 6 Oil and Gas Value-Added Impact Summary, 2014 (in millions) ............................ 12

Table 7 Oil and Gas Public Revenue Impact Summary, 2014 .......................................... 12

List of Figures

Figure 1 Downtown Denver Study Area .......................................................................... 2

Figure 2 Comparisons of Employment Multipliers and Output .......................................... 11

Figure 3 Survey Result Overview ................................................................................ 13

Figure 4 Business Visitation (Not Convention) Impact .................................................... 14

Figure 5 CBRE Downtown Denver Definition.................................................................. 16

Economic & Planning Systems, Inc. 1 April 17, 2015 Final Report

EXECUTIVE SUMMARY

The oil and gas industry (Industry) is a significant component of the Downtown Denver economy.

While the Industry has been studied at the county, state and national levels, and a small number

of analyses have evaluated office space impacts of the Industry’s presence in Downtown Denver,

no recent study has documented the full economic impact of the Industry’s presence in

Downtown Denver. As such, the Downtown Denver Partnership (DDP) commissioned a study to

detail the Industry’s wide variety of economic contributions to Downtown Denver, which are

summarized below. All results are as of June 2014 unless otherwise noted.

1. The Industry represents 10,446 jobs in Downtown Denver, and 11 percent of all private-

sector jobs Downtown. This is a 115 percent increase over the 4,862 jobs in 2005, when

Industry jobs represented 6 percent of private-sector jobs Downtown.

2. The Industry’s Downtown presence accounted for 90 percent of total Industry employment in

the City and County of Denver in 2014.

3. On average, an individual working in the Industry in Downtown Denver earns $156,005 per

year, 180 percent more than the $55,744 average wage of other private-sector industries in

the City and County of Denver.

4. The Industry, including indirectly-supported firms, occupies 5.1 million square feet of

Downtown office space, which is 22.6 percent of the total private-sector office space in

Downtown.

5. The Industry’s 10,446 Downtown jobs support an additional 17,748 jobs, which amounts to

1.7 additional jobs for every 1 Industry job (a total multiplier of 2.7).

6. The direct economic output (i.e. demand for the Industry’s services) of the Industry’s

Downtown activity totaled $5.8 billion in 2014, accounting for 8.9 percent of the City’s $64.9

billion output in 2014.

7. The Industry’s Downtown presence resulted in $542 million in state and local taxes, as well

as $608.4 million in federal taxes, in 2014.

8. The Industry accounts for an average 4 percent of the City’s annual convention and

conference activity (visitation and room nights), generating an average of $20.8 million in

direct economic activity annually.

9. The Industry also generates general business visitation activity totaling $30.5 million in

lodging revenues ($4.5 million in lodging taxes) and $22.1 million ($1.7 million in sales

taxes) in other retail expenditures for Downtown Denver.

10. The Industry gave an estimated $27.9 million in charitable contributions in 2014.

Economic & Planning Systems, Inc. 2 April 17, 2015 Final Report

ANALYSIS

I nt ro duct ion

Economic & Planning Systems (EPS) was retained by the Downtown Denver Partnership (DDP) to

conduct a study of the economic impacts of the oil and gas industry (Industry) on Downtown

Denver. The purpose of the effort was to identify the magnitude of the Industry’s presence and

integration into the fabric of Downtown business activity and the significance of its economic

contributions. Economic contributions are defined as the number of jobs held within the

definition of the Industry, wages, output, value-added, and public revenue contributions, as well

as the portion of Downtown Denver’s office space occupied by the Industry, the portion of

convention and non-convention visitation generated by the Industry, and other attributes that

characterize the demographic complexion of the Industry’s workforce, such as educational

attainment, place of residence and age distribution. The analysis was conducted according to

DDP’s definition of Downtown Denver, as illustrated in Figure 1.

Figure 1 Downtown Denver Study Area

Economic Impact of Downtown Denver Oil & Gas Industry

April 17, 2015

Economic & Planning Systems, Inc. 3 Final Report

Methodology

Economic Impact Analysis

An economic impact analysis was completed using IMPLAN input-output modeling software.1

IMPLAN’s modeling software is structured to account for trade flows and industry profiles within a

defined economic unit (study area), such as the City and County of Denver. Such an analysis

provides an estimate of the multiplier effects, or the “ripple effect”, of an initial “impact” or

“demand” from the Industry on the area economy. There are three main components to the

characterization of the economic impacts:

Direct Impacts are the economic activities carried out by the Industry, such as the labor it

employs; wages; property and sales taxes paid; and the goods, services and real estate it

purchases or leases in its operations.

