A new report says Utah's oil and gas drilling activity has made a strong recovery since hitting a recession-induced low in 2009, but the state isn't collecting enough tax from the industry.
The report was prepared by Headwaters Economics, a nonprofit, independent research group based in Montana that aims to improve community development and land-management decisions in the West.
According to the report, natural gas production in Utah is at pre!-recession highs, and oil production in the state is at its highest point in 20 years.
As of Jan. 27, there were 36 active rigs in Utah, 19 of them drilling for oil and 17 for natural gas.
Mark Haggerty, an economist with Headwaters, said the level of drilling activity is a good indicator of trends in oil and gas employment, although mining activity represents less than 1 percent of employment in Utah.
"It's a small part of the economy," Haggerty said. "Most of the employment benefits are concentrated in the areas where the drilling is taking place."
Haggerty said where the revitalized industry can really make a difference in the state's economy is through a more effective tax rate.
The report states that compared to other Western energy producers -- Colorado, Montana, New Mexico, North Dakota and Wyoming -- Utah received the least value in tax revenue from oil and natural gas production in fiscal year 2011.
Haggerty said that while Utah's total oil and natural gas production for FY 2011 was almost $4 billion, it created a total tax revenue of just less than $123 million.
"By having such a low tax rate, Utah is just sending more money to Washington," Haggerty said, noting that tax dollars from the gas and oil industry could go to things like roads and schools.
U.S. Rep. Rob Bishop, R-Utah, a frequent critic of the Obama Administration's energy policies, said that any successes occurring in the oil and gas industry today should be attributed to policies developed by the Bush Administration.
Bishop also noted that President Obama recently canceled 77 oil and gas leases in Utah, and the impact of that move likely won't be felt for a few years.
A study recently released by the Western Energy Alliance shows that 2,958 acres of public land were sold for oil and gas leasing in 2011, a 98 percent decrease from 2008.