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.

Oil and gas projects in the Western Amazon: threats to wilderness, biodiversity, and indigenous peoples.

BACKGROUND: The western Amazon is the most biologically rich part of the Amazon basin and is home to a great diversity of indigenous ethnic groups, including some of the world's last uncontacted peoples living in voluntary isolation. Unlike the eastern Brazilian Amazon, it is still a largely intact ecosystem. Underlying this landscape are large reserves of oil and gas, many yet untapped. The growing global demand is leading to unprecedented exploration and development in the region. METHODOLOGY/PRINCIPAL FINDINGS: We synthesized information from government sources to quantify the status of oil development in the western Amazon. National governments delimit specific geographic areas or "blocks" that are zoned for hydrocarbon activities, which they may lease to state and multinational energy companies for exploration and production. About 180 oil and gas blocks now cover approximately 688,000 km(2) of the western Amazon. These blocks overlap the most species-rich part of the Amazon. We also found that many of the blocks overlap indigenous territories, both titled lands and areas utilized by peoples in voluntary isolation. In Ecuador and Peru, oil and gas blocks now cover more than two-thirds of the Amazon. In Bolivia and western Brazil, major exploration activities are set to increase rapidly. CONCLUSIONS/SIGNIFICANCE: Without improved policies, the increasing scope and magnitude of planned extraction means that environmental and social impacts are likely to intensify. We review the most pressing oil- and gas-related conservation policy issues confronting the region. These include the need for regional Strategic Environmental Impact Assessments and the adoption of roadless extraction techniques. We also consider the conflicts where the blocks overlap indigenous peoples' territories.

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 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.

Impacts of shale gas wastewater disposal on water quality in western Pennsylvania.

The safe disposal of liquid wastes associated with oil and gas production in the United States is a major challenge given their large volumes and typically high levels of contaminants. In Pennsylvania, oil and gas wastewater is sometimes treated at brine treatment facilities and discharged to local streams. This study examined the water quality and isotopic compositions of discharged effluents, surface waters, and stream sediments associated with a treatment facility site in western Pennsylvania. The elevated levels of chloride and bromide, combined with the strontium, radium, oxygen, and hydrogen isotopic compositions of the effluents reflect the composition of Marcellus Shale produced waters. The discharge of the effluent from the treatment facility increased downstream concentrations of chloride and bromide above background levels. Barium and radium were substantially (>90%) reduced in the treated effluents compared to concentrations in Marcellus Shale produced waters. Nonetheless, (226)Ra levels in stream sediments (544-8759 Bq/kg) at the point of discharge were ~200 times greater than upstream and background sediments (22-44 Bq/kg) and above radioactive waste disposal threshold regulations, posing potential environmental risks of radium bioaccumulation in localized areas of shale gas wastewater disposal.

Implications of shale gas development for climate change.

Advances in technologies for extracting oil and gas from shale formations have dramatically increased U.S. production of natural gas. As production expands domestically and abroad, natural gas prices will be lower than without shale gas. Lower prices have two main effects: increasing overall energy consumption, and encouraging substitution away from sources such as coal, nuclear, renewables, and electricity. We examine the evidence and analyze modeling projections to understand how these two dynamics affect greenhouse gas emissions. Most evidence indicates that natural gas as a substitute for coal in electricity production, gasoline in transport, and electricity in buildings decreases greenhouse gases, although as an electricity substitute this depends on the electricity mix displaced. Modeling suggests that absent substantial policy changes, increased natural gas production slightly increases overall energy use, more substantially encourages fuel-switching, and that the combined effect slightly alters economy wide GHG emissions; whether the net effect is a slight decrease or increase depends on modeling assumptions including upstream methane emissions. Our main conclusions are that natural gas can help reduce GHG emissions, but in the absence of targeted climate policy measures, it will not substantially change the course of global GHG concentrations. Abundant natural gas can, however, help reduce the costs of achieving GHG reduction goals.

