Unconventional gas and oil development in the united states: Economic experience and policy issues

Applied Economic Perspectives and Policy

Volumn 38, Issue 2, 2016, Pages 191-214

  Kelsey, Timothy W ^a   Partridge, Mark D ^b   White, Nancy E ^c  

^a PENNSYLVANIA STATE UNIVERSITY   (United States)

^b OHIO STATE UNIVERSITY   (United States)

^c BUCKNELL UNIVERSITY   (United States)

Author keywords

Bakken shale; Economic impact; Marcellus shale; Natural gas

Indexed keywords

EID: 85014134358     PISSN: 20405790     EISSN: 20405804     Source Type: Journal    
DOI: 10.1093/aepp/ppw005     Document Type: Article

References (95)

1. Acemoglu D., J.A. Robinson, and T. Verdier. 2004. Alfred Marshall Lecture: Kleptocracy and Divide-and-rule: A Model of Personal Rule. Journal of the European Economic Association 22: 3162-92.
2. Allcott, H. and D. Keniston. 2014. Dutch Disease or Agglomeration? The Local Economic Effects of Natural Resource Booms in Modern America. National Bureau of Economic Research, Working Paper #20508, Cambridge, MA.
3. Betz, M., M. Farren, L. Lobao, and M.D. Partridge. 2015. Coal Mining, Economic Development, and the Natural Resources Curse. Energy Economics (50): 105-16.
4. Begos, K. 2014. Company: Petrochemical Plant Planning Carries No Guarantees. Williamsport Sun-Gazette April 17, 2014.
5. Beine, M., C. Bos, and S. Coulombe. 2012. Does the Canadian Economy Suffer from Dutch Disease? Resource and Energy Economics 344: 468-92.
6. Black, D., T. McKinnish, and S. Sanders. 2005a. The Economic Impact of the Coal Boom and Bust. The Economic Journal 155: 449-76.
7. Black, D., T. McKinnish, and S. Sanders. 2005b. Tight Labor Markets and the Demand for Education: Evidence from the Coal Boom and Bust. Industrial and Labor Relations Review 591: 3-16.
8. Bloomberg. 2012. Frackers Fund University Research That Proves Their Case. July 23, 2012. Available at: http://www.bloomberg.com/news/articles/2012-07-23/frackers-fund-university-research-that-proves-their-case.
9. Bloomberg. 2014. U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia. July 4, 2014. Available at: http://www.bloomberg.com/news/2014-07-04/u-s-seen-as-biggest-oil-producer-after-overtaking-saudi.html.
10. Bogle J. 2011. Lies and Broken Promises: An Emerging Giant. Williamsport, PA: Responsible Drilling Alliance.
11. Brasier, K., M. Filteau, D. McLaughlin, R. Stedman, J. Jacquet, T. Kelsey, and S. Goetz. 2011. Residents' Perceptions of Community and Environmental Impacts from Development of Natural Gas in the Marcellus Shale: A Comparison of Pennsylvania and New York Case Studies. Journal of Rural Social Sciences 261: 32-61.
12. Brown, C. 2013. State Revenues and the Natural Gas Boom: An Assessment of State Oil and Gas Production Taxes. Available at: http://www.ncsl.org/research/energy/state-revenues-and-the-natural-gas-boom.aspx.
13. Brown, J. 2014. Production of Natural Gas from Shale in Local Economies: A Resource Blessing or Curse? Economic Review 99:119-147. Available at: www. kansascityfed.org.
14. Brundage, T.L., J. Jacquet, T.W. Kelsey, J.R. Ladlee, J. Lobdell, J.F. Lorson, L.L. Michael, and T.B. Murphy. 2011. Pennsylvania Statewide Marcellus Shale Workforce Needs. Williamsport, PA: Marcellus Shale Education and Training Center.
15. Bunker, S. 1984. Modes of Extraction, Unequal Exchange, and the Progressive Underdevelopment of an Extreme Periphery: The Brazilian Amazon, 1600-1980. American Journal of Sociology 895:1017-64.
16. Carrington, W.J. 1996. The Alaskan Labor Market during the Pipeline Era. Journal of Political Economy 1041: 186-218.
