未来能源研究所-美国西部五个盆地油气生产和地方政府收入的未来评估（英）

AssessingtheFutureofOilandGasProductionandLocalGovernmentRevenueinFive

WesternUSBasins

BrianC.Prest,DanielRaimi,andZachWhitlock

WorkingPaper23-28

June2023

ResourcesfortheFuturei

AbouttheAuthors

BrianC.PrestisaneconomistandfellowatResourcesfortheFuture(RFF)specializingintheeconomicsofclimatechange,energyeconomics,andoilandgassupply.Prestuseseconomictheoryandeconometricstoimproveenergyandenvironmentalpoliciesbyassessingtheirimpactsonsociety.Hisrecentworkincludesimprovingthescientificbasisofthesocialcostofcarbonandeconomicmodelingofvariouspoliciesaroundoilandgassupply.Hisresearchhasbeenpublishedinpeer-reviewedjournalssuchasNature,theBrookingsPapersonEconomicActivity,theJournaloftheAssociationofEnvironmentalandResourceEconomists,andtheJournalofEnvironmentalEconomicsandManagement.HisworkhasalsobeenfeaturedinpopularpressoutletsincludingtheWashingtonPost,theWallStreetJournal,theNewYorkTimes,Reuters,theAssociatedPress,andBarron’s.

DanielRaimiisafellowatRFFandalecturerattheGeraldR.FordSchoolofPublicPolicyattheUniversityofMichigan.Heworksonarangeofenergypolicyissueswithafocusontoolstoenableanequitableenergytransition.HehaspublishedinacademicjournalsincludingScience,ScienceAdvances,EnvironmentalScienceandTechnology,JournalofEconomicPerspectives,ReviewofEnvironmentalEconomicsandPolicy,EnergyResearchandSocialScience,andEnergyPolicy,inpopularoutletsincludingTheNewRepublic,Newsweek,Slate,andFortune,andquotedextensivelyinnationalmediaoutletssuchasCNN,NPR’sAllThingsConsidered,NewYorkTimes,WallStreetJournal,andmanymore.Hehaspresentedhisresearchforpolicymakers,industry,andotherstakeholdersaroundtheUnitedStatesandinternationally,includingbeforetheUSSenateBudgetCommitteeandtheEnergyandMineralResourcesSubcommitteeoftheUSHouse’sNaturalResourcesCommittee.In2017,hepublishedTheFrackingDebate(ColumbiaUniversityPress),abookthatcombinesstoriesfromhistravelstodozensofoil-andgas-producingregionswithadetailedexaminationofkeypolicyissues.

ZachWhitlockisaresearchanalystatRFF.HegraduatedfromtheUniversityofPennsylvaniain2020withaBSEinMaterialsScienceandEngineeringandaBAinEarthScience.HethenearnedhisMPhilinEnvironmentalPolicyfromtheUniversityofCambridge,wherehisdissertationfocusedontrackingtrendsintheclimatechangediscourseofenvironmentallobbyingorganizations.BeforeCambridge,hisresearchinterestslayattheintersectionofmaterialsengineeringandenvironmentalstewardship.PriortojoiningRFF,hecoveredrecentdevelopmentsinvoluntaryESGandclimateinitiativesforLongviewGlobalAdvisors.

AssessingtheofOilandGasProductionandLocalGovernmentRevenueinFiveWesternUSBasinsii

Acknowledgements

WewouldliketothanktheWildernessSociety,particularlyJuliaStuble,foritssupportofthisresearch.ThankyoutoDanielaPasturczakforresearchassistance.ThankstoDeanBangsundofNDSU,LucindaSydowfromtheNewMexicoTaxationandRevenueDepartment,AdamMathiakfromtheNorthDakotaLegislativeCouncil,andLeslieZimmerschiedattheWyomingDepartmentofEducation.

AboutRFF

ResourcesfortheFuture(RFF)isanindependent,nonprofitresearchinstitutioninWashington,DC.Itsmissionistoimproveenvironmental,energy,andnaturalresourcedecisionsthroughimpartialeconomicresearchandpolicyengagement.RFFiscommittedtobeingthemostwidelytrustedsourceofresearchinsightsandpolicysolutionsleadingtoahealthyenvironmentandathrivingeconomy.

Workingpapersareresearchmaterialscirculatedbytheirauthorsforpurposesofinformationanddiscussion.Theyhavenotnecessarilyundergoneformalpeerreview.TheviewsexpressedherearethoseoftheindividualauthorsandmaydifferfromthoseofotherRFFexperts,itsofficers,oritsdirectors.

