SALT LAKE CITY — New research from the University of Utah indicates the state’s energy industry is among the most robust in the nation.
The Kem C. Gardner Policy Institute recently released a study showing that Utah’s energy industry supports 76,425 jobs, contributes $9.4 billion in gross domestic product and is responsible for $4.3 billion in earnings that flows into the state economy.
These significant impacts, along with Utah’s relatively low energy prices, come at a time when rapid advancements in technology and a global energy revolution are spurring new opportunities for renewable energy. Renewable electricity production in Utah has jumped 500% since 2008 — making the Beehive State the country’s fifth-largest producer of utility-scale solar energy, 4.1% of all U.S. solar power generation, the report stated.
“Energy is fundamental to the functioning of a modern economy. It enables every production process, whether of goods or services, and facilitates practically every human endeavor,” said John Downen, deputy director of economics and public policy at the Kem C. Gardner Policy Institute. “By understanding the diversity and economic impacts of our energy economy, we can be better prepared for the future as transitions in energy trends and technologies continue.”
In 2017, coal production in Utah was 40% less than in 2008 and the share of fossil fuels in electricity generation decreased from 98% to 86% during the same nine-year stretch, while renewable energy production rose fivefold, he said.
The report also found that Utah’s energy industry contributed $4.9 billion to the state’s gross domestic product — 3% of the overall total. Purchases within the energy industry also supported another 37,911 jobs, $2.3 billion in earnings and nearly $4.5 billion in state GDP. The energy industry’s total economic impacts in Utah in 2017 included 76,425 jobs, $4.3 billion in earnings and $9.4 billion in state GDP — approximately 4% of total employment, 4% of total earnings and about 6% of the state’s total GDP, Downen said.
Data showed that average annual earnings — excluding energy efficiency jobs — registered at $81,257, which exceeded the statewide average for all industries by 60%. In addition, direct energy-related royalties, severance taxes, conservation fees, property taxes and sales taxes totaled $492.1 million in 2017, according to the study.
Downen described energy generation as “oxygen” for the economy.
“Energy is essential. Without it, we would be in the Stone Age or very, very close to it. It’s something we all sort of take for granted,” he said. “It just fuels — pun intended — just about everything else that the that our economy does. You can’t have a modern economy without a reliable supply of energy.”
He noted that because Utah has such abundant natural resources, local residents pay less than many other states for their energy sources.
“Retail prices range to between about 6% and 23% below the national average depending on the user,” he noted. “If we were maintaining the same consumption level that we’re paying at national average prices, we would be paying almost $580 million more.”
He said because of the lower prices, state GDP is about 0.4% above what it would be under national average prices, while employment is about 0.3% higher and earnings are about 0.7% greater.
He noted that as society shifts away from traditional energy sources, Utah should be able to continue to thrive.
“Tastes are shifting from fossil fuels to renewables and we’re fortunate to have some pretty good renewable resources — particularly solar and geothermal,” Downen said. “So as tastes shift away from coal, in particular for electricity generation, we will be able to transition with that.”
As technology continues to advance, he said the costs of those renewable sources will continue to decline, which bodes well for Utah’s near-term economic prospects, a local analyst said.
“Too often when we talk about Utah’s nation-leading economy we fail to recognize the major contributions of Utah’s energy industry, including energy companies, leaders, workers and counties,” said Natalie Gochnour, director of the Gardner Institute. “Utah’s coal, oil, natural gas and renewable energy companies deliver low energy prices for Utah consumers, provide needed economic opportunity in rural Utah and help explain Utah’s best-in-the-country economic diversity.”