Rig, job counts up, coal rebounds slightly

Wyoming's economy showed several signs of improvement according to figures released by the Economic Analysis Division (EAD) of the Wyoming Department of Administration and Information, fueled largely by increases in oil production and more construction across the state.

As oil production in the Cowboy state increased again from a mid-2016 low, oil prices per barrel continued to climb over previous months, but still remained below $50 per barrel. Natural gas prices were on the upswing as were coal prices per ton. Coal also saw a modest boost in production in Wyoming.

Wages are also increasing in Wyoming, according to the figures published by the EAD.

"September's natural gas price increased slightly while crude oil fared even better compared to August prices," Jim Robinson, Principal Economist for the EAD, said in a news release. The average price for West Texas Intermediate Crude (WTI) in September was $49.72 per barrel, up from $48.03 in August and $46.65 in July.

In September 2016, the average price for a WTI barrel was $45.18, indicating a 10 percent increase.

The September 2017 price for natural gas averaged $2.65 per million British thermal units (MMBtu), compared to $2.61 per MMBtu average in August 2017. 

In September 2016, the average price per MMBtu was $2.72.

As prices for oil have risen, so has the number of oil and gas rigs in the state, as well as the numbers of jobs in the sector. At the end of September, there were 13 active oil rigs in the state, and 13 active gas rigs. That figure is double the number of active rigs in the state at the end of September 2016, according to Houston-based Baker-Hughes, an oilfield services company.

Along with rigs come jobs in the state. As of August, there were 11,700 oil and gas jobs in the state, an improvement of 1,900 over the same month a year earlier.

COAL ALSO UP,

BUT OUTLOOK

STILL UNCERTAIN

Coal production in the state also inched up in September, while the price per ton remained essentially the same.

The price per ton of Powder River Basin (PRB) coal increased to $11.53 in September, up from $11.50 in August and $11.52 in July. At the end of September 2016, the price per ton was $9.90, according to the U.S. Energy Information Agency (EIA).

Across the state, production of coal was up. In August 31.9 million tons of coal were mined, an increase of 4 percent when compared to August 2016 coal production figures. Between July 2016 and July 2017, coal production was also up 4 percent.

Between July 2016 and 2017, production in the state jumped from 22.1 million tons to 26.5 million, a nearly 20 percent increase over the year.

Despite modest gains in coal mining across the state, some analysts are not bullish about the coal market.

Despite a Monday announcement by the Trump administration to roll back an Obama administration climate policy that attempted to reduce greenhouse gas emissions, analysts at Bloomberg suggested coal would continue to struggle going into the future.

While the rollback of greenhouse gas regulations might make coal production easier, there were no immediate signs that demand for coal, which is low, would increase. Most power plant operators who announced plans to close coal-fired power plants still plan to do so, Bloomberg said, and it is speculated that the demand for coal will see no significant increases and will continue to decrease over time.

Demand for coal is curtailed since natural gas is cheaper, and more electrical needs are being met by renewables-notably wind power-as more and more renewable power sources come online, Bloomberg said.

IMPACTS ACROSS STATE

Two months into fiscal year 2018 (FY2018), sales and use tax collections in Wyoming are up by $14.6 million compared to the same period in fiscal year 2017 (FY2017). This represents a 13.8 percent increase in state sales and use tax revenues in FY2018 over the same period of FY2017.

Some counties have seen more of a boon than others, however. "Sweetwater, Sublette, and Laramie counties registered the largest gains in collections in a year-over-year comparison. The mining and retail trade sectors led the way in gains compared to a year ago," Robinson of EAD said.

Carbon County was one of six counties in the state that have seen a continued decrease in sales tax remittances. Overall, collections in Carbon County were down 10.7 percent, or by about $300,000, fiscal year-to-date.

Overall, Carbon County accounted for 2 percent of state sales and use tax revenues.

By industry category, mining-which includes oil and gas production as well as coal-had the largest growth in state sales tax collections, seeing a $6.1 million increase in collections fiscal year-to-date. Retail trade was the second fastest growing category, with a $2.4 million boost. Construction and public administration were each up by $1.9 million.

Of 12 industry sectors tracked by the EAD, only three saw decreases in sales tax collections: wholesale trade, information and professional and business services. Of those three, information had the largest decline of about $400,000 in collections.

Overall across the state, employment is still down compared to the same period one year ago. Despite gains of 2,300 jobs in the mining sector, the state still had 2,400 fewer payroll positions in August 2017 than in August 2016.

Of the 14 industrial categories tracked by the U.S. Bureau of Labor Statistics, the only sectors other than mining to add payroll positions in August were manufacturing with 100 more jobs, financial activities with 200 more jobs, other services with 100 jobs and the federal government which added 200 jobs in the state.

State and local government lost the most jobs at 1,900, followed by leisure and hospitality, which shed 1,300.

Despite the overall job losses across the state, those with jobs seem to be doing a little better than they were a year ago. Across the state, income increased at a rate of 0.6 percent in the second quarter of 2017 compared to first quarter figures.