Local government revenue from oil and gas production

Oil and gas production generates substantial revenue for state and local governments. This report examines revenue from oil and gas production flowing to local governments through four mechanisms: (i) state taxes or fees on oil and gas production; (ii) local property taxes on oil and gas property; (iii) leasing of state-owned land; and (iv) leasing of federally owned land. We examine every major oil- and gas-producing state and find that the share of oil and gas production value allocated to and collected by local governments ranges widely, from 0.5 percent to more than 9 percent due to numerous policy differences among states. School districts and trust funds endowing future school operations tend to see the highest share of revenue, followed by counties. Municipalities and other local governments with more limited geographic boundaries tend to receive smaller shares of oil and gas driven revenue. Some states utilize grant programs to allocate revenue to where impacts from the industry are greatest. Others send most revenue to state operating or trust funds, with little revenue earmarked specifically for local governments.

Colorado's Piceance Basin: Variation in the local public finance effects of oil and gas development

A large increase in natural gas production occurred in western Colorado’s Piceance basin in the mid- to late-2000s, generating a surge in population, economic activity, and heavy truck traffic in this rural region. We describe the fiscal effects related to this development for two county governments: Garfield and Rio Blanco, and two city governments: Grand Junction and Rifle. Counties maintain rural road networks in Colorado, and Garfield County’s ability to fashion agreements with operators to repair roads damaged during operations helped prevent the types of large new costs seen in Rio Blanco County, a neighboring county with less government capacity and where such agreements were not made. Rifle and Grand Junction experienced substantial oil- and gas-driven population growth, with greater challenges in the smaller, more isolated, and less economically diverse city of Rifle. Lessons from this case study include the value of crafting road maintenance agreements, fiscal risks for small and geographically isolated communities experiencing rapid population growth, challenges associated with limited infrastructure, and the desirability of flexibility in the allocation of oil- and gas-related revenue.

Local fiscal effects of oil and gas development in eight states

Oil and gas production in the United States has increased dramatically in the past 10 years. This growth has important implications for local governments, which often see new revenues from a variety of sources: property taxes on oil and gas property, sales taxes driven by the oil and gas workforce, allocations of state revenues from severance taxes or state and federal leases, leases on local government land, and contributions from oil and gas companies to support local services. At the same time, local governments tend to experience a range of new costs such as road damage caused by heavy industry truck traffic, increased demand for emergency services and law enforcement, and challenges with workforce retention. This report examines county and municipal fiscal effects in 14 oil- and gas-producing regions of eight states: AK, CA, KS, OH, OK, NM, UT, and WV. We find that for most local governments, oil and gas development—whether new or longstanding—has a positive effect on local public finances. However, effects can vary substantially due to a variety of local factors and policy issues. For some local governments, particularly those in rural regions experiencing large increases in development, revenues have not kept pace with rapidly increased costs and demand for services, particularly on road repair.

The Effects of Organic Matter Amendments and Migratory Waterfowl on Greenhouse Gas and Nutrient Dynamics in Managed Coastal Plain Wetlands

Wetland ecosystems provide many valuable ecosystem services, including carbon (C) storage and improvement of water quality. Yet, restored and managed wetlands are not frequently evaluated for their capacity to function in order to deliver on these values. Specific restoration or management practices designed to meet one set of criteria may yield unrecognized biogeochemical costs or co-benefits. The goal of this dissertation is to improve scientific understanding of how wetland restoration practices and waterfowl habitat management affect critical wetland biogeochemical processes related to greenhouse gas emissions and nutrient cycling. I met this goal through field and laboratory research experiments in which I tested for relationships between management factors and the biogeochemical responses of wetland soil, water, plants and trace gas emissions. Specifically, I quantified: (1) the effect of organic matter amendments on the carbon balance of a restored wetland; (2) the effectiveness of two static chamber designs in measuring methane (CH4) emissions from wetlands; (3) the impact of waterfowl herbivory on the oxygen-sensitive processes of methane emission and coupled nitrification-denitrification; and (4) nitrogen (N) exports caused by prescribed draw down of a waterfowl impoundment.

