Interim Day at the Legislature: Utah's energy economy

Energy production and development (especially fossil fuels such as coal, oil, and natural gas) are valuable parts of Utah’s economy, according to a report that the governor’s energy adviser gave to the Natural Resources, Agriculture and Environment Interim Committee. The energy industry produces thousands of high-paying jobs that are critical economic opportunities for the communities where they exist. Particularly in the case of fossil fuel production – the source of the vast majority of Utah’s energy, including electricity and heating for homes, and gasoline for cars – these jobs tend to be concentrated in rural areas, where job opportunities are limited.

The governor’s energy adviser reported that Utah had just over 10,800 oil and natural gas wells – 37 percent oil and 63 percent natural gas. Almost 75 percent of these wells are located on federal lands, meaning that Utah’s energy policy does not control these resources.

A fact shared in the committee meeting illustrates the magnitude of this problem: You could fit the land area of the entire state of Florida (roughly 34 million acres) on federal lands within Utah’s borders (about 37 million acres). In short, according to the energy adviser, a significant problem that Utah faces in the realm of energy policy is the fact that Utah doesn’t really control energy policy in much of the state due to federal lands.

Utah’s energy industry directly employs 17,500 Utahns (1.4 percent of all jobs in the state), though the governor’s office believes this number is significantly higher. A more telling fact is that the 1.4 percent of all Utah jobs directly connected to the energy industry account for 2.6 percent of total wages in the state, meaning that these jobs pay higher wages than the typical job in Utah. More directly, the average wage in the energy industry is 186 percent more than the statewide average wage.

Clearly, Utah’s energy industry is crucial to Utah’s economy and Utahns’ prosperity, especially for Utahns living in areas with limited opportunities to move up the income scale and improve their lives. Energy policy in the state is more than a numbers game. It has the potential to significantly impact – for good or for ill – the lives of Utahns and their families.