17. Center for Public Integrity. 2014. How Oil and Gas Firms Gained Influence and Transformed North Dakota. July 21, 2014. Available at: http://www.publicintegrity.org/2014/07/21/15107/how-oil-and-gas-firms-gained-influence-and-transformed-north-dakota?utm_source=email&utm_campaign=watchdog&utm_medium=publici-email.
18. Chakravorty, U., S. Gerking, and A. Leach. 2010. State Tax Policy and Oil Production: The Role of the Severance Tax and Credits for Drilling Expenses. In U.S. Energy Tax Policy, ed. G. Metcalf, 305-37. Cambridge and New York: Cambridge University Press.
19. Collins, J.T., and K. Deck. 2006. Projecting the Economic Impact ofthe Fayetteville Shale Play for 2005-2008. Fayetteville, AR: Center for Business and Economic Research, University of Arkansas.
20. Considine, T.J., R. Watson, R. Entler, and J. Sparks. 2009. An Emerging Giant: Prospects and Economic Impacts ofDeveloping the Marcellus Shale Natural Gas Play. University Park, PA: The Pennsylvania State University, Dept. of Energy and Mineral Engineering.
21. Considine, T.J., R. Watson, and S. Blumsack. 2010. The Economic Impacts of the Pennsylvania Marcellus Shale Natural Gas Play: An Update. University Park, PA: The Pennsylvania State University, Dept. of Energy and Mineral Engineering.
22. Deck, K. and V. Riiman. 2012. Revisiting the Economic Impact of the Natural Gas Activity in the Fayetteville Shale: 2008-2012. Fayetteville, AR: Center for Business and Economic Research, University of Arkansas.
23. Dissart, J.C., and S.C. Deller. 2000. Quality of Life in the Planning Literature. Journal of Planning Literature 15: 135-61.
24. Dunlap, R.E., F. Buttel, P. Dicken, and A. Gijswijt. 2002. Sociological Theory and the Environment. Lanham, MD: Rowman and Littlefield.
25. Duranton, G., and M.A. Turner. 2011. The Fundamental Law of Road Congestion: Evidence from U.S. cities. American Economic Review 101: 2616-52.
26. Farren, M., A. Weinstein, and M.D. Partridge. 2012. Making Shale Development Work for Ohio. Swank Program in Rural-Urban Policy Summary Report: Available at: www. aede.osu.edu/programs/Swank.
27. Forbes. 2014. Shale Oil and gas: Potential for Earthquakes Could Cause Sector to Lose Footing. Forbes. Available on-line at: http://www.forbes.com/sites/kensilver stein/2014/05/06/shale-oil-and-gas-potential-for-earthquakes-could-cause-sector-to-lose-footing/#3619a42f6c46.
28. Foroohar, R. 2013. How "Made in the USA" Is Making a Comeback, Manufacturing Is Back-but Where Are the Jobs? Time Magazine. Available at: http://business. time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/.
29. Freudenburg, W.R. 1981. Women and Men in an Energy Boomtown: Adjustment, Alienation, and Adaptation. Rural Sociology 46: 220-44.
30. Freudenburg, W.R. 1984. Boomtown's Youth: the Differential Impacts of Rapid Community Growth upon Adolescents and Adults. American Sociological Review 49: 697-705.
31. Glaeser, E.L., S.P. Kerr, and W.R. Kerr. 2012. Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines. National Bureau of Economic
32. Research, Working Paper #18333, Cambridge, MA Haggerty, J., P.H. Gude, M. Delorey, and R. Rasker. 2013. Long-term Effects of Income Specialization in Oil and Gas Extraction: The U.S. West, 1980-2011. Available at: http://headwaterseconom ics.org/energy/western/western-counties-fossil-fuel-development#Study.
33. Hammond, G.W. and E. Thompson. 2004. Employment Risk in U.S. Metropolitan and Nonmetropolitan Regions: The Influence of Industrial Specialization and Population Characteristics. Journal ofRegional Science 44:517-42.
34. Hampton, R. 2014. Pricing Non-renewable Natural Resource Use: The Implications of a Severance Tax. Available at: http://deepblue.lib.umich.edu/handle/2027.42/107728.
