Long-Term Energy Development Has Negative Impacts on Western Counties

This paper demonstrates that when fossil fuel development plays a prominent, long-term role in local western economies there are negative effects on per capita income, crime rates, and educational attainment.

  • For counties that participated in the early 1980s oil and natural gas boom, per capita income declines with longer industry specialization.
  • The longer the duration of oil and gas specialization in the county, the higher the crime rate.
  • For counties that participated in the early 1980s oil and gas boom, educational attainment declines with longer specialization.

maps of long-term impacts of economic dependence on fossil fuel

Prolonged oil and natural gas specialization leads to lower per capita income, more crime, and less educational attainment

This paper (PDF), “Oil and Gas Extraction as an Economic Development Strategy,” and an executive summary (PDF) call into question the assumption that long-term oil and gas development confers a clear economic advantage on host counties.

The study reviews the period 1980 to 2011, analyzing the effect of participation in the early 1980s energy boom and the length of time that counties remained specialized in oil and gas. The boom period of 1980-1982 was selected because it contained the highest share of personal income from oil and gas for each of the six major oil- and gas-producing states in the U.S. West: Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming.

Oil and gas activity can have a strong immediate positive impact on employment and income. Our analysis, however, finds that when fossil fuel development plays a role in a local economy for a long period of time there are negative effects on per capita income, crime rates, and educational attainment.