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Abstract

Oilandgasproductionisamajorsourceofeconomicgrowth,employment,andpublicrevenueinmanyUSregions,butconsiderableuncertaintyexistsoverthefutureofdemandforhydrocarbons,particularlyduetotheneedtoreducegreenhousegasemissions.Toinformdecisionmakersatlocal,regional,andnationallevels,wemodelhowoilandgasproductionandrelatedgovernmentrevenuecouldchangeinfivewesternUSregions(infourstates)dependingonfutureoilandnaturalgaspricesunderthreescenariosofclimatepolicyambition.Ourfindingssuggestthereissubstantialvariationacrossregionsandscenarios:theGreenRiver(Wyoming)andSanJuan(Colorado,NewMexico)basinsexperienceproductiondeclinesacrossallscenarios,whileproductionintheBakken(NorthDakota),Permian(NewMexico),andPowderRiver(Wyoming)basinsaremoredependentonprices.Althoughwefindthatgovernmentrevenuegenerallyfollowsthedirectionofproduction,theserelationshipsarenotdirectlyproportional.Forexample,underthelowerpricescenarios,revenuedeclinesmoresteeplythanproductionbecauseitreflectsbothproductionandprices,whichbothdecline.Long-termpermanentfunds,whichareinplaceacrossallthestatesweexamine,provideanimportantfiscalcushionforschooldistricts,theirprimarybeneficiary.Theseresultshighlighttheimportanceofdevelopingeconomicresilienceinoil-andgas-producingregionstopreventthepotentialnegativeimpactsofalong-termreductionindemandforhydrocarbonsandoflong-termthinkingwhenmanagingvolatileandunpredictablenaturalresourcerevenues.

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Contents

1.Introduction1

2.RelatedResearch2

2.1.Booms,Busts,andthe“ResourceCurse”3

2.1.1.InternationalEvidence3

2.1.2.EvidencefromtheUnitedStates4

2.1.3.EvidencefromtheShaleEra5

2.2.Employment5

2.3.FiscalImpacts6

3.DataandMethods7

3.1.DOGMAModel10

3.2.PublicRevenues12

4.ResultsandDiscussion14

4.1.OilandGasProduction14

4.2.LocalGovernmentRevenue17

4.3.LocalOilandGasEmployment22

5.Conclusion24

6.Appendix25

6.1.DynamicOilandGasMarketAnalysis(DOGMA)Model25

6.1.1.ModelingDrilling26

6.1.2.ModelingtheCompletionofNewlyDrilledWells28

6.1.3.ModelingProductionfromNewlyDrilledWells29

6.1.4.ModelingProductionfromExistingWells30

6.1.5.Aggregation31

6.2.RevenueCalculations31

6.2.1.Colorado31

6.2.2.NewMexico34

6.2.3.NorthDakota39

6.2.4.Wyoming43

7

.References

47

AssessingtheofOilandGasProductionandLocalGovernmentRevenueinFiveWesternUSBasins1

1.Introduction

OilandnaturalgasdevelopmentareimportanttonumerousUSregionaleconomies.Ifthenationandtheworldaretoreducegreenhousegasemissionsandachievea“netzero”economy,demandforoilandnaturalgaswillverylikelydeclineconsiderablyinthedecadesahead(IPCC2022;Raimietal.2022a),withclearconsequencesforregionsmostdependentontheirproductionforemployment,economicactivity,andgovernmentrevenue.

WeconsiderhowaglobalreductionindemandmayaffectsomeoftheUSregionsthataremosteconomicallydependentontheproductionofthesecommodities.WedeploytheDynamicOilandGasMarketAnalysis(DOGMA)model,anoriginalmodelingtooldesignedtoestimatehowUSoilandgasdrillingandproductionactivitychangeinresponsetochangesinmarketprices,policies,andotherfactors.

WeuseDOGMAtoestimatehowproductionchangesunderasetofstylizedscenariosacrossfiveoilandnaturalgasbasinsinfourstates:theBakken(NorthDakota),SanJuan(ColoradoandNewMexico),GreenRiver(Wyoming),Permian(NewMexico),andPowderRiver(Wyoming)basins1Wechoosetheseregionsforseveralreasons:theyaresomeofthemostsignificantUSproducersofoilandgas;theirgeologicalcharacteristicsandproductionhistoriesvaryconsiderably;andtheyincorporateadiversemixofmineralownership,includingsignificantfederal,tribal,state,andprivateownership.

