Low Gas Prices Help Consumers, Hurt Utah's Energy Industry
Gas prices are tumbling, thanks to a glut of petroleum on the world market. That may be great for consumers, but it’s tough for Utah’s petroleum industry and the state budget.
In Utah, average gas prices have fallen to $2.64 a gallon. As a result, the state’s cost of living fell .2 percent last month.
But Utah also ranks 9th for energy production, and those low prices dig into the revenues of energy companies and state government.
“We’re going to see some decline in production,” says
Laura Nelson, director of the Utah Energy Development Office.
“We have not evaluated fully what the impact will be,” she adds, “but I think it will probably be a little naïve to think that there won’t be some impact to revenues.”
World prices have fallen below $60 a barrel. That’s about half what they were last summer.
And these low prices come as state leaders are thinking about seeking control of federal lands in Utah. A recent report says taking over those would only be economical if energy prices stay high.
Last year mineral lease revenue and oil and gas royalties from public lands exceeded $500 million.