How Impacted Communities Can Challenge The Economic Assumptions Of Oil and Gas Development

A Step-by-Step Guidebook For Developing A Cost- Benefit Analysis On Colorado Oil and Gas Projects

 

In the summer of 2017, Citizens for a Healthy Community published the first-of-its-kind cost-benefit analysis of oil and gas development on Delta County revenues, which analyzed the impact of a 35-well natural gas project in the North Fork Valley on the local economy and county budget.

 

This report compared estimated County revenues generated from the project’s property taxes, federal mineral royalty revenues, and severance taxes to the impact the same project would have on existing county revenue generated from residential and agricultural property taxes, and sales taxes related to agritourism and outdoor recreation. We found a net-negative impact to County revenues could result from this project. Upon the release of that report, we heard from many other people, organizations, and communities seeking help on how to conduct similar studies on projects proposed near them. These requests led us to create a step-by-step guidebook.

 

One of the first things CHC realized when we embarked on this project was that the information necessary for this analysis is scattered, hard to access, and occasionally proprietary. In order to help others conduct a similar analysis, we consolidated all the resources and formulas we used into one place.

 

This Guidebook, will walk you through how to calculate:

  • County property taxes based on production volume, and related oil and gas equipment and facilities;
  • Federal mineral royalties revenues generated by the project, and the distribution back to your county;
  • Severance tax revenue generated by the project, and the distribution back to your county; and
  • Impacted existing county revenues such as residential and agricultural property taxes, and sales tax related to agritourism and outdoor recreation

It also discusses the lessons we learned through the process, and some tips on sharing your findings with a broader audience.

 

Click here for the Guidebook

 

Interactive spreadsheet templates are available for download for easy calculation of:

 

Click here for CHC’s Economic Impact Report that inspired this Guidebook.

 

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