Indirect Impacts derive primarily from business-to-business activities, such as the lease

and purchase of equipment for operations, and the legal, financial and administrative

services that may be procured in the process of conducting direct activities. In the Industry,

indirect impacts most often include manufacturers of equipment, the legal profession,

professional and technical services, and finance and insurance. These impacts will quantify

the extent of that integration in terms of jobs, contribution to gross regional product (GRP),

and wages.

Induced Impacts are the ripple effects of the direct and indirect impacts on the larger

economy. They include the local expenditures made by households of the direct and indirect

industry jobs. These effects are the increases in employment and expenditure created by

successive rounds of local spending and hiring, as individuals or firms associated with the

Industry buy goods and services in the local economy.

The economic impact analysis identifies several measures of economic activity, including output

(i.e., total sales or spending), earnings (salaries plus employer-paid benefits including proprietor

income), employment (jobs), and value-added (equivalent to GDP). State, local and federal

fiscal impacts are also estimated, including payments such as severance taxes, property taxes,

and sales taxes associated with the Industry’s direct activity in Downtown Denver.

1 Minnesota IMPLAN Group, Inc. (MIG), Hudson, WI, www.implan.com


April 17, 2015


F ind ings

Industry Definition

Economic impact studies evaluating the oil and gas industry generally define it as a set of core

sectors whose primary activities encompass the exploration or extraction of oil and gas, as well

as vertically-integrated support activities whose business is completely dependent on demand for

exploration or extraction. This definition of the Industry typically includes the following sectors

according to their North American Industry Classification System (NAICS) codes:

211111: Crude Petroleum and Natural Gas Extraction

211112: Natural Gas Liquid Extraction

213111: Drilling Oil and Gas Wells

213112: Support Activities for Oil and Gas Operations

23712: Oil and Gas Pipeline and Related Structures Construction

4247: Petroleum and Petroleum Products Merchant Wholesalers

324: Petroleum and Coal Products Manufacturing

333132: Oil and Gas Field Machinery and Equipment Manufacturing

45431: Fuel Dealers

486110: Pipeline Transportation

A broader definition of the Industry (used in some previous studies) also includes the following

mid-stream and service-providing sectors that are more indirectly related:

221112: Fossil Fuel Electric Power Generation

221210: Natural Gas Distribution

237130: Power and Communication Line and Related Structures Construction

424710: Petroleum Bulk Stations and Terminals

424720: Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations

and Terminals)

523910/523999: Miscellaneous Financial Investment Activities

533110: Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)

541: Professional, Scientific, and Technical Services

This study uses the narrower definition of the Industry, as defined by the core set of exploration

and extraction activities, whose output (i.e., final demand) is dependent on demand for oil and

gas production.


April 17, 2015


Downtown Denver

Private-Sector Employment

EPS used 2nd quarter 2005 and 2nd quarter 2014 data from the Colorado Department of Labor

and Employment’s Quarterly Census of Employment and Wages (QCEW) for the following

analysis. Between 2005 and 2014, total private-sector employment in the City and County of

Denver increased from 357,901 to 395,563, a 1.1 percent annual average increase, shown in

Table 1. Over the same period, private-sector employment in Downtown Denver grew from

80,537 to 96,976 jobs, averaging 2.1 percent per year.

Employment in the Industry in Downtown Denver grew from 4,862 to 10,446 jobs between 2005

and 2014, averaging 8.9 percent growth per year.2 As a portion of Downtown Denver’s private-

sector employment, the Industry expanded from 6 to 11 percent. In the context of the City and

County of Denver (which includes the northern portion of the Denver Tech Center), there were

5,596 Industry jobs in the City and County of Denver in 2005 and 11,432 jobs in 2014, making

the Industry’s presence in Downtown Denver approximately 90 percent of all Industry jobs in

Denver.

