The focus of the following analysis is on the resource activities most likely to be affected by land management decisions, including oil and gas, livestock grazing, and recreation. Management of resource programs or constraints (as described in the alternatives) that affect oil and gas, livestock grazing, and recreation (e.g., surface-disturbing activities that affect the amount of land available for grazing) are included in the analysis. Also included are restrictions on ROWs and corridors, since the BLM’s RFD for oil and gas, which provides estimated numbers of oil and gas wells and production, incorporates the restrictions on ROWs and corridors. Restrictions on new ROWs would tend to be a negligible factor in the decision to develop additional oil and gas wells in fields that are already producing, but may be an important factor in a decision to develop a new field.
Economic impacts related to other resources, such as locatable and salable minerals and renewable energy, are addressed outside the framework of the IMPLAN model. Impacts to economic conditions related to renewable energy management actions are described below for each alternative. For locatable and salable minerals, the BLM expects to meet market demand and respond to applications so that the production of these minerals would not vary across the alternatives being considered. Thus, the sections below on impacts under each alternative do not include earnings, jobs, or output related to locatable or salable minerals, such as bentonite. This does not mean production of these minerals or other activities not modeled in IMPLAN are unimportant (e.g., see Section 3.8.2 Economic Conditions in Chapter 3 for information on current employment and payroll from bentonite mining and processing). For more information on minerals, refer to Section 4.2.1 Locatable Minerals and Section 4.2.7 Salable Minerals.
Under all alternatives, the BLM generally expects to meet market demand and respond to applications for locatable minerals and mineral materials and does not anticipate that the production of these minerals would vary across the alternatives being considered. The different alternatives include varying restrictions on mineral entry and mineral materials disposal; however, restrictions may have a minor impact on overall economic conditions compared to current conditions.
Changes in economic activity have impacts on federal, state, and local tax revenues. While all sectors of the economy contribute to tax revenues, the analysis of tax revenue impacts focuses on oil and gas production because almost all of the measurable variation in economic activity among alternatives is related to oil and gas.
The focus of this analysis is on regional earnings and output, employment, and tax revenue, with the region defined as the four-counties in the Planning Area. The IMPLAN model is run at a regional (multi-county) scale, with the mathematical relationships that describe linkages between sectors aggregated to the four-county level. Because of this mathematical aggregation, it is not possible to identify total economic impacts for an individual community. For additional information on the structure of the IMPLAN model and specific assumptions made for the economic modeling analysis, refer to Appendix X, Economic Impact Analysis Methodology.
Based on the IMPLAN model, regional earnings under Alternative A for the modeled sectors (oil and gas, grazing, and recreation) would average approximately $75 million per year between 2007 and 2028, and regional output would average approximately $511 million per year, resulting from development and activities on BLM-administered land and mineral estate. The net present value of the stream of regional output, discounted at a 7 percent real discount rate (OMB 1992), would be approximately $5.8 billion over 20 years. Table 4–22 summarizes and compares sector-level breakouts for earnings and output by alternative.
Alternative A would maintain the current management approach of permitting renewable energy development on a case-by-case basis. This may result in adverse impacts by increasing uncertainty for individual firms considering developing renewable energy in the Planning Area.
The BLM generally expects to meet market demand for locatable minerals and mineral materials and respond to applications consistent with current management. Alternative A would maintain the current management approach with respect to leasing of BLM-administered lands for exploration and development, and may have little to no change compared to current conditions.
The BLM generally expects to meet market demand for locatable minerals and mineral materials and respond to applications consistent with current management. Alternative A would maintain the current management approach with respect to leasing of BLM-administered lands for exploration and development, and may have little to no change compared to current conditions.
Table 4.22. Average Annual Impacts on Earnings and Output, by Sector and Alternative for the Planning Area
| Sector | Alternative A | Alternative B | Alternative C | Alternative D |
|---|---|---|---|---|
| Impacts on Annual Average Earnings (millions of 2008 $) | ||||
| Oil and Gas | $66.5 | $29.9 | $74.9 | $62.2 |
| Livestock Grazing | $5.7 | $4.1 | $5.6 | $5.7 |
| Recreation | $2.9 | $2.9 | $2.9 | $2.9 |
| Total2 | $75.0 | $36.9 | $83.4 | $70.8 |
| Impacts on Annual Average Output (millions of 2008 $) | ||||
| Oil and Gas | $481.2 | $216.5 | $542.2 | $450.6 |
| Livestock Grazing | $19.0 | $13.7 | $18.9 | $19.0 |
| Recreation | $11.1 | $11.1 | $11.1 | $11.1 |
| Total2 | $511.3 | $241.3 | $572.3 | $480.8 |
| Impacts on Net Present Value of Output Over 20 Years (millions of 2008 $)1 | ||||
| Oil and Gas | $5,483.5 | $2,467.0 | $6,178.8 | $5,135.8 |
| Livestock Grazing | $201.5 | $157.0 | $200.8 | $201.4 |
| Recreation | $114.9 | $114.9 | $114.9 | $114.9 |
| Total2 | $5,799.9 | $2,738.9 | $6,494.5 | $5,452.1 |
Source: Calculated using the IMPLAN model, as described in the text.