35. Hardy, K., and T.W. Kelsey. 2013. Marcellus Shale and Local Economic Activity: What the 2012 Pennsylvania State Tax Data Say. University Park, PA: The Pennsylvania State University, Penn State Extension.
36. Hartwick, J.M. 1977. Intergenerational Equity and the Investment of Rents from Exhaustible Re-sources American Economic Review 67: 972-4.
37. Headwaters Economics. 2012. Benefiting from Unconventional Oil: State Fiscal Policy is Unprepared for the Heightened Community Impacts of Unconventional Oil Plays. Stanford University. The Bill Lane Center for the American West. Available at: http://headwaterseconomics.org/wphw/wp-content/uploads/ND_Unconven tional_Oil_Communities.pdf.
38. Headwaters Economics. 2008. Energy Revenue in the Intermountain West: State and Local Government Taxes and Royalties from Oil, Natural Gas, and Coal, Energy and The West Series. Available at: http://headwaterseconomics.org/pubs/energy/ HeadwatersEconomics_EnergyRevenue.pdf.
39. Herzenberg, S. 2011. Drilling Deeper into Job Claims: The Actual Contribution of Marcellus Shale to Pennsylvania Job Growth. Harrisburg, PA: Keystone Research Center.
40. Hotelling, H. 1931. The Economics of Exhaustible Resources. Journal of Political Economy 39 (2): 137-75.
41. Jacquet, J.B. 2012. Landowner Attitudes toward Natural Gas and Wind Farm Development in Northern Pennsylvania. Energy Policy 50: 677-88.
42. Jacobsen, G.D., and D.P. Parker. 2014. The Economic Aftermath of Resource Booms: Evidence from Boomtowns in the American West. Economic Journal. doi: 10.1111/ecoj.12173.
43. Kargbo, D., R. Wilhelm, and D. Campbell. 2010. Natural gas plays in the Marcellus shale: Challenges and potential opportunities. Environmental Science & Technology., 44:5679-5684.
44. Kay, D.L. 2011. The Economic Impact ofMarcellus Shale Gas Drilling: What Have We Learned? What Are the Limitations? Ithaca, NY: Cornell University.
45. Kelsey, T.W., A. Metcalf, and R. Salcedo. 2012. Marcellus Shale: Land Ownership, Local Voice, and the Distribution of Lease and Royalty Dollars. Center for Economic and Community Development White Paper Series. University Park, PA: The Pennsylvania State University.
46. Kelsey, T.W., M. Shields, J. Ladlee, and M. Ward. 2011. Economic Impacts of Marcellus Shale in Pennsylvania: Employment and Income in 2009. Williamsport, PA: Marcellus Shale Education & Training Center.
47. Kelsey, T.W. and M. Ward. 2011. Natural Gas Drilling Effects on Municipal Governments Throughout Pennsylvania's Marcellus Shale Region, 2010. University Park, PA: Penn State Cooperative Extension.
48. Kinnaman, T.C. 2011. The Economic Impact of Shale Gas Extraction: A Review of Existing Studies. Ecological Economics 70: 1243-9.
49. Komarek, T.J. 2014. Crime and Natural Resource Booms: Evidence from Unconventional Natural Gas Production. Paper Presented to the North American Regional Science Conference, Bethesda, MD.
50. Kunce, M., S. Gerking, W. Morgan, and R. Maddux. 2003. State Taxation, Exploration, and Production in the U.S. Oil Industry. Journal ofRegional Science 43 (4): 749-70.
51. Marchand, J. 2012. Local Labor Market Impacts of Energy Boom-Bust-Boom in Western Canada. Journal of Urban Economics 71: 165-74.
52. Michaels, G. 2010. The Long-term Consequences of Resource-Based Specialisation. The Economic Journal 121: 31-57.
53. National Energy Technology Lab (NETL). 2010. Projecting the Economic Impact of Marcellus Shale Gas Development In West Virginia: A Preliminary Analysis Using Publicly Available Data. Morgantown, WV: U.S. Department of Energy.
