Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


Shale development generally helps local government coffers


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:

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:

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

More articles from Business and Finance:

nachricht Blockchain Set to Transform the Financial Services Market
28.09.2016 | HHL Leipzig Graduate School of Management

nachricht Paper or plastic?
08.07.2016 | University of Toronto

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: New 3-D wiring technique brings scalable quantum computers closer to reality

Researchers from the Institute for Quantum Computing (IQC) at the University of Waterloo led the development of a new extensible wiring technique capable of controlling superconducting quantum bits, representing a significant step towards to the realization of a scalable quantum computer.

"The quantum socket is a wiring method that uses three-dimensional wires based on spring-loaded pins to address individual qubits," said Jeremy Béjanin, a PhD...

Im Focus: Scientists develop a semiconductor nanocomposite material that moves in response to light

In a paper in Scientific Reports, a research team at Worcester Polytechnic Institute describes a novel light-activated phenomenon that could become the basis for applications as diverse as microscopic robotic grippers and more efficient solar cells.

A research team at Worcester Polytechnic Institute (WPI) has developed a revolutionary, light-activated semiconductor nanocomposite material that can be used...

Im Focus: Diamonds aren't forever: Sandia, Harvard team create first quantum computer bridge

By forcefully embedding two silicon atoms in a diamond matrix, Sandia researchers have demonstrated for the first time on a single chip all the components needed to create a quantum bridge to link quantum computers together.

"People have already built small quantum computers," says Sandia researcher Ryan Camacho. "Maybe the first useful one won't be a single giant quantum computer...

Im Focus: New Products - Highlights of COMPAMED 2016

COMPAMED has become the leading international marketplace for suppliers of medical manufacturing. The trade fair, which takes place every November and is co-located to MEDICA in Dusseldorf, has been steadily growing over the past years and shows that medical technology remains a rapidly growing market.

In 2016, the joint pavilion by the IVAM Microtechnology Network, the Product Market “High-tech for Medical Devices”, will be located in Hall 8a again and will...

Im Focus: Ultra-thin ferroelectric material for next-generation electronics

'Ferroelectric' materials can switch between different states of electrical polarization in response to an external electric field. This flexibility means they show promise for many applications, for example in electronic devices and computer memory. Current ferroelectric materials are highly valued for their thermal and chemical stability and rapid electro-mechanical responses, but creating a material that is scalable down to the tiny sizes needed for technologies like silicon-based semiconductors (Si-based CMOS) has proven challenging.

Now, Hiroshi Funakubo and co-workers at the Tokyo Institute of Technology, in collaboration with researchers across Japan, have conducted experiments to...

All Focus news of the innovation-report >>>



Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

Agricultural Trade Developments and Potentials in Central Asia and the South Caucasus

14.10.2016 | Event News

World Health Summit – Day Three: A Call to Action

12.10.2016 | Event News

Latest News

Resolving the mystery of preeclampsia

21.10.2016 | Health and Medicine

Stanford researchers create new special-purpose computer that may someday save us billions

21.10.2016 | Information Technology

From ancient fossils to future cars

21.10.2016 | Materials Sciences

More VideoLinks >>>