1 Net present value from 2007 to 2028, discounted at 7 percent (rate from OMB 1992).
2 Due to rounding, totals may not be additive.
| IMPLAN | Impact Analysis for Planning model |
Employment is a function of the level of economic activity (sales and purchases) among economic sectors. Thus, employment impacts are closely related to impacts on economic output. An increase in output implies an increase in employment and vice versa.
Based on the IMPLAN model, regional employment under Alternative A for the modeled sectors would average approximately 1,465 jobs per year between 2007 and 2028 due to activities on BLM-administered lands and mineral estate. The number of jobs is expressed as “annual job equivalents,” where one annual job equivalent (AJE) represents 12 months of employment. For example, one AJE could represent two jobs for 6 months each, or one job for 12 months. AJEs may represent either full-time or part-time jobs. Table 4–23 provides a comparison of jobs by sector under the alternatives.
Average annual earnings per job would differ for each of these sectors, but would be the same under all alternatives. Based on the IMPLAN model, earnings per job (expressed in year 2008 dollars) would average:
Between $52,000 and $62,000 for jobs in oil and gas well drilling and completion.
Approximately $58,000 for jobs in oil and gas production.
Approximately $30,000 for jobs associated with cattle and sheep grazing.
Between $18,000 and $19,000 for recreation-related jobs.
Table 4.23. Average Annual Impacts on Employment, by Sector and Alternative for the Planning Area
| Number of Jobs 1 | ||||
|---|---|---|---|---|
| Sector | Alternative A | Alternative B | Alternative C | Alternative D |
| Oil and Gas | 1,121 | 505 | 1,263 | 1,050 |
| Direct | 578 | 260 | 651 | 541 |
| Indirect & Induced | 543 | 245 | 612 | 509 |
| Livestock Grazing | 186 | 134 | 185 | 186 |
| Direct | 106 | 77 | 106 | 106 |
| Indirect & Induced | 80 | 57 | 79 | 80 |
| Recreation | 158 | 158 | 158 | 158 |
| Direct | 131 | 131 | 131 | 131 |
| Indirect & Induced | 27 | 27 | 27 | 27 |
| Total2 | 1,465 | 796 | 1,606 | 1,393 |
| Direct | 815 | 467 | 887 | 778 |
| Indirect & Induced | 650 | 329 | 719 | 616 |
Source: Calculated using the IMPLAN model, as described in the text.
1Number of jobs is in annual job equivalents (AJE), where one AJE represents 12 months of employment. For instance, one AJE could represent one job for 12 months, or two jobs for 6 months.
2Due to rounding, totals may not be additive.
| IMPLAN | Impact Analysis for Planning model |
Table 4-24 provides information on employment, disaggregated by economic sector, that would be associated with activities on BLM-administered land in each alternative. In each table cell, the first figure is the comprehensive impact (including indirect and induced impacts from related sectors) and the second figure, in parentheses, is the direct impact only. In all alternatives, mining is the sector with greatest employment, most of it directly related to activities on BLM land. The other leading sectors are arts, entertainment, and recreation services; agriculture and agricultural services; retail trade; construction; and business services. With the exception of business services, all of these sectors would see contributions from both direct and indirect/induced activity.
