May 18, 2016

Resources for the Future (RFF) and Duke University co-hosted a seminar on how oil and gas development impacts local governments and communities. The speakers were Alan Krupnick of RFF, Richard Newell and Daniel Raimi of Duke University, and Aliza Wasserman of the National Governors Association (NGA).

Krupnick outlined RFF’s Community Impacts and Interactions Initiative, which studies the wide-ranging positive and negative effects of oil and gas on communities. A notable focus of the talk was a new report on how states can reduce the risks associated with inactive oil and gas wells.

Newell and Raimi presented results from the Duke University Energy Initiative’s Shale Public Finance project, which looks at the fiscal impacts of oil and gas development on local governments. Newell noted that local governments across 16 states received at least $11.6 billion dollars from oil and gas development in 2013, from property taxes, severance taxes, and leasing of state and federal lands. On average, the share of total production value flowing through to local governments is 4.3%, but varies from roughly 0.5% in Ohio to over 9% in Wyoming. The largest overall recipients of these funds are local schools, though this also varies from state to state.

Although the project found net positive fiscal impacts for most local governments, Newell noted that rural regions with rapid increases in oil and gas development tend to experience more negative effects. Raimi focused on the Bakken region in North Dakota, explaining that local governments had particular difficulty expanding and maintaining wastewater and road infrastructure to support rapidly growing populations and heavy industry use.

Wasserman described how the NGA provides advice on policy design to facilitate responsible shale (oil and gas) development. Wasserman also offered feedback for researchers to help improve the design and utility of studies on local impacts of oil and gas development.

A recording of the webinar, including the speakers’ slides, is available on the RFF website

Sources: Resources for the Future, Duke University