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Unconventional Gas and Oil Development in the United States: Economic Experience and Policy Issues

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  • Timothy W. Kelsey
  • Mark D. Partridge
  • Nancy E. White

Abstract

This paper examines the economic experience of past energy booms and that of current unconventional shale gas and oil development. We focus on key economic characteristics of gas and oil production such as its employment potential, its geography, and its boom-bust nature. This background is used to discuss important economic policy issues arising with unconventional oil and gas development such as taxation, governmental use of those revenues, preemption, and equity in the distribution of costs and benefits. The paper concludes with economic policy recommendations for states and communities affected by such development including not viewing oil and gas development as an effective long-run economic development strategy, leveraging short-run financial gains from the development into permanent advantages, and strengthening the capacity for local governments to understand and manage this activity.

Suggested Citation

  • Timothy W. Kelsey & Mark D. Partridge & Nancy E. White, 2016. "Unconventional Gas and Oil Development in the United States: Economic Experience and Policy Issues," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 191-214.
  • Handle: RePEc:oup:apecpp:v:38:y:2016:i:2:p:191-214.
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    Cited by:

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    2. Dong, Xiao & Klaiber, Allen & Gopalakrishnan, Sathya & Wrenn, Douglas H., 2018. "Silence of Falling Trees: Hidden Forest Loss from Shale Gas Development," 2018 Annual Meeting, August 5-7, Washington, D.C. 274446, Agricultural and Applied Economics Association.
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    4. Brian E. Whitacre & Dylan L. Johnston & David W. Shideler & Notie H. Lansford, 2020. "The influence of oil and natural gas employment on local retail spending: evidence from Oklahoma panel data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 133-157, February.
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    6. Isha Rajbhandari & Alessandra Faggian & Mark Partridge, 2020. "Migrants and boomtowns: micro evidence from the U.S. shale boom," Discussion Paper series in Regional Science & Economic Geography 2020-11, Gran Sasso Science Institute, Social Sciences, revised Dec 2020.
    7. Cai, Zhengyu & Maguire, Karen & Winters, John V., 2018. "Who Benefits from Local Oil and Gas Employment? Labor Market Composition in the Oil and Gas Industry in Texas," GLO Discussion Paper Series 246, Global Labor Organization (GLO).
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    10. Weinstein, Amanda L. & Partridge, Mark D. & Tsvetkova, Alexandra, 2018. "Follow the money: Aggregate, sectoral and spatial effects of an energy boom on local earnings," Resources Policy, Elsevier, vol. 55(C), pages 196-209.
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    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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