Table 4.24. Average Annual Impacts on Employment, by Subsector and Alternative for the Planning Area
| Number of Jobs 1 Total Contribution (Direct Contribution) 2 | ||||
|---|---|---|---|---|
| Sector | Alternative A | Alternative B | Alternative C | Alternative D |
| Agriculture & Agricultural Services | 140 (106) | 100 (77) | 139 (106) | 139 (106) |
| Mining (includes oil and gas services) | 517 (503) | 233 (227) | 582 (567) | 484 (471) |
| Utilities | 6 (0) | 3 (0) | 6 (0) | 5 (0) |
| Construction | 104 (32) | 48 (14) | 117 (36) | 98 (30) |
| Manufacturing | 12 (1) | 6 (1) | 13 (1) | 11 (1) |
| Wholesale Trade | 47 (27) | 22 (12) | 53 (30) | 44 (25) |
| Retail Trade | 123 (32) | 78 (32) | 133 (32) | 118 (32) |
| Transportation & Warehousing | 21 (0) | 10 (0) | 23 (0) | 20 (0) |
| Information | 10 (0) | 6 (0) | 12 (0) | 10 (0) |
| Finance & Insurance | 29 (0) | 14 (0) | 32 (0) | 27 (0) |
| Real Estate & Rentals | 56 (22) | 28 (10) | 62 (24) | 53 (20) |
| Business Services (e.g., administrative) | 97 (0) | 48 (0) | 108 (0) | 92 (0) |
| Social Services | 66 (0) | 33 (0) | 73 (0) | 62 (0) |
| Arts/Entertainment/Recreation Services | 156 (83) | 120 (83) | 163 (83) | 152 (83) |
| Other Services | 67 (13) | 41 (13) | 73 (13) | 64 (13) |
| Institutions | 15 (0) | 7 (0) | 17 (0) | 14 (0) |
Source: Calculated using the IMPLAN model. Due to rounding, totals may not match exactly the totals reported in other tables in this section.
1Number of jobs is in annual job equivalents (AJE), where one AJE represents 12 months of employment. For instance, one AJE could represent one job for 12 months, or two jobs for 6 months.
2The total contribution includes indirect and induced economic activity from related sectors (i.e., “upstream” and “downstream” sectors that supply materials and labor, or benefit from spending by workers in the sectors directly affected). For more information see the economic model description in the text.
| IMPLAN | Impact Analysis for Planning model |
Projected tax revenues for Alternative A resulting from oil and gas production on BLM-administered mineral estate would average $40.8 million per year for federal royalties, $19.6 million per year for state severance taxes, and $22.6 million per year for local ad valorem taxes. Because specific well locations are not known at this time, there is not sufficient data to apportion the local tax receipts to individual counties. Table 4–25 provides a summary and comparison of tax revenues from oil and gas production for the alternatives.
Table 4.25. Estimated Oil and Gas Tax Revenues by Alternative for the Planning Area (millions of 2008 $)
| Tax Type | Alternative A | Alternative B | Alternative C | Alternative D |
|---|---|---|---|---|
| Federal mineral royalties | $40.8 | $18.3 | $45.9 | $38.2 |
| State severance taxes | $19.6 | $8.8 | $22.1 | $18.3 |
| Local ad valorem production taxes | $22.6 | $10.2 | $25.5 | $21.2 |
| Total1 | $83.0 | $37.3 | $93.5 | $77.7 |
Source: Calculated based on the IMPLAN model and state, federal, and local tax rates, as described in the text.
1Due to rounding, totals may not be additive.
IMPLAN Impact Analysis for Planning model
Based on the IMPLAN model, regional earnings under Alternative B for the modeled sectors (oil and gas, grazing, and recreation) would average approximately $37 million per year between 2007 and 2028, and regional output would average approximately $241 million per year, due to activities on BLM-administered land and mineral estate. The net present value of the stream of regional output, discounted at a 7 percent real discount rate (OMB 1992), would be approximately $2.7 billion over 20 years. Table 4-22 summarizes and compares sector-level breakouts for earnings and output by alternative.
Under Alternative B, 1,251,869 acres are renewable energy exclusion areas and an additional 1,691,497 acres are managed as avoidance/mitigation areas. Approximately 246,000 acres (7.7 percent of the Planning Area) would be open to renewable energy development. Alternative B could increase development in areas open to renewable energy development compared to Alternative A, since it would decrease uncertainty for firms considering developing renewable energy in the Planning Area. However, since there would be restrictions on renewable energy development in 90 percent of the Planning Area there would be less economic activity associated with renewable energy development under Alternative B compared to alternatives C and D.
Alternative B would limit or restrict the amount of land open to exploration and development of these minerals more than the other alternatives. However, restrictions may have a minor impact on overall economic conditions compared to current conditions.
Based on the IMPLAN model, regional employment under Alternative B for the modeled sectors would average approximately 796 jobs per year between 2007 and 2028 due to activities on BLM-administered land and mineral estate. Alternative B would result in the least number of jobs compared to the other alternatives. Table 4-23 provides a comparison of jobs by sector under the alternatives.
