Study shows fossil fuel development costs taxpayers

By Natasha LEGER


By Natasha Leger
Interim Director, Citizens
for a Healthy Community

A proposed oil and gas development in Colorado's North Fork Valley would be a net loss for local taxpayers and could negatively impact a regional economic hub by driving down property values and sales tax revenues, according to a new study.

In an updated economic analysis, Citizens for a Healthy Community shows Delta County taxpayers would see an estimated loss of up to $400,000 a year from the development. County revenues from the property tax, state severance tax revenues and federal mineral royalties from the proposed 20,000-acre project would be far outweighed by the potential loss of property and sales tax revenues to local agricultural and outdoor recreation businesses, harmed by natural gas wells, pipelines, roads and other industrial infrastructure.

"The oil and gas industry routinely inflates the economic benefits of their developments. This is why it's so important that our elected officials independently calculate the costs and benefits of proposed projects" said David Inouye, chair of the CHC board of directors. "Taxpayers and local businesses in our communities have a right to clean air and water. This study shows that the current policy of encouraging development would actually cost the county money while the fossil fuel companies reap the financial benefits. And we haven't even taken the health risks of this activity into account yet."

The new study, "Economic Impact of Natural Gas Development on Delta County," found that Delta County would receive about $70,000 a year in severance tax revenues and federal mineral royalties. That's a far cry from the millions of dollars some industry representatives claim the county would reap annually from a proposed 35-well project north of Paonia.

But the proposed development, sought by Gunnison Energy, could cost Delta County an estimated $810,000 in lost property and sales tax revenues from agritourism and outdoor recreation industries harmed by oil and gas development in the area, the report shows. Property tax revenues from the project, associated equipment and pipelines would bring in less than half of that, at roughly $370,000.

CHC has also released a guidebook on how to conduct a cost-benefit analysis to help other communities follow the money and challenge the economic benefits claimed by the fossil fuel industry and local governments.

The CHC study shows that these projects are not the economic boon that the fossil fuel industry claims. The North Fork Valley is nationally recognized for its agritourism and outdoor recreation. It has been successfully transitioning away from extractive industries, with a local economy built on organic and sustainable agriculture, recreation, creative arts, ranching and tourism. Delta County's 1,250 farms and wineries generate more than $55 million in sales. Outdoor recreation has an economic impact of $36 million a year in Delta County. Together outdoor recreation, agriculture and agritourism contribute more than $3 million a year to Delta County in sales and property taxes.

"We've always known that oil and gas is not compatible with our region," said Jeff Schwartz, who owns Big B's and Delicious Orchards. "Now we know this project doesn't live up to the economic promises made to Delta County. It's high time that our elected officials start doing their due diligence and stop shoving these projects down our throats."

Citizens for a Healthy Community (CHC) is a grassroots nonprofit organization dedicated to protecting the air, water and foodsheds of Delta County, Southwest Colorado from the impacts of oil and gas development. CHC is located in the North Fork Valley of Colorado, which is home to the largest concentration of organic farms in the state. Learn more at chc4you.org.