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 Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

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: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

Im Focus: Three Magnetic States for Each Hole

Nanometer-scale magnetic perforated grids could create new possibilities for computing. Together with international colleagues, scientists from the Helmholtz Zentrum Dresden-Rossendorf (HZDR) have shown how a cobalt grid can be reliably programmed at room temperature. In addition they discovered that for every hole ("antidot") three magnetic states can be configured. The results have been published in the journal "Scientific Reports".

Physicist Dr. Rantej Bali from the HZDR, together with scientists from Singapore and Australia, designed a special grid structure in a thin layer of cobalt in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

Biocompatible 3-D tracking system has potential to improve robot-assisted surgery

17.02.2017 | Medical Engineering

Real-time MRI analysis powered by supercomputers

17.02.2017 | Medical Engineering

Antibiotic effective against drug-resistant bacteria in pediatric skin infections

17.02.2017 | Health and Medicine

VideoLinks
B2B-VideoLinks
More VideoLinks >>>