54. North Dakota Legislative Council Report. 2013. 2013-15 Oil and Gas Tax Revenue Allocation Flowchart, Prepared by the Legislative Council Staff, July. Available online at http://www.legis.nd.gov/files/resource/15.9055.01000.pdf?20140424131331). Downloaded January 15, 2015.
55. Papyrakis, E., and R. Gerlagh. 2004. The Resource Curse Hypothesis and Its Transmission Channels. Journal ofComparative Economics 32: 181-93.
56. Paredes, D., T.R. Komarek, and S. Loveridge. 2015. Income and Employment Effects of Shale Gas Extraction Windfalls. Energy Economics 47: 112-20.
57. Partridge, M.D., M. Betz, and L. Lobao. 2013. Natural Resource Curse and Poverty in Appalachian America. American Journal ofAgricultural Economics 95: 449-56.
58. Partridge M.D. and D.S. Rickman. 2003. The Waxing and Waning of Regional Economies: The Chicken-egg Question of Jobs vs. People. Journal ofUrban Economics 53: 76-97.
59. Partridge M.D. and D.S. Rickman 2006. An SVAR Model of Fluctuations in U.S. Migration Flows and State Labor Market Dynamics. Southern Economic Journal 724: 958-80.
60. Peach, J. and C.M. Starbuck. 2010. Oil and Gas Production and Economic Growth in New Mexico. Journal ofEconomic Issues 952: 511-25.
61. Perryman Group. 2007. Bounty from Below: The Impact of Developing Natural Gas Resources Associated with the Barnett Shale on Business Activity in Fort Worth and the Surrounding 14-County Area. Waco, TX: The Perryman Group.
62. Perryman Group. 2008. Drilling for Dollars: An Assessment ofthe Ongoing and Expanding Economic Impact ofActivity in the Barnett Shale on Forth Worth and the Surrounding Area. Waco, TX: The Perryman Group.
63. Perryman Group. 2011. A Decade ofDrilling: The Impact ofthe Barnett Shale on Business Activity in the Surrounding Region and Texas: An Assessment of the First Decade of Extensive Development. Waco, TX: The Perryman Group.
64. Polèse, M. 2009. The Intrusive Rentier Syndrome. The Wealth and Poverty of Regions. Why Cities Matter. Chicago, IL: The University of Chicago Press.
65. Polèse, M. and R. Shearmur. 2006. Why Some Regions will Decline: A Canadian Case Study with Thoughts on Local Economic Development. Papers in Regional Science 85: 23-46.
66. PoliticsPA. 2011. PR Battle Continues Over Marcellus Job Numbers. Available at: http://www.politicspa.com/pr-battle-continues-over-marcellus-jobs-numbers/25734/.
67. PressConnects. 2010. PSU Dean: Marcellus Report Mishandled. Gannet News. Available at: http://www.pressconnects.com/article/20100713/NEWS01/7130381/PSU-dean-Marcellus-report-mishandled.
68. Rabe, B.G. and R.L. Hampton. 2014. The Politics of State Energy Severance Taxes in the Shale Era. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2452848.
69. Roy, A., P. Adams, and A. Robinson. 2013. Air pollutant emissions from the development, production and processing of Marcellus shale natural gas. Journal of the Air & Waste Management Association 64:19-37.
70. Rozell, D. and S. Reaven. 2012. Water pollution risk associated with natural gas extraction from the Marcellus shale. Risk Analysis, 32:1382-1393.
71. Rupasingha, A. and S.J. Goetz. 2013. Self-employment and Local Economic Performance: Evidence from U.S. Counties. Papers in Regional Science 921: 141-61.
72. Sachs, J.D. and A.M. Warner. 1995. Natural Resource Abundance and Economic Growth. National Bureau of Economic Research, Working Paper #5398, Cambridge, MA.
73. Sachs, J.D. and A.M. Warner. 2001. The Curse of Natural Resources. European Economic Review 45: 827-38.
74. Scott, L.C. and Associates. 2009. The Economic Impact of the Haynesville Shale on the Louisiana Economy in 2008. Baton Rouge, LA: Louisiana Department of Natural Resources.
