Progress Update Methodology

Progress Metrics Methodology

The progress metrics are intended to provide an alternative illustration of the magnitude of different aspects of the project. We identified publicly available data to use in the calculations as described below.

Environmental Benefits

1. Equivalent Passenger Vehicles: US EPA estimates that the average U.S. passenger vehicle emits 4.75 MTCO₂ per year (website accessed July 2016). We used US EPA’s “Greenhouse Gas Equivalencies Calculator” website to calculate the total presented here. Background information on this estimate is provided by US EPA on their website: “GHG Equivalencies Calculator -Calculations and References

2. Equivalent Forest Acres of Sequestration: US EPA estimates that the average acre of U.S. forest annually sequesters 1.22 MT CO₂ (website accessed July 2016). We used US EPA’s “Greenhouse Gas Equivalencies Calculator” website to calculate the total presented here. Background information on this estimate is provided by US EPA on their website: “GHG Equivalencies Calculator -Calculations and References

3. Equivalent LED Lightbulbs: US EPA estimates that a 9 watt light-emitting diode (LED) bulb produces the same light output as a 43 watt incandescent light bulb (website accessed July 2016). Annual energy consumed by a light bulb is calculated by multiplying the power (43 watts) by the average daily use (3 hours/day) by the number of days per year (365). The national average for delivered electricity in 2012 was about 1,670.5 lbs CO2 per megawatt-hour. We used US EPA’s “Greenhouse Gas Equivalencies Calculator” website to calculate the total presented here. Background information on this estimate is provided by US EPA on their website: “GHG Equivalencies Calculator -Calculations and References

Economic Benefits

1. Equivalent Jobs. Using production and economic data generated for Otsego County  in the 2016 Michigan Oil and Gas Study , we estimated that 0.0003 jobs are created along with $14 of direct labor income for each Barrel of Oil Equivalent (BOE) produced.  We multiplied the barrels of oil produced during the study by the factors of 0.0003/BOE and $14/BOE, respectively, to estimate the equivalent jobs and direct labor income benefit.

2. Equivalent Severance and Sales Taxes. Using production and economic data generated for Otsego County in the 2016 Michigan Oil and Gas Study, we estimated that a combined total of $2.55 is created in severance and sales taxes for each BOE produced. We multiplied the total number of barrels of oil produced during the study by the factor of $2.55/BOE to estimate the equivalent severance and sales taxes benefit.

3. Equivalent Other Taxes and Royalties. Using production and economic data generated for Otsego County in the 2016 Michigan Oil and Gas Study, we estimated that a combined total of $7 is created in other taxes and royalties for each BOE produced. We multiplied the total number of barrels of oil produced during the study by the factor of $7/BOE to estimate the equivalent severance and sales taxes benefit.

Economic Benefit Factors
In 2014, 578,979 bbls oil and 27,578,558 McF natural gas were produced in Otsego County, which translates to a combined total 5,333,347 Barrel of Oil Equivalent (BOE). Furthermore, the economic impact of oil and gas production in Otsego County for 2014-2015 were reported as follows:
•    Direct Employment (#) = 1,711
•    Direct Labor Income ($) = 73,889,000
•    Severance and Sales Tax ($) = 13,639,000
•    Local Property, Income Taxes and Royalties ($) = 37,318,000

Using the production data and the economic impact estimated by this study, we developed generalized economic benefit factors per BOE. For example, Direct Employment benefit factor (0.0003/BOE) was calculated by dividing the number of jobs (1,711) by the BOE (5,333,347).  Similarly, the Direct Labor Income benefit factor ($14/BOE) was calculated by dividing the Direct Labor Income ($73,889,000) by 5,333,347 BOE; the Severance and Sales Taxes benefit factor ($2.55/BOE) was calculated by dividing the tax impact ($13,639,000) by 5,333,347 BOE; and the Local Property, Income Taxes and Royalties benefit factor ($7/BOE) was calculated by dividing the economic impact ($37,318,000) by the BOE (5,333,347).

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