How Oil and Gas Development Affects Local Governments and

How Oil and Gas Development Affects Local Governments and Communities

Alan Krupnick Co-Director of Center for Energy and Climate Economics

Community Impacts and Interactions Initiative

Traditional Burdens

Air, Surface water groundwater, land

Community Burdens

Noise, light, odor, road accidents, damage, congestion

Local Government impacts

Financial, Staff, Infrastructure, Education

Additional community impacts

Econ development, Property, Relationships, Crime, Health care, housing

Externalities Health, Ecosystem, Economic

MitigationRegulation, Voluntary/best practice, Community Processes

SGD Stages: Initial Assessment Leasing/Permitting Exploration Development Production Plugging and Abandonment

Habitat, soil trash, seismicity

Tourism, Agriculture, Water-using sectors

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TEXT SLIDE FOR TWO COLUMNS Use this option to present text in two columns. Note that the center line can be removed if preferred.

Fiscal Impacts (Newell and Raimi)

Traditional Burdens


Community Burdens











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Leasing

Traditional Burdens


Community Burdens











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Road Damage and Accidents

Traditional Burdens


Community Burdens











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Education

Traditional Burdens


Community Burdens











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Sample State - Colorado

Dropout Rate – A short-lived spike occurred in top producing counties, but ultimately disappeared.

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1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

-

0.01

0.02

0.03

0.04

0.05

0.06

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013C

ompl

etio

ns

Dro

pout

Rat

e

Top Producing Counties

Control Counties

Completions in Prod. Co.

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Interviews in CO cited some early dropouts in the Piceance basin, but did not think there was a long-term effect – due in part to price decline and “higher bar” in the industry. Bakken interviews, which occurred 5+/- years later did not think there was an increase in dropouts.

Solid Waste

Traditional Burdens


Community Burdens











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Wastewater Modeling

Traditional Burdens


Community Burdens











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Siting and Habitat Modeling

Traditional Burdens


Community Burdens











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Industry/Community protocols

Traditional Burdens


Community Burdens











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Inactive Wells Report

Traditional Burdens


Community Burdens











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Thank you

For further questions:[email protected]

Shale Schools Overview

Geography: Colorado, Montana, North Dakota, Ohio, Pennsylvania, and West VirginiaPrimary metrics: Student population, student/ teacher ratio, finances, dropout rate, and test scoresMethodology: Difference in difference complimented by in person interviews


Instructional Expenditures - Despite an oil and gas boom, top producing counties lag control counties and have experienced a net decline since 2000.

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200

400

600

800

1,000

1,200

1,400

1,600

1,800

$5,000

$5,200

$5,400

$5,600

$5,800

$6,000

$6,200

$6,400

$6,600

$6,800

$7,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013M

illio

n M

CF

2014

Rea

l Dol

lars


Control Counties

Gas in Top Counties

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Education funding in CO began to fall during the recession. However, producing counties have been harder hit in total. (See additional note in email.)


Property Taxes – Property tax revenue to schools in top producing counties experienced greater year over year fluctuation.

-15%

-10%

-5%

0%

5%

10%

15%

20%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


Control Counties

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Property taxes make up the majority of revenue for many school districts.

Primary Takeaways from Bakken (ND & MT) InterviewsBoom presented challenges related to student growth (primarily in elementary grades), student mobility (extremely high turnover / recycling), student preparation and new teacher hiring and retention. Few dropouts were reported. Financial health, particularly for new capital projects, relied on voter approval, which varied greatly by district. Interviewees frequently cited frustration with state funding mechanism (East / West divide).

Risk/Benefit Matrix and Modeling

Traditional Burdens


Community Burdens











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Documents

How Oil and Gas Development Affects Local Governments and