News Room (164)

…A recent Headwaters Economics report found that a majority of Montana’s wildland-urban interface property was undeveloped. It concluded that limiting that development would be a cost-effective way of controlling future firefighting costs and ensuring public safety.…

…“We used to say public lands were for resource development and tourism,” said Ray Rasker executive director of Headwaters Economics, a nonpartisan research group that produced one of the studies. “Now we are saying that resource development and tourism are still there, but now people want to live next to these places. It determines where people locate their businesses, for example.”…

…Mark Haggerty, an analyst with Headwaters Economics in Montana, who has studied how shale oil booms have played out in other states, said local governments often wait two years to get the bulk of the tax revenue that comes from fracking.

That’s because production taxes don’t kick in until a well is producing oil, long after a community is beset by transient workers and truck traffic. The same goes for severance taxes on oil and gas taken from the ground, which would flow to the state’s coffers. Property taxes aren’t levied until after an assessment is made and aren’t paid immediately.

“These communities can fall behind pretty quickly,” Haggerty said. At stake is an estimated 4 billion barrels of oil, an amount equal to what Illinois has historically produced through traditional drilling, according to the Illinois Oil and Gas Association. The U.S. Energy Information Administration said the New Albany shale play, which encompasses parts of Illinois, Indiana and Kentucky, also holds 11 trillion cubic feet of shale gas. That’s enough to meet the needs of about 5 million households for 30 years, according to the American Gas Association.…

…Williston, a city at the centre of the resources boom, is struggling to adapt. Here, a one-room apartment costs $2,000 a month (in Fargo, the state’s largest city, it can cost $450). Ad hoc settlements called “man camps” have sprung up, but housing shortages force many to live in caravans, mobile homes and even their own cars.

Average wages have risen by $19,800, or 80.3%, since 2000. An influx of male workers in the three main oil counties means there are at least 1.6 single young men (aged 18-34) for every single young woman. Little wonder that strippers in Williston are said to earn up to $3,000 a night in tips.

Some are worried that a bust will follow the boom—just as it did 30 years ago. One oil-services firm says growth will slow if prices drop to below $80 a barrel. Julia Haggerty, an analyst at Headwaters Economics, fears that economies that are rich in resources tend to underinvest in education and infrastructure, and fail to diversify their economies enough. Locals can take comfort from the fact that last year North Dakota ranked second among all states in entrepreneurship, with strong growth in new businesses.

Headwaters Economics points to growing wage gaps in the west of the state. In 2001 the average teacher and health-service worker earned about $34,000 less than oil and gas employees did. In 2011 this gap was $63,000. Rising salaries and an inflow of uninsured labourers working in dangerous occupations are causing problems in hospitals. The New York Times reports that unpaid bills have caused the debt of McKenzie County Hospital to climb by 2,000% during the past four years, to $1.2m. Three years ago the hospital saw 100 emergency visits per month; last year the monthly average was 400.…

…A new study released today by Montana’s Headwaters Economics – an independent research group that compiles federal and regional statistics into research aimed at improving community development and land management decisions – shows that Colorado’s federally protected national parks, wilderness areas and monuments are driving economic growth. The study of Colorado and the West reports that Western non-metro counties with more than 30 percent of lands federally protected enjoyed a 345 percent increase in jobs since 1970 while non-metro counties with no protected lands saw only 83 percent job growth in the same period.

It’s not just the host communities that are thriving.

"The lands immediately surrounding these federally protected areas are the fastest growing," said Ray Rasker , the executive director of Headwaters Economics who describes himself as an "economic geographer."

Dispelling the notion that land protection hinders economic development, Rasker’s research points to Colorado’s vast collection of federal land – 36 percent of the state – as a primary driver in growing the state’s economy.…

…Mark Haggerty, an economist with Headwaters Economics, a nonpartisan, nonprofit economic research group, studied the Bakken. “About one-third of all the gas there is just being flared off,” he said. “It’s just not what they’re after.”

Between the Eagle Ford and the Bakken, it’s estimated that five billion barrels of good oil will be produced before the wells either go dry or are no longer economically feasible. According to Hughes, that’s about a 10-month supply of oil for the United States — not exactly a game changer.

At first, Haggerty said, gas companies estimated that once the field was drilled out, “it would produce 3.5 million barrels of oil a day. The reality is that it will probably only reach one million barrels daily in the next two years, and then it will start dropping off.”

For Haggerty, the dropoff will not only affect the bottom lines of the companies invested in tight oil and shale gas but also the communities from which those resources are extracted.

“We’ve done a lot of work looking at tax revenues versus the costs to the community,” he said. “And the real issue is: How does a community cope with what happens after the boom goes bust? You want the drilling for the tax revenue and royalties and jobs it creates. But at some point the impacts generated by the industry — the industrial and social impacts — simply outstrip the benefits of drilling. And for some communities, in the long run, they can wind up worse than they might have been if there had been no drilling at all.”…

…"As the weather becomes more extreme across the nation, so does the threat of fire," said Joe Dougherty, spokesman for the Utah Division of Emergency Management. "Utahns are encouraged to know their risks, take action and be an example to others."

The warning comes as a report by the nonpartisan research group Headwaters Economics shows that 84 percent of private lands near fire-prone wildland-urban interface areas remain undeveloped in the West.The group says firefighting costs greatly increase in such developed areas because of the desire to protect houses.…

Ray Rasker, director of Headwaters Economics, said the rise in wildland firefighting costs because of urban encroachment is a problem widely recognized, but it gets little discussion.

“Where the conversation gets stuck nationally on this is that people say, `Yes, it is a problem, but what do you do about it?’” he said.…

…“We’ll never see a change in the cost of firefighting unless there is local cost accountability,” says Ray Rasker, executive director of Headwaters Economics in Bozeman, Mont., an independent, non-partisan research firm that has analyzed the costs of western wildfires for the past decade.
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…A recent report by Headwaters Economics used 2010 U.S. Census data to map development in the wildland urban interface in 11 Western states and county by county in each state.

The analysis, which includes an interactive data map, shows that 84 percent of private lands near fire-prone areas remains undeveloped in the West. If just half of that land is developed in the future, the report warns that annual firefighting costs could escalate to as much as $4.3 billion. As a comparison, the organization notes the entire budget for the U.S. Forest Service is $5.5 billion.

"The point of this report is that fires are awfully expensive and they have been getting more expensive over time," said Ray Rasker, Headwaters’ director. "While homes are not the only factor, they are a contributing one."…

…Outdoor recreation and protected lands help the local economy. Recent studies by Headwaters Economics, a non-partisan, independent, nonprofit research group, have found that jobs and real personal income rose in local communities after nearby areas were permanently protected. That same potential is offered by the Berryessa Snow Mountain region.…