Dunn County and Watford City, North Dakota: A case study of the fiscal effects of Bakken shale development

The Bakken region of North Dakota and Montana has experienced perhaps the greatest effects of increased oil and gas development in the United States, with major implications for local governments. Though development of the Bakken began in the early 2000s, large-scale drilling and population growth dramatically affected the region from roughly 2008 through today. This case study examines the local government fiscal benefits and challenges experienced by Dunn County and Watford City, which lie near the heart of the producing region. For both local governments, the initial growth phase presented major fiscal challenges due to rapidly expanding service demands and insufficient revenue. In the following years, these challenges eased as demand for services slowed due to declining industry activity and state tax policies redirected more funds to localities. Looking forward, both local governments describe their fiscal health as stronger because of the Bakken boom, though higher debt loads and an economy heavily dependent on the volatile oil and gas industry each pose challenges for future fiscal stability.

Identifying the Structure and Fate of Wastewater Derived Organic Micropollutants by High-resolution Mass Spectrometry

Human activities represent a significant burden on the global water cycle, with large and increasing demands placed on limited water resources by manufacturing, energy production and domestic water use. In addition to changing the quantity of available water resources, human activities lead to changes in water quality by introducing a large and often poorly-characterized array of chemical pollutants, which may negatively impact biodiversity in aquatic ecosystems, leading to impairment of valuable ecosystem functions and services. Domestic and industrial wastewaters represent a significant source of pollution to the aquatic environment due to inadequate or incomplete removal of chemicals introduced into waters by human activities. Currently, incomplete chemical characterization of treated wastewaters limits comprehensive risk assessment of this ubiquitous impact to water. In particular, a significant fraction of the organic chemical composition of treated industrial and domestic wastewaters remains uncharacterized at the molecular level. Efforts aimed at reducing the impacts of water pollution on aquatic ecosystems critically require knowledge of the composition of wastewaters to develop interventions capable of protecting our precious natural water resources.

The goal of this dissertation was to develop a robust, extensible and high-throughput framework for the comprehensive characterization of organic micropollutants in wastewaters by high-resolution accurate-mass mass spectrometry. High-resolution mass spectrometry provides the most powerful analytical technique available for assessing the occurrence and fate of organic pollutants in the water cycle. However, significant limitations in data processing, analysis and interpretation have limited this technique in achieving comprehensive characterization of organic pollutants occurring in natural and built environments. My work aimed to address these challenges by development of automated workflows for the structural characterization of organic pollutants in wastewater and wastewater impacted environments by high-resolution mass spectrometry, and to apply these methods in combination with novel data handling routines to conduct detailed fate studies of wastewater-derived organic micropollutants in the aquatic environment.

In Chapter 2, chemoinformatic tools were implemented along with novel non-targeted mass spectrometric analytical methods to characterize, map, and explore an environmentally-relevant “chemical space” in municipal wastewater. This was accomplished by characterizing the molecular composition of known wastewater-derived organic pollutants and substances that are prioritized as potential wastewater contaminants, using these databases to evaluate the pollutant-likeness of structures postulated for unknown organic compounds that I detected in wastewater extracts using high-resolution mass spectrometry approaches. Results showed that application of multiple computational mass spectrometric tools to structural elucidation of unknown organic pollutants arising in wastewaters improved the efficiency and veracity of screening approaches based on high-resolution mass spectrometry. Furthermore, structural similarity searching was essential for prioritizing substances sharing structural features with known organic pollutants or industrial and consumer chemicals that could enter the environment through use or disposal.

