Oil and Gas Revenue Allocation to Local Governments in Eight States

Richard Newell and Daniel Raimi

No 21615, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This report examines how oil and gas production generates revenue for local governments in eight states through four key 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. To compare across states, we show the percentage of total revenue generated by oil and gas production that flows to local governments from these revenue sources. We also connect these calculations to related research to assess whether state and local policies are providing sufficient revenue for local governments to manage increased costs associated with shale development. We find that in most cases, existing policies appear to provide adequate revenue for local governments to manage increased costs associated with growing oil and gas activity. As of 2014, revenues fall short of the costs imposed on local governments in some highly rural regions experiencing rapid, large-scale development, notably the Bakken region of North Dakota and Montana, select counties in Texas, and select local governments in Colorado and Wyoming. Collaboration between industry and local governments, especially on road repairs, could reduce public costs.

JEL-codes: H25 H71 H72 Q4 Q41 Q43 Q48 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-ene and nep-ure
Note: EEE PE
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Citations: View citations in EconPapers (13)

Published as Richard G. Newell, Daniel Raimi, US state and local oil and gas revenue sources and uses, Energy Policy, Volume 112, 2018, Pages 12-18, ISSN 0301-4215, https://doi.org/10.1016/j.enpol.2017.10.002.

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