RBC | Colorado was the source of nearly $400 million in federal energy and other natural resource revenue in the recently concluded 2022 federal fiscal year, with natural gas development in Garfield County alone accounting for about a quarter of that revenue.
According to Department of Interior Office of Natural Resources Revenue data, Colorado accounted for about $393 million in federal natural resources revenue during the fiscal year. Natural gas revenue was responsible for about $173.6 million of that total, followed by oil, at about $98.6 million; carbon dioxide, at $43 million; natural gas liquids, at $34.6 million; coal, $22.4 million, and other sources, about $21 million.
Garfield County alone was responsible for $98.7 million of federal natural gas revenue during the fiscal year.
Most of the Colorado revenue, more than $371 million, consisted of federal royalties on production involving federal minerals underlying federal land, or other lands in the case of split estates. Among other sources of revenues are the amounts paid by winning bidders for natural resource leases, and annual rent paid on those leases.
The federal data doesn’t reflect oil and gas production in the state as a whole.
Much of statewide production involves private lands and privately owned minerals. While more than a third of the state is on federal land, much of that land is in western Colorado, overlapping Garfield and other counties with high natural gas production.
Next behind Garfield County in federal natural gas revenue generated during the last fiscal year was Rio Blanco County, which accounted for $38.3 million in revenue. Mesa County accounted for $8.45 million in federal natural gas revenue; Moffat County, $4 million; and Gunnison County, $2 million.
Chelsie Miera, executive director of the West Slope Colorado Oil and Gas Association, said the contributions of natural gas development in local counties to federal natural gas revenues is “very significant.”
“I think it’s exciting that we’re seeing natural gas be that leader. We talk about a cleaner resource and natural gas is that. I think it just shows the opportunity for western Colorado to provide a lot of our, whether it’s regional or global energy needs, cleaner than anywhere else in the world.”
Most of the federal oil revenues in Colorado during the fiscal year came from Weld County, at $72.1 million. Rio Blanco County accounted for $16.9 million, and Garfield County, $5.3 million.
Federal natural resource revenue generated in Colorado jumped significantly from the 2021 fiscal year, when about $240.3 million was generated, including about $95.5 million in natural gas revenue and $56 million in oil revenue. Rising oil and gas prices contributed to the big jump in revenues in the state this year, as federal royalty revenues tied to the value of production likewise rose.
According to the federal Energy Information Administration, at the end of November the spot price for natural gas price at the Henry Hub distribution point in Louisiana was about $6.80 per million British thermal units. The price was below $3 for part of 2021 before rising to close to $10 earlier this year.
The Interior Department last month said the Office of Natural Resources Revenue disbursed $21.53 billion in revenues generated in fiscal year 2022 from energy production on federal and tribal onshore lands, and federal offshore areas, including a record $4.37 billion generated from a New York offshore wind lease sale. The disbursements included the highest-ever revenues from renewable energy programs on federal lands and waters, which Interior said was driven by President Biden’s efforts to jump-start the American offshore wind industry and make the country a magnet for clean energy investments.
The overall disbursement was the second-largest since 1983. Some $10.6 billion went to the U.S. Treasury, $3.32 billion to a reclamation fund; about $1 billion to the Land and Water Conservation Fund; and $460 million to federal agencies. The Office of Natural Resource Revenue disbursed $4.36 billion in fiscal year 2022 funds to 33 states, based on federal revenue collected from oil, gas, renewable energy and mineral production within the states’ borders or nearby offshore waters.
Colorado ranked fourth in disbursements, at $142.6 million. New Mexico received the most, at $2.74 billion, followed by Wyoming, $785.7 million, and North Dakota, at $163.6 million.
Colorado uses some of its share of federal royalties, along with state severance taxes on energy and mineral production, for grants to political subdivisions impacted by energy development. Some federal lease revenues also are distributed locally through a direct distribution formula based on mineral production within a county and its proportional level of generation of those revenues.
According to the Colorado Department of Local Affairs, federal mineral lease direct distributions by the department during the 2022 program year totaled nearly $25 million to counties and municipalities, and more than $2 million to schools.
These direct distributions included distributions of nearly $4.2 million to the Garfield County Federal Mineral Lease District, and some $725,000 to Mesa County’s district. These districts distribute funds locally through grants.
Originally published in the Dec. 8, 2022 edition of the Grand Junction Sentinel. Reprinted with permission.
BY DENNIS WEBB – [email protected]
Special to the Herald Times
