"The shale revolution has created a variety of opportunities and challenges for local governments," said Richard Newell, a professor of energy and environmental economics. His team traveled to 21 oil- and gas-producing regions in 16 states to interview more than 200 local officials and look at government finances.
While oil and gas activity generated local property taxes, state severance and sales taxes and other revenues, "industry truck traffic can cause substantial damage to local roads, and population growth can strain government services such as police, fire and emergency services," the release says. "In regions experiencing the most rapid growth (such as parts of North Dakota, Texas and Colorado), city governments have spent hundreds of millions of dollars upgrading water and wastewater infrastructure to serve their growing populations."
The recent downturn in gas and oil prices "can create substantial financial challenges for regions where the oil and gas industry is a central part of the economy. In Alaska and North Dakota, for example, a prolonged slump in oil prices could lead to longer-term fiscal challenges for state and local governments." Newell's associate, Daniel Raimi, said, "Looking forward, local governments that have become heavily dependent on the oil and gas industry may look to diversify their economies."
The study is part of a three-year Shale Public Finance project funded by the Alfred P. Sloan Foundation. The reports were released at a May 18 workshop on the local impacts of oil and gas development. To see a webcast of the workshop go to www.rff.org/live. For more on the project, including previous reports and an interactive map of findings, see http://energy.duke.edu/shalepublicfinance.