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Oil and gas production from Montana's state trust lands.

Article Excerpt
As prices for oil reach an all-time high, profits for oil companies are also on the rise. Exxon Mobil supplanted Wal-Mart in 2006 as the largest company in the United States, with the No. 1 ranking on the FORTUNE 500 list. Last year, Exxon Mobil generated $339.9 billion in total revenues and $36.1 billion in profits (Schwartz 2006). By comparison, during the same period, Wal-Mart grossed $315.7 billion and netted $11.2 billion.

With all the attention given increased prices and profits lately, one might wonder what the impact of oil and gas production has been on Montana's economy. Adair and Rickard (2006) with the Center for Applied Economic Research at Montana State University-Billings have conducted such an analysis. In 2005, 32.8 million barrels of oil and 108.1 million MCF of natural gas were produced in Montana from approximately 3,900 producing oil wells and 5,400 producing gas wells (Table 3, page 9). Oil production in 2005 represented a 33 percent increase over 2004 levels, and an increase of 101 percent when compared with 2001. The 2005 oil production was valued at $1.78 billion, with natural gas adding another $843 million. Oil and gas production generated $140.3 million in taxes, with roughly half of the revenue distributed to counties and half to the general fund. Richland and Fallon counties received tax revenues in excess of $16 million and $15 million respectively. Adair and Rickard (2006:28) conclude: "The direct economic impact of the entire oil and gas industry in Montana is approximately $5.8 billion and supports over 5,000 Montana jobs. The total economic impact [with the output multiplier] is valued at $8.6 billion and 12,000 jobs."

Another component of the overall economic impact of oil and gas production in Montana is the direct impact it has on school funding through the management of state trust lands. In Wyoming, oil and gas revenues have provided the state with a $1.8 billion surplus. Last winter, Wyoming's Legislature boosted K-12 spending 24 percent--to more than $12,400 per pupil (Gruver 2006). In the past two years, oil and gas revenues generated from the management of Montana's state trust lands have increased by more than 200 percent...