Oil drilling

A rig operates in the vicinity of existing oil wells last May in the Powder River Basin. According to some state experts, the economy in Wyoming is growing.

Wyoming energy continues to drive improvements for an economy that was greatly weakened by the two-year downturn in the coal, oil and gas industries, according to a monthly economic snapshot.

A number of positive signs, like energy spending and added jobs, show an expanding economy, said Jim Robinson, principal economist at the state’s Economic Analysis Division and author of the March MACRO report released Tuesday.

Expansion is needed. Wyoming’s state and local coffers continue to suffer from sharp decline in energy dollars in recent years. As far as people go, Wyoming has counted the losses. Recent data revealed that the downturn caused Wyoming’s steepest population drop since 1989. The number of unemployed people searching for positions declined and the total number of able-bodied Wyomingites available to work contracted.

The labor force is expected to continue shrinking into 2018, some say, despite the moderate increase each month of rig workers in the oil and gas fields.

“The labor force? That’s still contracting. That’s getting smaller,” Robinson said. “We’ve been steadily improving ... But it’s only been one hundred or two hundred a month (for oil and gas jobs).”

The numbers

Total employment in the state was up 4,700 jobs in February compared to the same time last year, according to the report. Much of that increase was in the mining sector, where 2,100 jobs were picked up. Oil and gas specifically gained 1,400, a result of the steady price for crude oil over the latter half of 2017. Construction was the only private sector to lose numbers, down 300 year-over-year.

As skies clear over the energy industries, state revenues are up as well compared to 2017.

In the last nine months, sales and use tax collections have grown by nearly 19 percent. Those taxes mean people and companies are spending money again.

Converse County, a hub for oil and gas activity in recent months, saw the greatest sales and use tax increase, up by $15.2 million compared to the previous year. Severance tax collection on the extractive industries was also up between mid-2017 and the present by nearly 10 percent.

These improvements have had a positive impact on both housing and personal income in places like Casper and Cheyenne, according to the report. However, those hubs have had disparate experiences when it comes to jobs: Casper gained 500 and Cheyenne lost 100.

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A note of caution

As an industry state, Wyoming should be cautious when counting its chickens when it comes to recently added jobs, some argue.

Tom Gallagher, former lead economist of the Research and Planning division of Wyoming’s Department of Workforce Services, said Wyoming’s industry job numbers can hide a large number of commuters from other states — people who may be improving the overall count of miners or oil and gas workers, but who live and spend their income in the economies of neighboring states like Colorado or South Dakota.

“Wyoming’s labor market is very dynamic when it comes to short-term (daily) commuting and commuting with longer stays, and it’s complicated,” he said in a recent email. “The front range is evolving, expanding, and becoming more integrated across the Colorado—Wyoming border. Development is neither steady nor linear.”

The commuter effect impacts both sides of the border, said Robinson of the Economic Analysis Division. When the Bakken oil field in North Dakota boomed a few years back, state economists were aware of a number of central Wyoming residents commuting north to work in the oil patch, said Robinson.

How big of an impact commuters have on the total job picture is less clear. Wyoming’s Research and Planning Department has been investigating that segment of the population for a number of years.

However, for Robinson, Wyoming’s current picture is better understood by looking at the direction of numbers over time.

“I think you get a better idea of what’s going on in Wyoming when you look at the trends,” he said. “That’s the bigger picture.”

The number of oil rigs drilling has hit a three-year high. Drilling activity is pulling in new employees. From the mining sector’s employment to the economic picture of hubs like Casper and Cheyenne, Wyoming is gaining distance from the bottom of the downturn, he said.

“I think what we have at this point is a measured recovery,” he said.

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Follow energy reporter Heather Richards on Twitter @hroxaner


Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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