The potency of CH4 emissions from wetlands raises the concern that widespread restoration and/or creation of freshwater wetlands may present a radiative forcing hazard. Yet data on greenhouse gas emissions from restored wetlands are sparse and there has been little investigation into the greenhouse gas effects of amending wetland soils with organic matter, a recent practice used to improve function of mitigation wetlands in the Eastern United States. I measured trace gas emissions across an organic matter gradient at a restored wetland in the coastal plain of Virginia to test the hypothesis that added C substrate would increase the emission of CH4. I found soils heavily loaded with organic matter emitted significantly more carbon dioxide than those that have received little or no organic matter. CH4 emissions from the wetland were low compared to reference wetlands and contrary to my hypothesis, showed no relationship with the loading rate of added organic matter or total soil C. The addition of moderate amounts of organic matter (< 11.2 kg m-2) to the wetland did not greatly increase greenhouse gas emissions, while the addition of high amounts produced additional carbon dioxide, but not CH4.

I found that the static chambers I used for sampling CH4 in wetlands were highly sensitive to soil disturbance. Temporary compression around chambers during sampling inflated the initial chamber CH4 headspace concentration and/or lead to generation of nonlinear, unreliable flux estimates that had to be discarded. I tested an often-used rubber-gasket sealed static chamber against a water-filled-gutter seal chamber I designed that could be set up and sampled from a distance of 2 m with a remote rod sampling system to reduce soil disturbance. Compared to the conventional design, the remotely-sampled static chambers reduced the chance of detecting inflated initial CH4 concentrations from 66 to 6%, and nearly doubled the proportion of robust linear regressions from 45 to 86%. The new system I developed allows for more accurate and reliable CH4 sampling without costly boardwalk construction.

I explored the relationship between CH4 emissions and aquatic herbivores, which are recognized for imposing top-down control on the structure of wetland ecosystems. The biogeochemical consequences of herbivore-driven disruption of plant growth, and in turn, mediated oxygen transport into wetland sediments, were not previously known. Two growing seasons of herbivore exclusion experiments in a major waterfowl overwintering wetland in the Southeastern U.S. demonstrate that waterfowl herbivory had a strong impact on the oxygen-sensitive processes of CH4 emission and nitrification. Denudation by herbivorous birds increased cumulative CH4 flux by 233% (a mean of 63 g CH4 m-2 y-1) and inhibited coupled nitrification-denitrification, as indicated by nitrate availability and emissions of nitrous oxide. The recognition that large populations of aquatic herbivores may influence the capacity for wetlands to emit greenhouse gases and cycle nitrogen is particularly salient in the context of climate change and nutrient pollution mitigation goals. For example, our results suggest that annual emissions of 23 Gg of CH4 y-1 from ~55,000 ha of publicly owned waterfowl impoundments in the Southeastern U.S. could be tripled by overgrazing.

Hydrologically controlled moist-soil impoundment wetlands provide critical habitat for high densities of migratory bird populations, thus their potential to export nitrogen (N) to downstream waters may contribute to the eutrophication of aquatic ecosystems. To investigate the relative importance of N export from these built and managed habitats, I conducted a field study at an impoundment wetland that drains into hypereutrophic Lake Mattamuskeet. I found that prescribed hydrologic drawdowns of the impoundment exported roughly the same amount of N (14 to 22 kg ha-1) as adjacent fertilized agricultural fields (16 to 31 kg ha-1), and contributed approximately one-fifth of total N load (~45 Mg N y-1) to Lake Mattamuskeet. Ironically, the prescribed drawdown regime, designed to maximize waterfowl production in impoundments, may be exacerbating the degradation of habitat quality in the downstream lake. Few studies of wetland N dynamics have targeted impoundments managed to provide wildlife habitat, but a similar phenomenon may occur in some of the 36,000 ha of similarly-managed moist-soil impoundments on National Wildlife Refuges in the southeastern U.S. I suggest early drawdown as a potential method to mitigate impoundment N pollution and estimate it could reduce N export from our study impoundment by more than 70%.

In this dissertation research I found direct relationships between wetland restoration and impoundment management practices, and biogeochemical responses of greenhouse gas emission and nutrient cycling. Elevated soil C at a restored wetland increased CO2 losses even ten years after the organic matter was originally added and intensive herbivory impact on emergent aquatic vegetation resulted in a ~230% increase in CH4 emissions and impaired N cycling and removal. These findings have important implications for the basic understanding of the biogeochemical functioning of wetlands and practical importance for wetland restoration and impoundment management in the face of pressure to mitigate the environmental challenges of global warming and aquatic eutrophication.