Oil and gas development hurts local economies in long-run, study says

Dec 18, 2013

The resource curse is real -- and discernible even at the county level -- according to a new study from the non-profit research group Headwater Economics.

Researchers looked at more than 200 counties across six western states, and found that those with above-average oil and gas development over a long period of time had lower per capita incomes, less educational attainment and higher crime rates.

Co-author Patty Gude says while that runs counter to the assumption that resource development has positive economic impacts, it’s not actually that surprising.

“People talk broadly about the existence of a quote-on-quote ‘resource curse’ that has to do with specializing in an industry at the exclusion of other forms of economic development," Gude says. "And so it’s not a new concept that there could be economic costs of long-term specialization in a sector like oil and gas.”

And Gude says Wyoming, which had the highest sustained rates of involvement in the oil and gas industry in the study, follows the pattern. 

“From what I can see in the data, there doesn’t really appear to be a single county in Wyoming that bucks the trend,” she says.

The study has been submitted to the Journal of Energy for publication.