CHEYENNE, Wyo. (AP) — In what may be the first large-scale energy bust to hit the state in some 30 years, Wyoming’s economy contracted in 2015, losing 6,500 jobs, mostly in the reeling oil and gas industry.
However, the current downturn in Wyoming’s energy industry so far has not reached the severity of the bust that hit the state in the mid-1980s.
“Clearly we’re seeing negatives at this point but not to the same degree as that we saw in the ’80s,” state economist David Bullard said.
The mineral extraction industry is the main driver behind Wyoming’s economy, accounting for much of the state’s tax revenue. But low oil prices, more power plants switching to burning natural gas instead of Wyoming coal and new federal restrictions have depressed the state’s energy industry.
Severance taxes that the state collects on energy production have fallen from nearly $960 million in Fiscal Year 2014 to an estimated $625 million in the current fiscal year, a decline of about 35 percent.
As a result, Wyoming Gov. Matt Mead and lawmakers are looking at cutting the state budget. The Legislature convenes its budget session Feb. 8 in Cheyenne.
Bullard said the industry woes are starting to show up in Wyoming’s labor statistics.
From December 2014 to December 2015, Wyoming lost 5,400 jobs in the mining and natural resources sector, which includes oil and gas extraction and businesses that support the industry, according to estimates by the U.S. Bureau of Labor Statistics, Bullard said.
“And it’s practically all in oil and gas,” he said. “If you look at the counties with the largest unemployment rate increases from a year ago, clearly these are counties that really depend on the energy sector: Natrona, Converse, Campbell, Sweetwater.”
During the period, unemployment rates rose from 3.9 percent to 5.5 percent in Natrona County, 3 percent to 4.3 percent in Converse, 3.2 percent to 4.3 percent in Campbell and 4 percent to 5.1 percent in Sweetwater. The statewide jobless rate in December was 4.3 percent.
The jobs that are being lost are among the best paying jobs in Wyoming, with average weekly paychecks of about $1,777.
And other jobs not directly related to the energy industry are also being affected.
“Wholesale trade is connected in there, transportation, a certain amount of the construction sector, even professional and business services,” Bullard said.
Jobs in all those sectors are either flat or down over the last year, he said.
Because the current economic downturn centers on the energy sector, it isn’t as bad as the 2009 Great Recession, which was much broader in its effect on the overall state economy, Bullard said.
In addition, it has not come close to rivaling the 1980s bust, he said.
“In 1980s, the nonfarm unemployment rate peaked at 9.4 percent back then and we had job losses of 11.6 percent from January 1986 to January 1987,” Bullard said.
The 6,500 jobs lost in the last year in Wyoming represents a 2.2 percent drop.