Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Shale development generally helps local government coffers

21.05.2014

Revenue gains usually offset cost of new roads, utilities

Oil and gas development from shale fields has generally helped the public finances of local communities, providing new revenues and resources that usually -- but not always -- outweigh the increased demand for public services and other costs, according to a new analysis from two Duke University researchers.


A still image from an interactive map built by the research team which enables viewers to explore the study's findings about shale gas revenue and demand for public services around the country. The interactive map can be found here: http://energy.duke.edu/shalepublicfinance.

Credit: Duke University Energy Initiative

Daniel Raimi and Richard Newell gathered data from communities surrounding 10 oil and gas "plays" from September 2013 through February 2014, traveling to Arkansas, Colorado, Louisiana, Montana, North Dakota, Pennsylvania, Texas and Wyoming to interview local officials and collect information firsthand.

The report, which appears online, describes major revenue sources for local governments, which can include property taxes, sales taxes and state-collected severance taxes or fees that are sent back to the local level. Some local governments also partner with oil and gas companies to help maintain roads, an approach that helped reduce expenses associated with heavy truck traffic in states including Arkansas, Colorado and Pennsylvania.

New costs for local governments associated with oil and gas development, include damage to roads from heavy truck traffic, water and sewer service expansion, government staffing and other needs brought on by rapid population growth.

The researchers found that the net impact of recent oil and gas development has generally been positive for local public finances. However, many local governments in western North Dakota and eastern Montana, near the Bakken shale formation, have thus far experienced net negative fiscal effects. Also, some municipalities in rural parts of Colorado and Wyoming struggled to manage rapid population growth as natural gas production accelerated in the mid-to-late 2000s.

"The fiscal effects for local governments tend to vary from state to state, but we found that for most of them new revenues were outweighing new demand for services," said Newell, director of the Duke University Energy Initiative and Gendell Professor of Energy and Environmental Economics at Duke's Nicholas School of the Environment.

The research is a snapshot of the fiscal impact to date in the eight states and does not examine the long-term economic impact to governments and the communities they serve, a question the authors say is important and needs additional study.

Newell and Raimi found net positive fiscal effects in regions where oil and gas booms were ongoing or had slowed in recent years, as well as in regions that experienced different scales of activity. This includes local governments in diverse regions where population density and government capacity vary substantially.

"One of the key questions is how these fiscal effects change over time," said Raimi, an associate in research with Duke's Energy Initiative. "In very rural areas, some local governments have faced challenges when development first surges. In many cases, those challenges faded over time. In most other areas, we found net positive or at least roughly neutral financial effects on local government."

"In some parts of North Dakota, populations have doubled, tripled or even quadrupled just in the past few years," Raimi said. "For local governments in these areas, it's hard to keep up with the demand for services, especially costly infrastructure projects such as sewer and water treatment plants."

###

The report is the first of a series of publications to be produced by the Shale Public Finance Project, an effort led by Newell with support from the Alfred P. Sloan Foundation. The project's website provides additional information, including interactive maps and a blog about sites visited during the research.

Margaret Lillard | Eurek Alert!
Further information:
http://www.duke.edu

Further reports about: Arkansas Energy Montana Shale Wyoming environmental economics neutral roads truck traffic

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Ultrafast snapshots of relaxing electrons in solids

Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!

When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...

Im Focus: Quantum Sensors Decipher Magnetic Ordering in a New Semiconducting Material

For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.

Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...

Im Focus: Fast, convenient & standardized: New lab innovation for automated tissue engineering & drug

MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems Holding GmbH about commercial use of a multi-well tissue plate for automated and reliable tissue engineering & drug testing.

MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems...

Im Focus: Silencing bacteria

HZI researchers pave the way for new agents that render hospital pathogens mute

Pathogenic bacteria are becoming resistant to common antibiotics to an ever increasing degree. One of the most difficult germs is Pseudomonas aeruginosa, a...

Im Focus: Artificial Enzymes for Hydrogen Conversion

Scientists from the MPI for Chemical Energy Conversion report in the first issue of the new journal JOULE.

Cell Press has just released the first issue of Joule, a new journal dedicated to sustainable energy research. In this issue James Birrell, Olaf Rüdiger,...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

I-ESA 2018 – Call for Papers

12.09.2017 | Event News

EMBO at Basel Life, a new conference on current and emerging life science research

06.09.2017 | Event News

 
Latest News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

New quantum phenomena in graphene superlattices

19.09.2017 | Physics and Astronomy

A simple additive to improve film quality

19.09.2017 | Power and Electrical Engineering

VideoLinks
B2B-VideoLinks
More VideoLinks >>>