Repository for Oil and Gas Energy Research (ROGER)

Abstract:
We use dynamic panel methods at the state level to understand how the increase in exploration and production of oil and natural gas since the mid-2000s has impacted employment. We find robust statistical support for the hypothesis that changes in drilling do, in fact, have an economically meaningful and positive impact on employment. The strongest impact is contemporaneous, though months later in the year also experience statistically and economically meaningful growth. Once dynamic effects are accounted for, we estimate that an additional rig count results in the creation of 31 jobs immediately and 315 jobs in the long run. Robustness checks suggest that these multipliers could be even bigger. Our results imply that the national impact of upstream investment remains small, perhaps due to the sector's small size and inter-state migration.

Abstract:
This paper quantifies the local economic impacts of hydraulic fracturing. We match extremely detailed oil and natural gas well data to county-level aggregate and sectoral employment data. Controlling for time-varying unobserved determinants of job growth, we find approximately 550,000 local jobs attributable to the shale boom. While this is substantial, it is smaller than previous studies. We also show that the effects are heterogeneous across sectors. Impacts are concentrated in extractive industries, in local non-tradable and service sectors, and in areas with the largest increase in drilling activity.

Abstract:
There has been a recent boom in natural gas and oil production in the US due to high energy prices and technological advances in hydraulic fracturing and horizontal drilling. While North Dakota oil production has increased significantly since 2005 with the development of Bakken formation, the impact on the rest of the economy including agriculture, historically the largest industry in North Dakota, has received little attention. We employ a variant of the Corden-Neary resource development model to test the impact of the oil boom in North Dakota caused by technical change on employment and wages in two tradable sectors of the state economy: agriculture and energy, alongside the rest of the state’s economy, using a Vector Error Correction (VEC) model marking the very first use of the dynamic vector autoregression (VAR) analysis in this theoretical framework. It was determined that the oil boom, as represented by the number of rigs in the state, led to an increase in employment and wages in energy sector, as expected, but also in the rest of the economy. Oil development activity had no significant impact on agricultural wages. Both energy sector equations, employment and wage, suggest relative independence of these variables from the movements in agriculture and the rest of the economy, and being impacted mostly by the changes in energy sector itself. Seasonality does not play significant role in energy sector employment and wages unlike in agriculture and the rest of the economy.

Abstract:
The energy extraction boom of the mid 2000s impacted local economies in areas with substantial shale oil and gas reserves. I examine the impact of the energy boom on the labor market by exploiting a natural experiment in the Marcellus region. In particular, I compare counties with fracking activity in Pennsylvania, Ohio and West Virginia to the control group of counties in New York, which imposed a moratorium and later ban on fracking. I look at how the benefits to the labor demand shock are shared between industries as well as how employment and wages in related industries adjust over the course of the resource boom. The results suggest total employment and wages per job increase by 7% and 11% respectively above pre-boom levels in the three years after the boom, but decline after 4 years or more. The results also show significant positive spillovers to related sectors, such as construction, transportation, retail trade and accommodations. However, there is no evidence of the so called ‘resource curse’ crowding out employment or increasing wages in manufacturing.

Abstract:
There is much debate about the employment effect of shale gas development, especially as it...

Abstract:
New technologies combining hydraulic fracturing and horizontal drilling in oil and gas extraction are creating a sudden expansion of production. Residents of places where deep underground oil and gas deposits are found want to know about the broader economic, social, and environmental impacts of these activities that generate windfall income for some residents. We first review the literature on windfall spending patterns. Then, using the Marcellus region, the earliest area to be tapped using the new techniques, we estimate county-level employment and income effects. For robustness, we employ two methods. Using a propensity score matching approach we find no effect of fracking on income or employment. A panel-fixed effects regression approach suggests statistically significant employment effects in six out of seven alternative specifications, but significant income effects in only one out of seven specifications. In short, the income spillover effects in the Marcellus region appear to be minimal, meaning there’s little incentive at the county level to incur current or potential future costs that may be associated with this activity. We conclude with some ideas on how localities might employ policies that would allow natural gas extraction to move forward, benefitting landowners, while establishing some financial safeguards for the broader community.

Abstract:
This research was funded by the Susquehanna Heartland Coalition for Environmental Studies (SHCES), an organization that "exists to promote collaboration in research, provide environmental education, improve water quality, and address other environmental concerns related to the Susquehanna River Watershed." All statements and conclusions expressed in this manuscript do not represent the views of SHCES or those of Bucknell University. Neither SHCES nor Bucknell influenced the writing of this document or assumed any editing authority. This paper utilizes a Contingent Valuation Method survey of a random sample of residents to estimate that households are willing to pay an average of US$12.00 per month for public projects designed to improve river access and US$10.46 per month for additional safety measures that would eliminate risks to local watersheds from drilling for natural gas from underground shale formations. These estimates can be compared with the costs of providing each of these two amenities to help foster the formation of efficient policy decisions.

Abstract:
Many studies find that areas more dependent on natural resources grow more slowly – a relationship known as the resource curse. For counties in the south-central U.S., I find little evidence of an emerging curse from greater natural gas production in the 2000s. Each gas-related mining job created more than one nonmining job, indicating that counties did not become more dependent on mining as measured by employment. Increases in population largely mitigated a rise in earnings per job and crowding out. Furthermore, changes in the adult population by education level reveal that greater production did not lead to a less educated population.

Abstract:
Improvements in technology have made it profitable to tap unconventional gas reservoirs in relatively impermeable shale and sandstone deposits, which are spread throughout the U.S., mostly in rural areas. Proponents of gas drilling point to the activity's local economic benefits yet no empirical studies have systematically documented the magnitude or distribution of economic gains. I estimate these gains for counties in Colorado, Texas, and Wyoming, three states where natural gas production expanded substantially since the late 1990s. I find that a large increase in the value of gas production caused modest increases in employment, wage and salary income, and median household income. The results suggest that each million dollars in gas production created 2.35 jobs in the county of production, which led to an annualized increase in employment that was 1.5% of the pre-boom level for the average gas boom county. Comparisons show that ex-ante estimates of the number of jobs created by developing the Fayetteville and Marcellus shale gas formations may have been too large.