I then applied this comprehensive methodological and computational non-targeted analysis workflow to micropollutant fate analysis in domestic wastewaters (Chapter 3), surface waters impacted by water reuse activities (Chapter 4) and effluents of wastewater treatment facilities receiving wastewater from oil and gas extraction activities (Chapter 5). In Chapter 3, I showed that application of chemometric tools aided in the prioritization of non-targeted compounds arising at various stages of conventional wastewater treatment by partitioning high dimensional data into rational chemical categories based on knowledge of organic chemical fate processes, resulting in the classification of organic micropollutants based on their occurrence and/or removal during treatment. Similarly, in Chapter 4, high-resolution sampling and broad-spectrum targeted and non-targeted chemical analysis were applied to assess the occurrence and fate of organic micropollutants in a water reuse application, wherein reclaimed wastewater was applied for irrigation of turf grass. Results showed that organic micropollutant composition of surface waters receiving runoff from wastewater irrigated areas appeared to be minimally impacted by wastewater-derived organic micropollutants. Finally, Chapter 5 presents results of the comprehensive organic chemical composition of oil and gas wastewaters treated for surface water discharge. Concurrent analysis of effluent samples by complementary, broad-spectrum analytical techniques, revealed that low-levels of hydrophobic organic contaminants, but elevated concentrations of polymeric surfactants, which may effect the fate and analysis of contaminants of concern in oil and gas wastewaters.

Taken together, my work represents significant progress in the characterization of polar organic chemical pollutants associated with wastewater-impacted environments by high-resolution mass spectrometry. Application of these comprehensive methods to examine micropollutant fate processes in wastewater treatment systems, water reuse environments, and water applications in oil/gas exploration yielded new insights into the factors that influence transport, transformation, and persistence of organic micropollutants in these systems across an unprecedented breadth of chemical space.

Fearonomics and the Role of Nigeria's Private Sector in the Nigerian Ebola Response

Background: Outbreaks of infectious diseases such as Ebola have dramatic economic impacts on affected nations due to significant direct costs and indirect costs, as well as increased expenditure by the government to meet the health and security crisis. Despite its dense population, Nigeria was able to contain the outbreak swiftly and was declared Ebola free on 13th October 2014. Although Nigeria’s Ebola containment success was multifaceted, the private sector played a key role in Nigeria’s fight against Ebola. An epidemic of a disease like Ebola, not only consumes health resources but also detrimentally disrupts trade and travel to impact both public and private sector resulting in the ‘fearonomic’ effect of the contagion. In this thesis, I have defined ‘fearonomics’ or the ‘fearonomic effects’ of a disease as the intangible and intangible economic effects of both informed and misinformed aversion behavior exhibited by individuals, organizations, or countries during an outbreak. During an infectious disease outbreak, there is a significant potential for public-private sector collaborations that can help offset some of the government’s cost of controlling the epidemic.

Objective: The main objective of this study is to understand the ‘fearonomics’ of Ebola in Nigeria and to evaluate the role of the key private sector stakeholders in Nigeria’s Ebola response.

Methods: This retrospective qualitative study was conducted in Nigeria and utilizes grounded theory to look across different economic sectors in Nigeria to understand the impact of Ebola on Nigeria’s private sector and how it dealt with the various challenges posed by the disease and its ‘fearonomic effects'.

Results: Due to swift containment of Ebola in Nigeria, the economic impact of the disease was limited especially in comparison to the other Ebola-infected countries such as Liberia, Sierra Leone, and Guinea. However, the 2014 Ebola outbreak had more than a just direct impact on the country’s economy and despite the swift containment, no economic sector was immune to the disease’s fearonomic impact. The potential scale of the fearonomic impact of a disease like Ebola was one of the key motivators for the private sector engagement in the Ebola response.

The private sector in Nigeria played an essential role in facilitating the country’s response to Ebola. The private sector not only provided in-cash donations but significant in-kind support to both the Federal and State governments during the outbreak. Swift establishment of an Ebola Emergency Operation Centre (EEOC) was essential to the country’s response and was greatly facilitated by the private sector, showcasing the crucial role of private sector in the initial phase of an outbreak. The private sector contributed to Nigeria’s fight against Ebola not only by donating material assets but by continuing operations and partaking in knowledge sharing and advocacy. Some sector such as the private health sector, telecom sector, financial sector, oil and gas sector played a unique role in orchestrating the Nigerian Ebola response and were among the first movers during the outbreak.

This paper utilizes the lessons from Nigeria’s containment of Ebola to highlight the potential of public-private partnerships in preparedness, response, and recovery during an outbreak.