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.

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.

Morphological characteristics of urban water bodies: mechanisms of change and implications for ecosystem function.

The size, shape, and connectivity of water bodies (lakes, ponds, and wetlands) can have important effects on ecological communities and ecosystem processes, but how these characteristics are influenced by land use and land cover change over broad spatial scales is not known. Intensive alteration of water bodies during urban development, including construction, burial, drainage, and reshaping, may select for certain morphometric characteristics and influence the types of water bodies present in cities. We used a database of over one million water bodies in 100 cities across the conterminous United States to compare the size distributions, connectivity (as intersection with surface flow lines), and shape (as measured by shoreline development factor) of water bodies in different land cover classes. Water bodies in all urban land covers were dominated by lakes and ponds, while reservoirs and wetlands comprised only a small fraction of the sample. In urban land covers, as compared to surrounding undeveloped land, water body size distributions converged on moderate sizes, shapes toward less tortuous shorelines, and the number and area of water bodies that intersected surface flow lines (i.e., streams and rivers) decreased. Potential mechanisms responsible for changing the characteristics of urban water bodies include: preferential removal, physical reshaping or addition of water bodies, and selection of locations for development. The relative contributions of each mechanism likely change as cities grow. The larger size and reduced surface connectivity of urban water bodies may affect the role of internal dynamics and sensitivity to catchment processes. More broadly, these results illustrate the complex nature of urban watersheds and highlight the need to develop a conceptual framework for urban water bodies.