Table 1 Private-Sector Employment, 2005 & 2014

2 In estimating total oil and gas industry employment, it was discovered that some exploration companies had reported to CDLE

under NAICS sectors not aligning with the definition of the direct industry, as provided on page 3 of this report. To identify a more

accurate estimate of total industry employment, EPS analyzed establishment-level records from CDLE. The analytical process

involved the following steps: 1) mapping CDLE establishment-level records and selecting those that fell within the boundary of

Downtown Denver; 2) making an initial estimate of employment using NAICS codes for the industry definition; 3) verifying that the

preliminary estimate did not include non-oil and gas employment, e.g., uranium or coal mining; 4) searching through all remaining

establishment records using Colorado Oil and Gas Conservation Commission listings of oil and gas businesses in Denver; 5)

searching all remaining establishment names for key terms, such as “oil,” “gas,” “exploration,” ”resource,” “energy,” etc.; 6)

eliminating non-industry businesses that may have been captured in the previous step, for example, establishments with names

such as “wind,” “solar,” or “community” resource; 7) verifying that all selected establishments were properly reported as single

location or a headquarters reporting jobs for the physical site alone; 8) determining final industry employment with the initially-

selected establishments and those selected through the vetting process; and 9) using best available information, verifying that each

additional establishment: a) is located Downtown Denver, b) is reporting jobs for Downtown only; and c) is engaged in an activity

directly related to oil and gas exploration; for this task, EPS used information from websites and searched Dunn & Bradstreet records.

2005 (Q2) 2014 (Q2) Total ∆ Ann. # Ann. %

Downtown Denver

Oil & Gas Industry 4,862 10,446 5,584 620 8.9%

All Private-Sector Jobs 80,537 96,976 16,439 1,827 2.1%

O&G as % of Private-Sector Jobs 6% 11% --- --- ---

City & County of Denver

Oil & Gas Industry 5,596 11,432 5,836 648 8.3%

All Private-Sector Jobs 357,901 395,563 37,662 4,185 1.1%

O&G as % of Private-Sector Jobs 2% 3% --- --- ---

Source: CDLE, QCEW Microdata; Economic & Planning Systems

H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\M odels\[143038-QCEW_2014_03-04-15.xlsm]t1.3.2-OG 2005 2013 Sum

Private-Sector Jobs 2005-2014


April 17, 2015


As a second point of comparison, a recent study of the Industry’s economic and fiscal

contributions (produced by the University of Colorado, Leeds School of Business, Business

Research Division dated May 2014) estimated that the City and County of Denver contained

approximately 31 percent of the state’s Industry jobs in 2012. Since the Industry Downtown has

historically accounted for approximately 90 percent of the City’s Industry employment, this

would indicate that the Industry’s presence Downtown accounts for approximately 27 percent of

the State’s total Industry employment.

Private-Sector Wages

According to analysis of the CDLE’s data, average wages in the Industry are higher than wages

in other private-sector industries, and wages in Downtown Denver are higher than wages

elsewhere in Denver. Moreover, wages for the Industry are also higher among those located in

Downtown Denver than those located elsewhere in Denver.

Table 2 shows that wages in Denver for the Industry, which averaged $134,670 in 2014, are

140 percent higher than in other private-sector industries, where the average is $55,744. The

analysis also shows that Downtown Denver wages in both the Industry and others tend to be

higher than elsewhere in Denver. Overall, Downtown Denver private-sector wages are 35

percent higher than elsewhere in Denver, averaging $75,456 in Downtown in 2014 versus

$55,744 elsewhere. Within the Industry, average wages are 16 percent higher Downtown than

elsewhere, averaging $156,005 versus $134,670 elsewhere.

Between 2005 and 2014, average wages in the Industry in Downtown Denver have increased

24.7 percent and 34.0 percent elsewhere in Denver. Average wages in other industries have

increased 10.5 percent in Downtown Denver and 22.7 percent elsewhere in Denver.

