A View on the Role of Natural Gas in the U.S. Economic Future

As economists we always look toward the economy of the future and look for potential areas of change or areas that will lead in growth or will bring about changes to the economic structure. This article in U.S. News and World Report looks toward how the ongoing natural gas boom in this country could contribute to future growth and the future composition of America’s industries and infrastructure.
U.S. News and World Report

“Despite a slow recovery from the Great Recession, America is on the brink of a long-term economic boom, says author Charles Morris, former managing partner of the business consulting firm Devonshire Partners. In "Comeback: America's New Economic Boom," Morris argues that the natural gas boom will encourage investment in America's infrastructure, increase productivity and create millions of middle-class jobs". Read more

BLM land order clears way for additional solar energy development on public lands

In early July, the Bureau of Land Management (BLM) announced the withdrawal of lands identified for solar energy development in the West from new mining claims that could impede development of solar energy sites. Public Land Order No. 7818 (PLO 7818) withdraws 303,900 acres of land within 17 Solar Energy Zones in Arizona, California, Colorado, Nevada, New Mexico, and Utah.

Under the Federal Land Policy and Management Act of 1976, BLM is charged with managing the public lands for multiple uses. BLM manages more than 245 million acres of public land, land known as the "National System of Public Lands." The National System of Public Lands are primarily located in 12 Western states, including Alaska. BLM also administers 700 million acres of sub-surface mineral estate throughout the nation. BLM recently confirmed that in Fiscal Year 2012 activities on public lands generated $4.6 billion in revenue, much of which was shared with the states where the activities occurred. In addition, it reported that public lands contributed more than $112 billion to the U.S. economy and helped support more than 500,000 jobs.


In October 2012, the Department of the Interior established the Solar Energy Zones as part of a western solar plan that provides a road map for utility-scale solar energy development on lands managed by the BLM in Arizona, California, Colorado, Nevada, New Mexico, and Utah. According to BLM, the "Solar Energy Zones encompass the lands most suitable for solar energy development because of their excellent solar resources, access to existing or planned transmission, and relatively low conflict with biological, cultural and historic resources." Since 2009, BLM has approved right-of-way applications for 25 solar energy development projects with planned total capacity of over 8,000 megawatts, or enough to power over 2.4 million homes. PLO 7818 withdraws the public lands encompassed by Solar Energy Zones for 20 years from potentially conflicting uses, including mining, subject to valid existing use rights, and opens the door to additional solar energy development projects in these states. Association of Corporate Counsel

Utah mineral production drops to $3.5 billion

The value of non-fuel mineral production in Utah fell 25 percent in 2012, slipping to $3.5 billion and making the state’s mining industry the nation’s seventh largest.

Formerly No. 4 in mineral production, Utah’s output came primarily in copper, molybdenum, gold, potash and magnesium, according to the annual report released Thursday by the U.S. Geological Survey.

The survey’s National Minerals Information Center reported that the production of 90 minerals essential to the economy rose for the third straight year to $76.5 billion, an increase of $1.7 billion over the preceding year. Leading the nation was Nevada, which produced $11.2 billion in gold, copper, silver and other metals, representing about 15 percent of the nation’s mining output.

With three operations in production and a few others proposed, Utah remains a top-three potash producer. Copper production climbed 4 percent, but output dipped in Utah, the nation’s No. 2 producer.

While U.S. production and prices increased for most industrial minerals, such as limestone and silica, production of nearly all other metals declined, according to the report. Salt Lake Tribune

Governor’s energy summit highlights stark divide

Utah’s abundant coal and petroleum can be mined, processed, and shipped to market without harming the land and fouling the air and water; Gov. Gary Herbert told some 1,400 gathered Thursday at his annual Energy Development Summit.

The message expressed was in stark contrast with views expressed outside the building, where about 150 protesters argued Utah’s political leaders are selling the state’s world-class landscape to extractive industries looking to exploit fossil fuels.

The crowd of protesters gathered outside the Salt Palace at midday to protest the summit’s focus on fossil fuel-based energy, including tar sands, oil shale and nuclear power. They also promoted renewable alternatives that would mean less impact on the air quality, water resources, public health and climate change, which scientists say is already taking a toll on the snowpack.

Underlying the two views that clashed Thursday at the summit are two opposing resource bases that support Utah’s economic prospects — vast deposits of hydrocarbons and a natural landscape of unparalleled beauty.

