Pair of studies say fracking boom has been good for rural economies

While the oil and gas boom has caused its share of problems in rural communities, a pair of studies say hydraulic fracturing has been, for the most part, good for rural economies, Bill Bishop reports for the Daily Yonder. One study examines the effect of the boom on local economies, while the other looks at the impact on employment and income.

A study by Dartmouth College "found that the new oil and gas activity led to an increase in aggregate national employment of 725,000 and a half-a-percentage point decline in the unemployment rate, all coming in the midst of a steep recession," Bishop writes. "Much of that gain stayed in the counties where the wells were drilled," researchers found. "The bigger the population of the county, the more benefits stayed close by." Researchers found that "13 percent of the total value of oil and gas production stayed within the county in the form of higher incomes" from wages and royalties and "36 percent of the value production stayed within 100 miles of the well." (Dartmouth graphic)

The other study, from Duke University, looked at how local governments in eight states—Arkansas, Colorado, Louisiana, Montana, North Dakota, Texas, Pennsylvania and Wyoming—"fared in capturing tax dollars from oil and gas production," Bishop writes. The authors wrote: "Most local governments in these states have experienced net positive fiscal effects from recently increased oil and gas development. However, most counties and municipalities in the Bakken region of North Dakota, municipalities in eastern Montana and certain counties in Texas are currently facing fiscal challenges managing oil- and gas- related growth." (Duke graphic)

“Broadly speaking, large-scale oil and gas development tends to create the greatest fiscal needs in very rural areas with limited existing infrastructure. . . . In most regions, this has been managed through increased government revenue and/or collaboration with industry," researchers wrote. Bishop notes that "a recurring theme in the report is that taxes from oil and gas production are not sufficient to repair and build roads. In North Dakota, local governments 'are not receiving sufficient revenue to manage the infrastructure demands associated with Bakken development.' In Pennsylvania, however, local governments have 'experienced net positive fiscal impacts from Marcellus shale development.'” (Read more)