Table 2 Private-Sector Wages, 2005 & 2014

2005 (Q2) 2014 (Q2) Total ∆ Total % Ann. %

Oil and Gas Industry

Denver $100,510 $134,670 $34,160 34.0% 3.3%

Downtown Denver $125,085 $156,005 $30,920 24.7% 2.5%

DT Denver % (+ / -) Denver 24% 16%

All Other Private-Sector Industries

Denver $45,448 $55,744 $10,296 22.7% 2.3%

Downtown Denver $68,267 $75,456 $7,189 10.5% 1.1%

DT Denver % (+ / -) Denver 50% 35%

Source: QCEW Microdata; Economic & Planning Systems

H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\M odels\[143038-QCEW_2014_03-04-15.xlsm]t3.1-OG Wages

Private-Sector Wages 2005-2014


April 17, 2015


Office Space

At the end of the 3rd quarter 2014, Downtown Denver (using DDP’s geographic definition of

Downtown Denver) had approximately 35.1 million total rentable square feet of office space with

a direct vacancy rate of 9.7 percent, according to information from CoStar. This encompasses all

office space, including owner-user buildings. According to research compiled by CBRE for 2014,

Downtown Denver (a different geographic definition—see Figure 5 at the end of this document)

had approximately 25,757,800 square feet of leasable office space (CBRE does not count owner-

user buildings or spaces under 10,000 square feet in its inventory) of which 22,666,930 square

feet were occupied, shown in Table 3. According to CBRE’s research, the Industry occupied

4,400,000 square feet of Downtown Denver’s office space, or 19.4 percent.

Table 3

Occupied Office Floor Area Downtown Denver, 2014

With approximately 97,000 private-sector jobs in Downtown Denver, this reflects an average

usage of 234 square feet per job for all private sector jobs Downtown. Within the Industry,

usage averages 421 square feet per job. According to CBRE, the higher average floor space

usage per job is attributable to greater storage and amenity space requirements than typical

non-Industry office users. Higher-level research indicates that Industry users typically require

between 400 and 500 square feet per job.

Extrapolating from the findings of the economic impact analysis, which is detailed in the following

section, EPS estimates that an additional 731,000 square feet of office space is occupied in

Downtown Denver by firms indirectly related to the Industry’s direct economic activities.

Assuming that 100 percent of these indirect jobs are also located in Downtown Denver and that

the average 234 square feet per job is relevant, the additional 3,128 indirect jobs bring the total

office space impact from the Industry on Downtown Denver to 5.1 million square feet, or 22.6

percent of occupied private-sector office space.

Direct Indirect Direct & Indirect

[Note 1]

Occupied Office Floor Area

Oil and Gas Direct Industry 4,400,000 731,059 5,131,059

Other 18,266,930 21,935,871 17,535,871

Total [Note 2] 22,666,930 22,666,930 22,666,930

Employment

Oil and Gas Direct Industry 10,446 3,128 13,574

Other 86,530 --- 83,402

Total [Note 2] 96,976 96,976 96,976

Floor Area / Job

Oil and Gas Direct Industry 421 sqft / job 234 sqft / job 378 sqft / job

Other 211 sqft / job --- 210 sqft / job

Total [Note 2] 234 sqft / job 234 sqft / job 234 sqft / job

[Note 1]: The indirect off ice f loor area estimate assumes that 100 percent of these jobs are located w ithin Dow ntow n Denver.

[Note 2]: Office space totals exclude: a) ow ner-user buildings, and b) spaces under 10,000 square feet.

Source: CBRE; Economic & Planning Systems

H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\Data\[143038-Off ice Impact.xlsx]TABLE 1 - Summary Alt B


April 17, 2015


Economic Impact

The following analysis has been completed using IMPLAN input-output modeling software, as

described previously. Estimates of jobs, output, value-added and public revenue impacts are

based on the direct employment estimates using the preceding analysis of CDLE data.

Employment

This section presents the results of the analysis in terms of direct, indirect and induced

employment impacts.

Direct Employment

As presented earlier, there are 10,446 direct jobs in the Industry in Downtown Denver, from

which demand for an additional 17,748 indirect and induced jobs (3,128 + 14,620 = 17,748) are

generated, shown in Table 4. That is, for each job in the Industry, 1.7 additional jobs are

generated—a multiplier of 2.7, which is discussed later in the report.

Of the direct employment Downtown, drilling and extraction employment account for 79 percent

(650 + 7,604 = 8,254 jobs of 10,446), support activities for another 13 percent (1,382 jobs),

and all other jobs for another 8 percent (810 jobs). The category “all other” captures a portion

of some other industries whose activities are listed below and are directly linked to the

exploration and extraction industries. Note: This does not mean that all establishments in

Downtown Denver or the City that fit the following categories are directly related to the oil and

gas exploration or extraction activities.

