The Effects of Federal, State, and Private Oil and Gas Ownerships on County Wages in the Intermountain West

• Main Author: Crabb, Benjamin A.
• Format: Others
• Published: DigitalCommons@USU 2016
• Subjects: county wages; land ownership; oil and gas; Intermountain West; regional development; Economics
• Online Access: https://digitalcommons.usu.edu/etd/4929; https://digitalcommons.usu.edu/cgi/viewcontent.cgi?article=5975&context=etd

Advances in drilling technology and increasing resource prices contributed to a boom in oil and natural gas production in the Western U.S. in the first decade of the 2000s. Following the boom, a strain of state-level legislation emerged calling for the transfer of federal lands to the states. A justification for the proposed transfers is the claim that state management will responsibly increase oil and gas production levels currently held back by federal regulations and management. However, a substantial literature indicates that dependence on mineral wealth can be a problematic economic development strategy resulting in slower growth and other undesirable socioeconomic outcomes. Using geological variation in oil and gas abundance in the Intermountain West, this study examined the effects of resource abundance on county wage levels and growth rates over the period 1990 to 2010. Areas of oil and gas abundance were further classified by federal, state, and private surface land ownership to examine institutional ownership effects on wage levels and growth rates. Overall oil and gas abundance was shown to have a positive impact on wage levels and growth rates, while institutional ownerships were found to have significantly differing effects on county wages. State ownership was usually associated with higher wage levels and growth rates than federal ownership, likely due to a lengthy permitting process for drilling on federal lands. Private ownership had insignificant effects on local wages, likely due to absentee ownership. The results provide no evidence of a ‘curse of natural resources’ in the region and lend a modicum of support to state land transfer bills.