75. Sen, A. 1983. Development: Which Way Now? Economic Journal 93: 745-62.
76. Sontag, D. and B. McDonald. 2014. In North Dakota, a Tale of Oil, Corruption and Death. New York Times. Available at: http://www.nytimes.com/2014/12/29/us/in-north-dakota-where-oil-corruption-and-bodies-surface.html?_r=0.
77. The Economist. 1977. The Dutch Disease. November 26, 82-83.
78. Tsvetkova, A. and M.D. Partridge. 2015. Economics of Modern Energy Boomtowns: Do Oil and Gas Shocks Differ from Shocks in the Rest ofthe Economy? The Ohio State University. Unpublished manuscript.
79. U.S. Energy Information Administration. 2013. West Virginia and Southwest Pennsylvania Form an Integrated Natural Gas Region. Washington DC. Available at: http://www.eia.gov/todayinenergy/detail.cfm?id=12671.
80. U.S. Energy Information Administration. 2001. Petroleum Chronology of Events 1970-2000. Washington DC. Available at: http://www.eia.gov/pub/oil_gas/petroleum/analysis_publications/chronology/petroleumchronology2000.htm.
81. U.S. Energy Information Administration. 2014a. Annual Energy Outlook 2014 with Projections to 2040. Washington DC. Available at: http://www.eia.gov/forecasts/aeo/pdf/03832014.pdf.
82. U.S. Energy Information Administration. 2014b. Petroleum and Other Liquids Data. Washington DC. Available at: http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm.
83. U. S. National Interregional Highway Committee. 1944. Interregional Highways. Message from the President of the United States, Transmitting a Report of the National Interregional Highway Committee, Outlining and Recommending a National System of Interregional Highways. Washington, DC: U.S. Government Printing Office.
84. Van der Ploeg, F. 2011. Natural Resources: Curse or Blessing? Journal of Economic Literature 49: 366-420.
85. Van der Ploeg, F. and A.J. Venables. 2012. Natural Resource Wealth: The Challenges of Managing a Windfall. Annual Review ofEconomics 4: 315-37.
86. Vengosh, A. R. Jackson, N. Warner, T. Darrahl, and A. Kondash. 2014. Environmental Science and Technology. 48: 8334-8348.
87. Weber, J.G. 2012. The Effects of a Natural Gas Boom on Employment and Income in Colorado, Texas, and Wyoming. Energy Economics 34: 1580-8.
88. Weber, J.G., J.P. Brown, and J.L. Pender. 2013. Rural Wealth Creation and Emerging Energy Industries. In Rural Wealth Creation, eds. J.L., Pender, B.A., Weber, T.G., Johnson and J.M., Fannin, 167-84. Routledge.
89. Weber, J.G. 2014. A Decade of Natural Gas Development: The Makings of a Resource Curse? Resource and Energy Economics. 37: 168-83.
90. Weinstein, A. 2014. Local Labor Market Restructuring in the Shale Boom. Journal of Regional Analysis and Policy 44: 71-92.
91. Weinstein, A.L. and M.D. Partridge. 2011. The Economic Value of Shale Natural Gas in Ohio. Columbus, OH: College of Food, Agricultural, and Environmental Sciences, The Ohio State University.
92. Weinstein, A.L. and M.D. Partridge. 2014. The Economic Impact of Shale. Presentation to the North American Regional Science Conference. Bethesda, MD.
93. White, N.E. 2012. A Tale of Two Shale Plays. The Review of Regional Studies 42:107-19.
94. The White House. 2012. Remarks by the President in State of the Union Address. Washington, D.C. Available at https://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address.
95. Wrenn, D.H., T.W., Kelsey, E.C., Jaenicke. 2015. Resident vs. Nonresident Employment Associated with Marcellus Shale Development. Agricultural and Resource Economics Review 44 (2): 1-19. Available at: http://ageconsearch.umn.edu/bitstream/207743/2/ARER2015%2044x2%2001Kelsey.pdf.