Financial investment activities

Real estate

Accounting, tax preparation, bookkeeping and payroll services

Architectural, engineering and related services

Management consulting services

Environmental and other technical consulting services

Marketing research and all other miscellaneous professional, scientific and technical services

Business support services

Construction of nonresidential structures

Wholesale trade

Table 4 Oil and Gas Employment Impact Summary, 2014

Source Direct Indirect Induced Total

Drilling 650 7 0 657

Extraction 7,604 175 14 7,794

Support Activities 1,382 1,044 2 2,428

All Other 810 1,901 14,604 17,315

Total 10,446 3,128 14,620 28,194

Source: IMPLAN; Economic & Planning Systems

H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\Data\[143038-IM PLAN Results Summary-M ar 5.xlsx]TABLE 2 - Emp


April 17, 2015


Indirect Employment

There are an estimated 3,128 jobs in Downtown Denver that are indirectly supported by the

Industry’s activities (i.e. business-to-business spending). Of these, 6 percent (175 jobs) also fall

in the extraction category and 33 percent (1,044 jobs) in the support activities category. The

largest impact, however, falls in the “all other” category, accounting for 61 percent (1,901 jobs)

of total indirect employment. Not including the “all other” categories listed previously, the

indirect employment impact extends to the following additional employment industries:

Monetary authorities and depository credit intermediation

Non-depository credit intermediation and related activities

Securities and commodity contracts intermediation and brokerage

Insurance carriers, agencies, brokerages and related activities

Commercial and industrial machinery and equipment rental and leasing

Legal services

Computer systems design services and related services, including facilities management

Advertising, public relations and related services

Management of companies and enterprises

Employment services

Maintenance and repair construction of nonresidential structures

Truck transportation

Pipeline transportation

Couriers and messengers

Warehousing and storage

Data processing, hosting and related services

Investigation and security services

Services to buildings

Waste management and remediation services

Hotels and motels, including casino hotels

Restaurants

Business and professional associations

In understanding these indirect employment numbers, it is important to note that they represent

the sum of portions of jobs that are providing goods or services to the Industry. Some indirect

industry firms have staff dedicated entirely to providing services to the Industry and some do

not. As an example, some insurance carriers, agencies, or brokerage firms may employ one or

two staff that spend 100 percent of their time providing services to the Industry. On the other

hand, other Insurance firms may only have one or two staff dedicating a third or some portion of

their time providing services to the Industry. Across all indirect industries, the portion of time

staff spending providing services to the Industry varies widely.


April 17, 2015


Induced Employment

There are an estimated 14,620 jobs induced by the Industry’s direct activities, of which nearly

100 percent fall into the “all other” employment category. For the most part, induced

employment includes services that relate to the expenditures of households, such as personal

care services, health care, financial services, restaurants and retail goods or services, and

educational institutions. Some industries appearing in the list below also appeared in the list of

indirect industries on the previous page. The primary difference is that the demand for induced

industry services is created by household, not business-to-business, spending.

Insurance agencies, brokerages and related activities

Funds, trusts and other financial vehicles

Schools and universities

Other educational services

Physicians, dentists, and other health practitioners

Outpatient and home health care centers

Hospitals

Nursing and community care facilities

Individual, family and child day care services

Community food, housing, and other relief services, including rehabilitation services

Promoters of performing arts and sports and agents for public figures

Lodging establishments

Restaurants

Automotive repair and maintenance, except car washes

Personal care services

Grant-making, giving and social advocacy organizations

Labor and civic organizations


April 17, 2015


Output

Output can be characterized as the total spending that results from demand for an industry’s

goods or services. Table 5 shows the magnitude of output (i.e. spending for goods and

services) related to the Industry’s Downtown activity (i.e. direct output), the output associated

with indirect industries, and the output associated with induced activity. Direct output is

estimated at $5.8 billion, or 8.9 percent of the City’s total $64.9 billion in output in 2014.

Including the indirect and induced industries, the Industry’s total supply chain impact was

approximately $8.5 billion.

