Oil-Field Govts. Feel Pinch from Price Drop
Oil prices are coming down. While that’s good news for consumers, the rural communities that depend on oil revenue to pay for local government services and infrastructure may have a different experience.
To understand how it might play out, we revisited an earlier report to see how local revenue could change.
The chart at the top shows the decline in revenues associated with the change in oil price. Here’s how we reached that conclusion.
The graphic below shows how production at an average well in North Dakota’s Bakken shale fields declines over time. The data is from DI Desktop and the Duke Energy Initiative. (Drillinginfo” and “DI Desktop” are trademarks of Drilling Info, Inc. and, along with the Drillinginfo data reproduced herein, are used with permission.)
Mark Haggerty is an economist at Headwaters Economics, an independent, nonprofit research group that focuses on the Western United States.