Wethenuseaseriesofstate-specificmodelsrepresentingfederal,tribal,state,andlocalfiscalpolicytoestimatehowoil-andgas-relatedrevenueschangeforlocalgovernmentsunderourscenarios.Finally,weusesimpleemploymentmultiplierstoprovidesomeintuitionofhowregionaloilandnaturalgasemploymentmaychangeunderthesescenarios.

Ourmodelingfocusesexclusivelyontheconsequencesoffuturetrajectoriesofoilandgasdevelopment;wedonotaccountforthepotentialforregionaleconomiestogeneratenewrevenuestreams,suchasfromzero-carbonenergydevelopmentorotherindustries,tosubstituteforpotentialdeclinesinoilandgasrevenue.Hence,ourresultsreflectthepotentialvulnerabilityoflocalcommunitiesiftheyareunabletodevelopnewdriversofeconomicgrowthandtaxrevenue.

1TheBakkenisahydrocarbon-bearinggeologicalformationintheWillistonbasin.ThePermianbasinstretchesacrossNewMexicoandTexas,butwefocusonlyonNewMexi-co.Werefertoallregionsas“basins”forsimplicity.

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2.RelatedResearch

Inrecentyears,policymakersandresearchershaveincreasinglyfocusedontheneedfora“justtransition”thatseekstoensurethatshiftingtonet-zeroemissionsdoesnotexacerbateinequitiesorcreatenewonesrelatedtoenergyproductionandconsumption.Keyprinciplesarticulatedbyscholarsincludetheneedtosupportlow-incomehouseholds,rectifydisproportionateimpactsfrompollution,andensurethatworkersandcommunitiesthatareheavilydependentonfossilfuelsforjobsandgovernmentrevenuecantakeadvantageofneweconomicopportunities(JustTransitionCentre2017;Chaetal.2019;MuttittandKartha2020;JustTransitionFund2020;Looketal.2021).

IninternationalandUScontexts,mosteffortshavefocusedonregionsthatunderwentorareexpectedtoexperienceeconomicshocksduetodecliningcoaldemand(Cecire2019;BlendedFinanceTaskforceandCentreforSustainabilityTransitions2022;Plumer2022).However,theUSoilandnaturalgassectorisconsiderablylargerinitsshareofenergyconsumption,employment,andcontributiontogovernmentrevenue(Raimietal.2022c,2022b).TheUnitedStateshasrecentlybecometheworld’slargestproducerofbothfuels(bp,2021).

Althoughoilandgasdemandcontinuestogrowglobally,net-zeroemissionsgoalsimplyconsiderabledeclineindemandforthesefuelsintheyearsahead.Toaddresstheresultingeconomiceffects,scholarsandpractitionershaveemphasizedtheneedtobuildeconomicresiliencewellinadvanceofmajorchangesintheenergysystem(Haggertyetal.2018;Chaetal.2019;JustTransitionFund,2020).However,verylittleworkhascharacterizedhowanetzerotransitionislikelytoaffectUSoil-andgas-producingcommunities.

Inthissection,wereviewtheliteratureonhowoilandnaturalgascontributetoeconomicgrowthandemploymentininternationalandUScontexts.Thisliteratureexamineshowspecializationinnaturalresourceextractionaffectssocialandeconomicoutcomesovervarioustimescales.Ourgoalistounderstandwhetherandtowhatextentthelessonsfromthisliteraturecaninformdecisionstoboostlocaleconomicresilienceinthefaceofalong-termdeclineinoilandnaturalgasproduction.

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2.1.Booms,Busts,andthe“ResourceCurse”

2.1.1.InternationalEvidence

Thelarge-scaleexploitationoffossilfuelsspurredtheindustrialrevolution,helping togeneratewidespreadprosperity.However,forregionsthathostoilandnaturalgasextraction,theoutcomesforsustainable,long-termeconomicgrowtharecomplex.Forexample,SachsandWarner(1995)observedthatcountriesrichinnaturalresourcesgrewmoreslowlythanresource-poorcountriesfrom1970to1980,reflectinga“resourcecurse.”Underthistheory,exploitingnaturalresourcesdivertsinvestment frommanufacturingactivitiesanddrivesupthepricesofdomesticcommodities,whichunderminesthecompetitivenessofmanufacturedexports.Scholarsnotethat“crowdingout”canextendtoeducationandinnovation,asentrepreneurialactivitymovestowardstheglobalizedandexport-orientednaturalresourceindustry(Gylfason2001).Theresourcecursemayalsoconcentratewealthamongelites,exacerbatingauthoritarianismandpoliticalcorruption(Auty2000).