One creates high-paying industry jobs, helps meets the nation’s energy needs, and expands local tax bases. The other attracts high-spending tourists, outdoor enthusiasts and creative people key to building a knowledge-based economy.

Utah’s congressional delegation argued federal bureaucrats unnecessarily impede Utah’s ability to develop energy sources within its borders.

Despite these problems, political leaders conceded energy production in Utah is at a 24-year high and growing, driven largely by new technologies that can tap oil and gas in previously unreachable places. The state issued 2,103 drilling permits last year, setting a new record.

The summit continues Friday at the Salt Palace. Salt Lake Tribune

The Energy Industry in America

“It’s an exciting time to be in the energy industry in America. The impact of unconventional oil and gas development on the U.S. economy is considerable.” The development of fracking and its releasing of previously trapped oil and gas has completely changed the outlook and the language surrounding America’s energy needs. Overnight the talk has gone from not having enough, to having enough to share with the world. Forbes

Projections Show Promising Job Fields in Utah

With Utah’s employment growth currently running at 2.3 percent, the outlook for the remainder of this decade looks slightly better; averaging about 2.4 percent per year. The national employment growth rate is at 1.4 percent.

The Utah Department of Workforce Services has released new occupational projections that are summarized in the Fall 2012 publication of Trendlines. Some highlights in the report:

• Healthcare-related occupations continue to lead the way. Of note, however, is the fact that many of these expanding jobs are in the support area, which typically pays lower-than-average wages.
• Occupations in computer-related fields still provide good employment opportunities and wages.
• Construction and mining areas indicate strong growth rates.
• Even declining occupations will have job openings due to the need to replace retiring workers.
• Approximately 20 percent of jobs in 2020 will require at least a bachelor’s degree, representing the fastest growth category for the remainder of this decade.
• Production, transportation/material moving and installation/maintenance/repair occupations should also have continued growth.

DWS also provides occupational information using a “star” system, rating each occupation from zero to five stars. The ratings take into consideration employment outlook as well as wages. Five stars represent the strongest employment outlook and high wages, with zero stars representing limited employment outlook and low wages. This information can be found at http://jobs.utah.gov/ under “Labor Market Information.” http://jobs.utah.gov/wi/.

These occupational projections can be valuable for those making career decisions as well as for educational and training institutions as they do their best to prepare students for good jobs with good pay.

With Hostess announcing its closing, 650 Utah workers will be looking for work, as companies such as Lofthouse and several other large commercial bakeries are accepting applications. For those displaced workers wishing to change occupations, the occupational projection information provided at DWS can be extremely valuable.

The Ogden-Weber Tech College continues to offer training in business and information technology, construction, healthcare, manufacturing and service occupations.

For military veterans, it is noteworthy that The Military Times ranked the Ogden-Weber Tech College number 16 in the nation as “Best for Vets” in a review of colleges.

The Ogden-Weber Tech College also provides customized training for employers to upgrade the skills of their workers in order to remain current with new technologies and business practices.

While the recent recession significantly hurt employment growth, the outlook for the remainder of this decade, especially here in Utah, looks promising. Standard Examiner

Shale Gives US One More Shot

This is a very good big-picture article from the Australian Financial Review concerning the emerging shale gas boom going on in America and its long term economic impact and benefits.

JPMorgan chief Jamie Dimon was ticking off the things America had going for it in these troubled times when he realized he’d left something out. “Oh yeah, we’ve just been given another gift, called shale oil,” he told guests at a Council on Foreign Relations luncheon in Washington last week. “I mean, God looked down upon us and said, ‘I know you wasted all that energy bounty, let me give you one more shot’.”

Dimon didn’t overstate shale’s impact on the struggling US economy. Cheap abundant energy from shale rocks is the chance America seized while its economy healed and the rest of the world dithered.

Shale gas has slashed energy prices in the US, sparked a revival in petrochemicals and manufacturing, pushed coal aside as the top source of power and created 1 million jobs. And it’s helped put the world’s most energy-hungry economy on track to meet its Kyoto emissions reduction targets, without even signing up. Read more: Financial Review

University of Utah Creates Mine-safety Center

University President David Pershing says the Center for Mining Safety and Health Excellence brings together academic disciplines in the College of Mines and Earth Sciences.

