Local Government Financial Impact of Oil/Gas Development
Since the mid-2000s, technological advances have led to a dramatic increase in natural gas and oil production from shale formations in the United States. With this increased production comes new revenue – and new costs – for local and state governments.
The Shale Public Finance project seeks to identify the key public finance issues facing local governments that are dealing with the shale boom. Led by Energy Initiative Director Richard G. Newell and Associate in Research Daniel Raimi, and with the support of the Alfred P. Sloan Foundation, the project has produced reports on new revenue and costs, and on revenue allocations. The research continues and more reports are planned.
Summaries of our findings to date can be found in the interactive map below.
Local government revenues and costs associated with oil and gas production
This report reviews the major revenues, costs and net fiscal impact for county and municipal governments in eight states where large increases in oil and/or gas production have recently occurred.
Oil and gas revenue allocation for local governments in eight states
This report provides detailed analysis of how revenue from the oil and gas sector flows to local governments in Arkansas, Colorado, Louisiana, Montana, North Dakota, Pennsylvania, Texas and Wyoming.
Project team members traveled to key shale gas and oil production regions around the United States to investigate firsthand the impact on local government finance. We initially traveled to “plays” including the Bakken in North Dakota and Montana, the Eagle Ford and Barnett in Texas, and the Haynesville in Louisiana. Our most recent research took us to the rest of the major U.S. oil- and gas-producing regions.
More about the Shale Public Finance project:
More than a dozen experts and local officials came to Duke University in the spring of 2014 to discuss how they handled or are still managing key fiscal issues raised by shale oil and gas development. They were joined by experts on energy policy, economics, and law from across the United States, Duke University and North Carolina to discuss the roles local government, state policy-makers and industry play in helping communities manage shale development’s fiscal implications.
2014 Workshop Presentations:
- Revenues, costs, and net fiscal impacts for local governments associated with oil and gas development. Daniel Raimi, Associate in Research, Duke University Energy Initiative
- Balancing the revenues and costs associated with Eagle Ford development. Larry Dovalina, city manager, Cotulla, TX
- Balancing the revenues and costs associated with Bakken development. Shawn Kessel, city manager, Dickinson, ND
- Working with oil and gas operators in Western Colorado. Kirby Wynn, oil and gas liaison, Garfield County, CO
- Working with oil and gas operators in Southwestern Pennsylvania. Harlan Shober, county commissioner, Washington County, PA
About 20 experts on local government issues related to oil and gas development convened at the Energy Initiative in late August 2015 for a workshop that focused on fiscal effects for local governments in the eight states examined in Phase II of the Shale Public Finance project. Along with local government officials from these states (Alaska, California, Kansas, New Mexico, Ohio, Oklahoma, Utah, and West Virginia), the workshop featured experts from independent research organizations, state and federal government, and oil and gas companies. At the workshop, experts provided feedback to Duke University researchers on their preliminary findings, discussed issues related to tax policy and long-term economic health for resource-dependent communities, and shared experiences from a range of regions affected by the oil and gas development in the shale era.
2015 Workshop Presentations:
- Net fiscal impacts for local governments in Shale Public Finance Phase II states. Daniel Raimi, Duke University Energy Initiative, Associate in Research.
- (No PowerPoint: Public finance issues and oil & gas in Woods County. Randy McMurphy, Woods County, Okla., County Commissioner)
- Public finance issues and oil & gas in Duchesne County, Uintah basin. Gregory Todd, Duchesne County, Utah, County Commissioner
- Public finance issues and oil & gas in Farmington, San Juan basin. Robert Mayes, Farmington, New Mexico, City Manager
- Public finance issues and oil & gas in Alaska. Larry Persily, Kenai Peninsula Borough, Alaska, Special Advisor to the Mayor
- Revenue allocation in phase II states. Daniel Raimi, Duke University Energy Initiative, Associate in Research
- Approaches to measuring local public finances. Justin Marlowe, University of Washington, Professor of Public Finance and Civic Engagement