Otherscholars,however,disputepartsoftheresourcecursehypothesis.AlexeevandConrad(2009),forexample,arguethattheevidenceforacurseasarulerestsonamyopicapplicationofgrossdomesticproduct(GDP)data.Focusingontheoilindustry,theyfindthatcountriesareeconomicallybetteroff,onaverage,iftheyareabletoexploittheirnaturalresourcewealth,assertingthattheslowgrowthofoilproducersinthecontemporaneousperiodreflectsthedepletionoftheirresourcesratherthanaconsequenceoftheirinitialendowment.Furthermore,alackofaccesstoreliabledatabeforethe1960smakesitdifficulttoassesslong-termeconomictrends,particularlyfornationswhereproductionbeganduringthefirsthalfofthe20thcentury.

Lashitewetal.(2021)findthatoutcomesdependinpartonwhichmetricsresearcherschoosetomeasuretheimportanceofnaturalresourcesinagiveneconomy.Forexample,theyfindthatresourcedependence(theshareofresourcesinexportsorGDP)tendstobenegativelyassociatedwithfactorsthatimproveacountry’sglobaleconomiccompetitiveness(e.g.,humancapital,innovationperformance,infrastructurestock,financialaccess),whereasresourceabundance(thelevelofnaturalresourcerentspercapita)tendstohaveamorepositiveeffectonthosesamefactors.Theyfindnosimpleformulaforensuringpositiveeconomicoutcomesbutnotethatoil-richnationshavegenerallystruggledtobuildeconomicdiversificationandinternationalcompetitivenessoutsideoftheoilsector.

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2.1.2.EvidencefromtheUnitedStates

InaUScontext,scholarshavesoughttounderstandtheextenttowhicharesourcecursemayexistatlocalorregionalscales.Inoneanalysisofstates’grossstateproducts(GSP)from1977to2002,Freeman(2009)foundthatasinglepercentincreaseinnaturalresourceintensity(theshareoftotalemploymentinagricultureandmining)correspondedtoahalfpercentreductioninGSPgrowth,similartothefindingsinPapyrakisandGerlagh(2007).ResourceearningswerealsonegativelycorrelatedwithannualgrowthinpercapitapersonalincomeinUScountiesfrom1980to1995(JamesandAadland2011).

Oilandgasresourcesareparticularlysusceptibletoboom-and-bustcyclesthatcompoundthechallengesregionaleconomiesfaceafterspecializinginthesesectors.InastudyofUScounty-leveldatafrom1970to2012,Ouedraogo(2012)estimatesthatgainsinemploymentduringboomperiodswereovershadowedbythelossesafterbusts.Thisfinding,togetherwithevidencethatpositiveshocksformineralresourceextractioncontractedmanufacturinggrowthandattenuatedretailtradeandservicesectoremployment,earnings,andearningsperworker,givesweighttotheresourcecursehypothesis.

However,anational-levelanalysismayobscurehowregionaloutcomesdiffer.Michaels’(2011)studyofoil-abundantcountieswithintheUSSouth(1890–1990)suggeststhatgeographicallyconcentratingoilandgasindustrialactivity—extraction,refining,petrochemicalmanufacturing—improvesresilienceandlocalincomes.Hearguesthatagglomerationincreaseslaborproductivityandpromotesinvestmentintocriticalinfrastructure,suchasairports,whichhaslong-termbenefitsforindustrialdevelopmentacrossmultiplesectors.

IntheAmericanWest,however,wherepopulationsaremoregeographicallydispersed,theseagglomerationeffectsmaybelesslikely.JacobsenandParker(2014)examinecountiesfrom1969through1998,findingthatpercapitaincomesinboomcountieswerelowerthanacounterfactualscenariowheretheboomhadnotoccurred.Similarly,Haggertyetal.(2014)findevidenceofadverseconsequencesoflong-termspecializationinoilandgasextractionfor1980–2011forpercapitaincome,crime,andeducationalattainment.

AnimportantcaveattoallofthesestudiesisthattheUSpricesforandaggregatevaluesofcoal,oil,andnaturalgasproducedduringthetimewhenthestudieswerecarriedoutgenerallydeclined(EIA2012,2).Thistrendsuggeststhatnegativeeconomicoutcomesmayresultfromtheperiodofanalysisratherthandependenceontheresourcesector,perse.

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2.1.3.EvidencefromtheShaleEra

AsUSoilandgasproductionsurgedduringshalerevolution,researchershaveexaminedhowthisboomhasaffectedcommunitiesacrossavarietyofgeographies.Thisworkgenerallyindicatesclearshort-termbenefitsbutofferslessinsightintolong-termoutcomes;insomecases,itsuggeststhatboomscouldreducehumancapitaloverthemediumtolongterms.