Table 5 Oil and Gas Output Impact Summary, 2014 (in millions)

Employment Multiplier

As indicated previously, each job in the Industry generates demand for an additional 1.7 jobs for

a total multiplier of 2.7, as illustrated in Figure 2. This industry employment multiplier is

compared with four of Denver’s largest sectors by output. Monetary authorities (subsectors of

finance and insurance) are the largest employment sector by total output ($7.3 billion), but have

a lower total employment multiplier (2.05) than the Industry. Real estate, which accounts for

Denver’s fifth largest sector by output, has a multiplier of just 1.42.

Figure 2

Comparisons of Employment Multipliers and Output


(millions) (millions) (millions) (millions)

Drilling $308.25 $3.33 $0.01 $311.58

Extraction $4,916.01 $113.36 $9.23 $5,038.60

Support Activities $414.52 $313.20 $0.56 $728.28

All Other $149.31 $405.00 $1,874.70 $2,429.01

Total $5,788.08 $834.88 $1,884.51 $8,507.47


H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\Data\[143038-IM PLAN Results Summary-M ar 5.xlsx]TABLE 6 - Output

$5,788

$7,307

$6,115

$4,486 $4,285

2.70

2.05 1.94 1.83

1.42

0

0.5

1

1.5

2

2.5

3

3.5

4

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Oil and Gas Industry Monetary authoritiesand depository credit

intermediation

Wholesale trade Air transportation Real estate

Emp

loym

ent

Mu

ltip

lier

Tota

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tor

Ou

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Source: Economic & Planning Systems


April 17, 2015


Value-Added

Value-added is a measure that approximates an industry’s contribution to gross regional product

(GRP), more specifically defined as including the total value of income generated from

production, employee compensation, payments to government (taxes), and measures of profit or

return on investment. As shown in Table 6, the Industry (direct impact) contributed $4.3 billion

in GRP, an estimated 6.7 percent of the City’s total $64.9 billion GRP.

Table 6 Oil and Gas Value-Added Impact Summary, 2014 (in millions)

Public Revenue Generation

It is estimated that the Industry directly contributed approximately $542 million in state and

local taxes in 2014, including employee compensation, taxes on production and imports (such as

severance taxes, property taxes, sales taxes, etc.), corporate taxes and other personal taxes.

As shown in Table 7, the Industry also contributes approximately $608 million in federal taxes,

including social security contributions, taxes on production and imports (such as excise taxes,

customs duty, etc.), personal income taxes and corporate profits taxes.

Table 7 Oil and Gas Public Revenue Impact Summary, 2014


(millions) (millions) (millions) (millions)

Drilling $230.60 $2.49 $0.00 $233.10

Extraction $3,660.26 $84.37 $6.87 $3,751.51

Support Activities $325.28 $245.78 $0.44 $571.50

All Other $107.51 $256.30 $1,158.45 $1,522.27

Total $4,323.67 $588.94 $1,165.77 $6,078.38


H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\Data\[143038-IM PLAN Results Summary-M ar 5.xlsx]TABLE 5 - ValueAdded

State and Local Federal Total

State and Local

Corporate Profits Tax $685,760 $12,114,081 $12,799,841

Personal Tax $89,667,499 $258,688,256 $348,355,755

Social Security Contributions $1,504,172 $255,567,928 $257,072,100

Tax on Production and Imports

Excise Taxes $0 $54,020,612 $54,020,612

Custom Duty $0 $22,366,428 $22,366,428

Severance Tax $5,130,270 $0 $5,130,270

Property Tax $196,572,400 $0 $196,572,400

Sales Tax $219,604,544 $0 $219,604,544

Other Taxes $29,075,571 $5,686,380 $34,761,951

Total $542,240,216 $608,443,685 $1,150,683,901


H:\143038-DDP Oil and Gas Industry Impacts to Downtown Denver\Data\[143038-IM PLAN Results Summary-M ar 5.xlsx]TABLE 8 - Public Revs B


April 17, 2015


Business Survey Findings

A survey of oil and gas companies with a Downtown Denver presence was fielded with the

assistance of the Colorado Oil & Gas Association between December 2014 and February 2015.

The purpose of this survey was to augment the findings of the economic impact analysis and

enhance the core set of findings with qualitative characterizations of the Industry, including

educational attainment, age distribution, non-conference oriented visitation, and charitable

contributions.