The Utah State Board of Regents approved the center's mission earlier this month. The center will work with industry, government, nongovernmental organizations and labor unions to improve mining safety and health standards.

Associate Professor Tom Hethmon will head up the new center. Hethmon holds the Western Mining Presidential Endowed Chair in Mine Safety.

The endowed chair resulted from a recommendation of former Gov. Jon Huntsman's Utah Mine Safety Commission following the 2007 Crandall Canyon disaster, which killed six miners and three rescue workers. Bloomberg Businessweek

Utah refinery growth promises jobs, revenue, but at what cost?

Improved technology and higher oil prices for the first time are making it economically feasible for oil refineries to tap more of Utah’s large reserves of crude oil as thick as boot polish, potentially bringing jobs and millions in revenue to the state.

Upgrades proposed or under way at three of the state’s five refineries will enable them to process three times the amount of the paraffinic-based crude, commonly called black or  yellow wax petroleum, as they could six years ago.

But development will come at a cost.

Boosting production capacity could also increase certain environmental risks, based on refinery safety records over the past decades. Hundreds more oil tankers are expected to travel the 170 miles from the rich oil fields in eastern Utah to the refinery row that straddles the Salt Lake and Davis county lines, negatively impacting air quality, neighborhoods and traffic. Salt Lake Tribune

2012 Utah Legislature Highlights for Businesses

After 45 days, the legislative session has come and gone and in its wake Utah businesses must decipher the most important points from the hundreds of bills passed, blocked, introduced and circled this year. The Legislative highlights for businesses from the 2012 Utah Legislature include:

Gains in Tourism Marketing Appropriations: According to the Utah Office of Tourism, tourism accounts for $6.5B of Utah's gross domestic product, employs 122,000 people and reduces Utah household's tax burden by $1,000 through tourism taxes paid to state and local governments.

DABC Restructuring Laid Out: Along with adding two more commissioner positions and providing more oversight over the director's position, legislators passed a bill that would study alcohol use in Utah that may provide better information in forming alcohol-related laws in the future.

S.B. 66 and H.B. 354 passed and are currently awaiting Gov. Herbert's signature.

Ski Interconnect Supported: The Utah Senate passed a resolution in support of any ski interconnect project that would link resorts. The bill expresses support for low-impact interconnection of the seven resorts in Salt Lake County and Summit County to enhance the ski and snowboard industry's contribution to Utah's economy, jobs, and tax base.

S.C.R. 10 passed and is currently awaiting printing.

Environmental Boards Revamped: The Utah Department of Environmental Quality was revamped by legislators in S.B. 21, shifting certain controls and responsibilities away from the five boards that address air quality, radiation control, water quality, drinking water and solid and hazardous waste, the five boards that currently deal with permitting and rule making. The legislation was developed by the Utah Manufacturers Association and the Utah Mining Association with the hopes that businesses would be able to move through the permitting process more quickly.

S.B 21 passed and is awaiting enrollment from the Legislative Research and General Counsel. Park Record

Utah oil, gas production tops 10K wells

State regulators say that for the first time in history Utah has more than 10,000 producing oil and gas wells. Utah's Division of Oil, Gas and Mining records show there are more than 3,600 oil wells and more than 6,300 gas wells currently operating statewide. Ogden Standard-Examiner

BLM reconsiders acreage for oil shale, tar sands

The Bureau of Land Management will conduct a “fresh” study to determine how much public acreage to open to potential oil shale and tar sands development, the agency announced Wednesday.

In 2008, under the Bush administration, the agency amended eight area management plans in Utah, Colorado and Wyoming to open about 1.9 million acres for oil shale development and more than 430,000 acres for tar sands. With technological issues still leaving development of the resources in question, industry has taken little action since then. The BLM called its new environmental study “a fresh look at what public lands are best suited” for development. Salt Lake Tribune

Utah can claim millions to close abandoned coal mines

Utah is eligible to receive $4.2 million from the Department of Interior to close abandoned coal mines. Interior Secretary Ken Salazar announced that more than $395 million in grants is being made available to eligible coal-producing states and Native American tribes. Utah is among 25 states in the country that can use the funding to eliminate safety hazards and generate jobs by closing old mines. State officials estimate there are 17,000 abandoned mines in Utah. Deseret News