Rural energy counties in West lag behind peers

A report by Headwaters Economics in Bozeman, Mont., titled Fossil Fuel Extraction as a County Economic Development Strategy, has found that rural counties in the Western U.S. that do not depend on mining coal or drilling for oil and gas fare better than those that do. "Counties that have a large percentage of workers mining coal or drilling for oil and gas have weaker economies than counties without natural resources," reports Bill Bishop for the Daily Yonder. (Headwaters map shows energy counties in yellow and peer counties in blue)

Counties that are economically vested in mining and drilling have slower growth, more out-migration and lower rates of household income, the reports says. Energy producing counties "also had had a slightly less educated workforce, a greater gap between high- and low-income households, less ability to attract investment and retirement dollars and they created less economic diversity."

"The Headwaters researchers found that energy-intensive counties were like the hare in the race with the tortoise," writes Bishop. "Counties rich in oil, coal and gas race ahead when energy prices spike, but in the long run, the tortoise counties win the race." Energy counties certainly see a boom when prices for fossil fuels spike, but when booms end those counties go into decline. The recent drop in gas prices has seen this phenomenon occur in parts of the West.

The report says, “In counties that have pursued energy extraction as an economic development strategy ... the long-term indicators suggest that relying on fossil fuel extraction is not an effective economic development strategy for competing in today’s growing and more diverse western economy.” (Read more)