Forexample,analysisacrossallmajorproducingregionssuggeststheshaleboomhasdiscouragedhighschoolenrollment(Zuoetal.2018),atrendthatheldforMontana,NorthDakota,andWestVirginia(Rickmanetal.2017),andloweredstudenttestscoresinTexasdespiteincreasingthetaxbaseforthoseschools(MarchandandWeber2020).Althoughresidentialpropertyvaluescanbenegativelyaffectedbyproximitytoshalewells(Muehlenbachsetal.2015),aggregatepropertyvalueshavegenerallyincreasedinregionswithshaledevelopment(WeberandHitaj2015;Weberetal.2016;NewellandRaimi2018a),ashaspersonalincome,particularlyformineralowners(Weber2012;Brownetal.2016).

Inareviewofcommunityimpactsofshaledevelopment,Klasicetal.(2022)highlightfindingsthatwagesincountiesexperiencingboomsclimbedupto10percent,withspillovereffectsthatraisedthewagesofotherindustriesupto17percent.Eachmilliondollars’worthofoilandgasproductionwasshowntoreturnaround$80,000inadditionalwagesandroughly$132,000inbusinessincomeandroyalties.

Forourpurposes,thekeyunansweredquestionintheliteratureiswhetherand

towhatextentalong-termdeclineindemandforoilandnaturalgascouldaffect

localeconomicoutcomes,particularlyifcommunitiesareunabletodevelopnew

contributorsoflocaleconomicgrowth.

2.2.Employment

Manystudiesoftheoilandgasindustryhavefocusedonmodelingitscontributiontolocal,regional,andnationalemployment.In2020,thesectordirectlyemployedroughly100,000people(USCensusBureau2022).However,additionalemploymentoccursinsupportandservicesectors,andstudiesoftenestimatesuchindirectandinducedemployment.Econometricapproaches,whichrelyonhistoricaldataandseektocontrolfornumerousfactorsthroughstatisticaltechniques,suggestthatforeachdirecthire,0.3–0.8jobsareaddedoutsidethesector(Brown2015,2014;Weinsteinetal.2018).Similarly,econometricanalysisindicatesthateachadditionaldrillingrigresultscreatesroughly30jobsimmediatelyand240inthelongrun(Agertonetal.2015;Brown2015).Input–outputapproaches,whichaccountonlyforemploymentchangeswithinagivensector,estimateemploymentmultipliersof1–5(Deck2008;Considineetal.2010,2011;IHS2012;KrupnickandEcharte2017).

Likelocalandregionaleconomiesdependentonoilandnaturalgasextraction,employmentisalsosubjecttotheboom-bustcycle.RecentresearchfromAlberta,Canadaestimatesthatasingledollarchangeintheglobaloilpricealtersregional

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economywideemploymentbynearly1percent(Scheeretal.2022).However,Hafsteadetal.(2022)notethatcertainapproacheswilltendtooverestimatetheeffectofenvironmentalpoliciesandusegeneralequilibriummodelingtoolstosuggestthattheeconomywideemploymentimpactsofchangesintheenergysystemmaybequitemodest.Thesameislikelytrueofchangesindemandforhydrocarbons,whichwillshiftlabordemandfromonesetofenergy-producingactivitiestoanother.

Regardlessoftheaccuracyofanyparticularmodelingapproach,policymakershaveexpressedaclearfocusonpreservingandincreasinghigh-qualityjobsduringatransitiontoanet-zerofuture(e.g.,IEA2022a;WhiteHouse2022).Inaddition,changesinoil-andgas-relatedemploymentmayhaveprofoundeffectsatthecommunitylevel,eveniftheseeffectsaresmallinanationalorglobalscale.Insuchacontext,researchershavearguedthatpolicymakerscanleveragetheexistingskillsetsandinfrastructuresassociatedwiththeoilandgasindustrytotailorregionaleconomicandworkforcedevelopmentefforts(GreensponandRaimi2022;RavikumarandLatimer2022).

2.3.FiscalImpacts

Anotherofthemostprominentpolicyconcernsassociatedwithenergyandnaturalresourcedevelopmentishowitaffectsgovernmentbudgets.Naturalresourcedevelopmentcangeneratesignificanteconomicrents,providingtheopportunityforsubstantialrevenue(Segal2012);thisallowslocalandstategovernmentstotaxothersourcesless,providingnear-termbenefitstocitizensbutcreatingstructuralchallengestotransition(James2015).However,aresourceboomcanstrain