Shale gas drilling generates sufficient taxes and fees to cover the costs of local government services, such as road repair, waste water services and emergency services, according to a study by Duke University researchers.
Richard Newell and Daniel Raimi of Duke’s Energy Initiative concluded that regions with active drilling generally experience financial benefits from fracking activity.
The October study, “Oil and gas revenue allocation to local governments in eight states,” was part of the Energy Initiative’s Shale Public Finance project and is published on the center’s website. The researchers reviewed public finances in Arkansas, Colorado, Louisiana, Montana, North Dakota, Pennsylvania, Texas and Wyoming.
North Carolina is expected to lift a statewide moratorium on hydraulic fracturing next year and was not included in the Duke study.
The Duke pair said public financing lagged public need only in highly rural regions with rapidly developing energy exploration, like the Bakken shale region in North Dakota and Montana.
The Duke report does not look at corporate income taxes paid by energy companies, but it does consider property taxes, severance taxes, and state and federal lease revenues.
The study says Arkansas generated $58.1 million in local taxes in 2012, while Texas generated $4.5 billion that year. The study considered taxes raised by school districts, school trust funds, counties, municipalities and other local governments.