Projected tax revenues for Alternative B resulting from oil and gas production on BLM-administered mineral estate would average $18.3 million per year for federal royalties, $8.8 million per year for state severance taxes, and $10.2 million per year for local ad valorem taxes. Because specific well locations are not known at this time, there is not sufficient data to apportion the local tax receipts to individual counties; however, the restrictions on oil and gas development under Alternative B affect broad areas of land throughout the Planning Area, so the reductions in tax revenues (relative to Alternative A) would affect virtually all communities that currently produce oil and gas. Table 4-25 provides a summary and comparison of tax revenues from oil and gas production for the alternatives. Implementation of Alternative B would result in the least amount of estimated oil and gas tax revenues compared to the other alternatives.
Based on the IMPLAN model, regional earnings under Alternative C for the modeled sectors (oil and gas, grazing, and recreation) would average approximately $83 million per year between 2007 and 2028, and regional output would average approximately $572 million per year, due to activities on BLM-administered land and mineral estate. The net present value of the stream of regional output, discounted at a 7 percent real discount rate (OMB 1992), would be approximately $6.4 billion over 20 years. Table 4-22 summarizes and compares sector-level breakouts for earnings and output by alternative.
Under Alternative C, approximately 151,506 acres renewable energy exclusion areas and 1,612,402 acres are avoidance/mitigation areas. Approximately 1.4 million acres (44 percent of the BLM-administered surface in the Planning Area) would be open to renewable energy development. Management of renewable energy under Alternative C could increase development compared to alternatives A and B, since it would reduce restrictions and open more area to renewable energy development. Similar to alternatives B and D, allocation of areas open to renewable energy could also increase renewable energy development by decreasing uncertainty for firms considering developing renewable energy in the Planning Area.
Alternative C would increase the amount of land open to exploration and development of locatable minerals and would slightly decrease the amount of land open to exploration and development of salable minerals compared to Alternative A (refer to Section 4.2 Mineral Resources). However, decreased restrictions and more areas open to mineral development may only have a minor impact on the regional economic conditions compared to current conditions.
Based on the IMPLAN model, regional employment under Alternative C for the modeled sectors would average approximately 1,606 jobs per year between 2007 and 2028 due to activities on BLM-administered land and mineral estate. Alternative C would result in the greatest number of jobs compared to the other alternatives. Table 4-23 provides a comparison of jobs by sector under the alternatives.
Projected tax revenues for Alternative C resulting from oil and gas production on BLM-administered surface would average $45.9 million per year for federal royalties, $22.1 million per year for state severance taxes, and $25.5 million per year for local ad valorem taxes. Because specific well locations are not known at this time, there is not sufficient data to apportion the local tax receipts to individual counties. Table 4-25 provides a summary and comparison of tax revenues from oil and gas production for the alternatives. Implementation of Alternative C would result in the greatest estimated oil and gas tax revenues compared to the other alternatives.
Based on the IMPLAN model, regional earnings under Alternative D for the modeled sectors (oil and gas, grazing, and recreation) would average approximately $71 million per year between 2007 and 2028, and regional output would average approximately $481 million per year, due to activities on BLM-administered land and mineral estate. The net present value of the stream of regional output, discounted at a 7 percent real discount rate (OMB 1992), would be approximately $5.5 billion over 20 years. Table 4-22 summarizes and compares sector-level breakouts for earnings and output by alternative.
Under Alternative D, 294,345 acres are renewable energy exclusion areas, and 2,501,876 acres are avoidance/mitigation areas. Approximately 393,593 acres (12 percent of the Planning Area) would be open to renewable energy development. Similar to alternatives B, C and D, allocation of areas open to renewable energy development under Alternative D could increase development in areas open to renewable energy since it would decrease uncertainty for firms considering developing renewable energy in the Planning Area.
Alternative D would increase the amount of land open to exploration and development of locatable minerals and the amount of land open to exploration and development of salable minerals compared to Alternative A (refer to Section 4.2 Mineral Resources). However, decreased restrictions and more areas open to mineral development may have only a minor impact on economic conditions compared to current conditions.
Based on the IMPLAN model, regional employment under Alternative D for the modeled sectors would average approximately 1,393 jobs per year between 2007 and 2028 due to activities on BLM-administered land and mineral estate. Table 4-23 provides a comparison of jobs by sector under the alternatives.
Projected tax revenues for Alternative D due to oil and gas production on BLM-administered surface would average $38.2 million per year for federal royalties, $18.3 million per year for state severance taxes, and $21.2 million per year for local ad valorem taxes. Because specific well locations are not known at this time, there is not sufficient data to apportion the local tax receipts to individual counties. Table 4-25 provides a summary and comparison of tax revenues from oil and gas production for the alternatives. Implementation of Alternative D would result in more estimated oil and gas tax revenues than Alternative B, but less than alternatives A and C.