Energy Booms Research Articles

THE ECONOMY OF THE EUROPEAN REGION A CASE STUDY OF GREEN LOW-CARBON DEVELOPMENT

This article conducts a general literature review, examining whether the European Region economy is on board with green low-carbon development. The research focused on synthesizing information from existing literature on events such as sustainability, green economy, energy booms and shock effects. These systems, policies and implementation examples of Europe have found a wide place in the literature. Based on the synthesis obtained by bringing together this information, the article discusses the economic, social and aggressive dimensions of green low-carbon development. This synthesis aims to shed light on potential strategies and policy recommendations to guide the European Region's economy towards a sustainable future.

Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts

AbstractConsumer debt is an important vehicle for smoothing through income shocks. I study localized income shocks from oil and gas development to investigate consumer response. Using quarterly information on consumer debt and oil and gas activity between 2000 and 2016, I find that consumer debt increased at a peak of $660 per capita, equivalent to 1.3% of median household income in counties with shale endowment and increased drilling. Shocks to local wages via drilling revealed a marginal propensity to borrow of 0.45. Relative to areas with oil and gas development experience, the marginal propensity to borrow was two times larger in previously undeveloped areas.

Does fracking drive you to drink? Unconventional oil and gas production and alcohol consumption in U.S. counties

Unconventional drilling technologies like hydraulic fracturing and directional drilling have markedly increased oil and gas production in the United States while also bringing production in proximity with many communities. Foundational research in rural sociology predicts the rise of local “boomtown” problems like excessive alcohol consumption as a result of sudden energy booms. In this paper, we use data from U.S. counties to understand the relationship between energy production and alcohol consumption. Results suggest that oil and gas production has very modest effects on binge drinking and heavy drinking, and that these effects may vary by gender and across U.S. states.

The impact of energy booms on local workers

The impact of energy booms on local workers

Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts

Local shocks in oil and gas development may lead consumers to increase their spending. Using quarterly information on consumer debt and oil and gas activity between 2000 and 2016, I find that consumer debt increased at a peak of $840 per capita, equivalent to 1.7 percent of median household income in counties with shale endowment and increased drilling. Shocks to local wages via drilling revealed a marginal propensity to consume from debt of 0.45. Relative to areas with oil and gas development experience, the marginal propensity to consume was 70 percent larger in previously undeveloped areas.

Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts

Consumer debt is an important vehicle for smoothing through income shocks. I study localized income shocks from oil and gas development to investigate consumer response. Using quarterly information on consumer debt and oil and gas activity between 2000 and 2016, I find that consumer debt increased at a peak of $660 per capita, equivalent to 1.3% of median household income in counties with shale endowment and increased drilling. Shocks to local wages via drilling revealed a marginal propensity to borrow of 0.45. Relative to areas with oil and gas development experience, the marginal propensity to borrow was two times larger in previously undeveloped areas.

Economics of modern energy boomtowns: Do oil and gas shocks differ from shocks in the rest of the economy?

The US shale boom has intensified interest in how the expanding oil and gas sector affects local economic performance. Research has produced mixed results and has not compared how energy shocks differ from equal-sized shocks elsewhere in the economy. What emerges is that the estimated impacts of energy development vary by region, empirical methodology, as well as the time horizon that is considered. This paper captures these dimensions to present a more complete picture of energy boomtowns. Utilizing US county data, we estimate the effects of changes in oil and gas extraction employment on total employment growth as well as growth by sector. We compare this to the effects of equal-sized shocks in the rest of the economy to assess whether energy booms are inherently different. The analysis is performed separately for nonmetropolitan and metropolitan counties using instrumental variables. We difference over 1-, 3-, 6-, and 10-year time periods to account for county-fixed effects and to assess responses across different time horizons. The results show that in nonmetro counties, energy sector multiplier effects on total county employment first increase up to 6-year horizons and then decline for 10-year horizons. We also observe positive spillovers to the non-traded goods sector, while spillovers are small or negative for traded goods. In metro counties, there are no significant effects on total employment, although positive spillovers are present in some sectors. Yet, equal-sized shocks in the rest of the economy produce more jobs on average than oil and gas shocks, suggesting that policymakers should seek more diversified development.

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

AbstractThis 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.

Impacts of unconventional gas development on rural community decline

This paper looks at the impact of a new extractive industry, namely unconventional natural gas, on rural decline. Rural decline is defined as comprising loss of rural youth, reduced human capital and increasing rural poverty. Since the start of the current century, the unconventional natural gas industry has been expanding around the world, often in close proximity to pre-existing agricultural communities. The social impacts of this new industry represent a growing area of interest in rural studies. We contribute to this new research area through a case study of coal seam gas (CSG) development in Queensland, Australia, comparing regions where gas development occurred between 2001 and 2011 against a control group of similar regions without gas development. The study eliminated the influence of non-resident workforces by analysing census data based on place of usual residence as well as place of enumeration. A key finding of the study is that regions with CSG development have experienced a growing youth share of the population and, of particular note, a growing female youth share of the population. CSG regions had a higher proportion of youth with university degrees and advanced technical training compared to other rural regions. Poverty reduction was also observed in some specific CSG regions. The extensive spatial footprint of unconventional gas and increased female rural youth populations indicate a diversion from traditional boomtown social impacts observed in previous energy booms. Taken together, the results show signs of mitigating and reversing rural community decline.

The Legacy of Extraction

The Legacy of Extraction

Manufacturing Sector Resiliency to Energy Booms: Empirical Evidence from Norway, the Netherlands and the United Kingdom

A natural resource based export boom can increase overall national wealth and improve a country's balance of payments position, but leave some sectors in a protracted and costly adjustment process. This phenomenon is known as disease, a term associated with the difficulties experienced by the Dutch manufacturing sector after the natural gas boom, hike in world energy prices and expansion of the gas-revenue financed government sector expansion in the Netherlands. This paper reviews the theoretical predictions of a country experiencing a resource boom. It then briefly describes the country experiences of the Netherlands, Norway and the United Kingdom in this regard and finally develops a methodology for a more formal statistical analysis designed to shed light on the relationships between the energy sector and manufacturers in these countries, as well as to identify other potential explanatory factors.

The Economic Effects of North Sea Oil on the Manufacturing Sector

This paper analyses the economic effects of the oil and gas sector (energy booms) on manufacturing output in two energy producing countries: Norway and the UK. In particular, I investigate whether there is evidence of a ‘Dutch disease’, that is whether energy booms have had adverse effects on manufactures. In addition to energy booms, three other types of structural disturbances are identified; demand, supply and oil price shocks. The different disturbances are identified by imposing dynamic restrictions on a vector autoregressive model. Overall, there is only weak evidence of a Dutch disease in the UK, whereas manufacturing output in Norway has actually benefited from energy discoveries and higher oil prices

Quasi-Experimental Control Group Methods for Regional Analysis: An Application to an Energy Boomtown and Growth Pole Theory

This paper constitutes an argument for the use of quasi-experimental control group methods as a measurement technique to study economic and spatial structural change. The essence of such methods is the careful identification of a control group-a set of places whose economic development enables measurement of what would have happened in the place under study without the phenomenon or policy being studied. The quasi-experimental approach can be used in economic geography for basic research and planning and policy studies, including measuring the effects of highway investment, airline service, plant closings, tourism activities, dam construction, development initiatives, energy booms, and growth poles. Examples of the last two applications are provided here to illustrate the use and potential of the method.