Jobs, Wages, and Office Space

Twenty two firms responded to the request for information. Most of these firms defined

themselves as directly engaged in the exploration, extraction and production of oil and gas, and

some defined themselves as pertaining to mid-stream and support activities. As illustrated in

Figure 3, the employment represented by those direct Industry establishments accounted for 35

percent (3,627) of the Industry’s total (10,446) Downtown Denver employment. These firms

also occupied a total of 1.7 million square feet of office space in Downtown Denver, representing

39 percent of Industry’s total occupied office space (4.4 million) for Downtown Denver.

Figure 3 Survey Result Overview

35%39%

22

-20

-10

0

10

20

30

40

50

-20%

-10%

0%

10%

20%

30%

40%

50%

Downtown Jobs Represented as a % of Total Direct

Industry Jobs

Occupied Office Space as a % of

Total Direct Industry Space

Survey Responses

Source: Economic & Planning Systems

3,627 jobs (of 10,446)

1.7 million sqft(of 4.4 million)


April 17, 2015


Visitation

Two types of visitation activity were considered in the analysis: (1) visitation driven by

convention activity, and (2) visitation driven by non-convention business activity, such as

affiliates in offices outside of Denver and outside of the state traveling to Downtown Denver via

air or ground. The magnitude of visitation activity for each are described below.

Convention Visitation

According to Visit Denver, convention and conference activity averaged 304,000 visitors and

535,000 room nights per year between 2004 and 2013, of which the Industry accounted for an

average of 4 percent. Visit Denver also estimates the direct economic impact of this activity to

be approximately $229 million during this period, an average of $20.8 million per year.

Business Visitation

Through the survey, EPS also collected information on business visitation activity to Downtown

Denver in 2014. As illustrated in Figure 4, information showed that activity averaged 7.4 trips

per $1 million in output, and that, extrapolating to the entire Industry, more than 42,700 trips

were made to Downtown Denver during the year. Depending on the mode of travel, trips

averaged 1.2 persons via ground or 1.8 persons via air, and average length of stay ranged from

2.0 days via ground to 3.2 days via air. In total, it is estimated that the Industry generated

more than 177,100 visitor-nights in Downtown Denver in 2014. With an average daily rate

(ADR) for Downtown Denver of $172 in 2014 (according to the Colorado Hotel and Lodging

Association’s 2014 Rocky Mountain Lodging Report and Business Travel News 2014 Corporate

Travel Index report), it is estimated that the Industry generated $30.5 million in total lodging

revenues and $4.5 million in total City and County of Denver lodging tax revenues during 2014.

EPS also estimates that with average per-diems of $125 per person (food, car, etc.), an

additional $22.1 million in spending was created during 2014, which generated an additional

$1.7 million in total sales tax revenues.

Figure 4 Business Visitation (Not Convention) Impact


April 17, 2015


Educational Attainment

The Industry is also notably different from the overall workforce by its high level of educational

attainment. According to the U.S. Census, approximately 34 percent of job-holders in the

private-sector Downtown Denver held a Bachelor’s degree or higher. According to survey

information collected from oil and gas firms located in Downtown Denver, 80 percent of the

Industry’s workforce holds Bachelor’s degrees or higher.

Age Distribution

In terms of age, the Industry’s workforce does not differ significantly from the general

distribution of workers in the City and County of Denver. According to the most up-to-date

information available at the time of this report, (U.S. Census, 2013 American Community

Survey), 32 percent of Denver’s workforce was younger than 32 years old versus 29 percent of

the Industry’s workforce. Approximately 43 percent of Denver’s workforce was between 33 and

49 years old versus 41 percent in the Industry. Nearly 25 percent of Denver’s workforce was 50

or older versus 30 percent of Industry’s workforce.

Charitable Contributions

Firms also provided information regarding charitable contributions. EPS estimated that these

contributions equaled approximately 0.5 percent of the Industry’s total output, or charitable

contributions of $27.9 million in 2014. It was not clear from the information reported by firms,

however, whether all or some portion of these contributions were made locally.


April 17, 2015


Figure 5 CBRE Downtown Denver Definition

economic impact of downtown denver oil and gas industry€¦ · findings industry definition...

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