Grants

PI: Emily Grubert, University of Notre Dame

Although many Native nations in the United States have vocally opposed fossil fuel projects, particularly oil pipelines such as Dakota Access, Line 3,and Line 5, some nations (such as the Crow, Jicarilla Apache, MHA, Navajo, Southern Ute, and more) are major producers of fossil fuels. Despite the environmental damage this production causes on reservation lands and beyond, the economic contribution of fossil fuels in terms of employment and government revenue for these Native nations are significant, and decarbonization poses major economic risks for them. However, very little scholarship—outside of the work led by Curley—has sought to understand the scale of this risk and identify potential solutions. In this project, Curley will interview members and leaders of oil- and gas-producing nations to understand how they can diversify their economies, and how the federal government can support those goals while recognizing the sovereignty of tribal governments.

Co-PIs: Alex James and David Aadland, University of Wyoming

Wyoming’s state economy is largely dependent on the production of coal, oil, and natural gas for much of its employment and fiscal revenue. The transition away from fossil-fuel use and the gradual decrease in production necessitates that Wyoming adapts is fiscal policy and seeks economic diversification through non-fossil-fuel industries. In this project, we first examine the risk to Wyoming’s state budget due to decreases in public mineral revenues by conducting long-term forecasts of Wyoming’s economy under the fossil-fuel transition, simulating effects of these changes on expected fiscal revenue, estimating the historical impacts of resource busts on public good provision, and exploring gaps in Wyoming’s public good provisions that hinder the attraction of non-fossil-fuel industries. We then shift our focus to identifying alternative avenues of growth for Wyoming focusing on five emerging industries: nuclear, quantum computing, outdoor recreation, sustainable agriculture, and nonthermal uses for coal. In doing so, we analyze the industry’s supply chain, identify barriers to the industry’s introduction in the state, and estimate the employment and fiscal impacts of the industry’s introduction.

PI: Noah Kaufman, Center on Global Energy Policy at Columbia University

The Biden administration has put place-based investments at the center of its economic agenda. Congress has passed numerous large spending bills, each with sizable place-based policy elements, including funding directed specifically to fossil fuel-dependent communities. For example, the American Rescue Plan is providing over a half billion dollars to the Economic Development Administration to assist coal communities; the Bipartisan Infrastructure Bill invests tens of billions of dollars in major energy projects and remediation efforts; and the Inflation Reduction Act includes considerable spending that is targeted to clean energy projects in these communities. The funding that specifically targets fossil fuel communities only scratches the surface of the additional new place-based funding available to these communities (e.g., for roads, bridges, clean drinking water, lead pipes, broadband, technology hubs, project-specific loans, etc.). This research project will seek to evaluate the economic outcomes associated with funds from recent legislation spent in fossil communities to identify what is and isn’t working.

PI: Eleanor Krause, University of Kentucky

This project systematically examines the impact of the clean energy transition, as experienced to date, on workers, families, and local economies. Using a rich, administrative microdata infrastructure combining detailed employer and employee characteristics, we first assess how the recent decline in demand for coal has affected exposed workers on a range of outcomes, including employment, earnings, population mobility, social insurance participation, and mortality. We analyze these outcomes across different worker characteristics and across regions to understand the role of labor market frictions in preventing the smooth adjustment to the energy transition. Second, we compare the characteristics of workers employed at establishments that exit and enter energy communities over the past decade to determine whether new and ongoing investments in these areas could help mitigate transitional costs for workers.

PI: David Popp, Syracuse University

This project evaluates whether municipal debt and the underlying assets pose financial risks to communities reliant on oil and natural gas extraction. Based on the results, it will recommend what, if any, policy actions federal and state governments can take to address these risks. To accomplish this, we will analyze the degree to which the shale boom in the United States caused oil- and natural gas-reliant communities to incur incremental municipal debt relative to communities that were not directly impacted by the shale boom. In addition, we will assess the extent to which this debt poses a long-term risk to these communities, referred to here as energy communities. The combination of substantial investment by energy communities in public assets during the shale boom may have resulted in energy communities carrying an increased level of municipal debt and an expanded portfolio of debt-financed public assets (e.g., education, transportation, and wastewater physical infrastructure). Future declines in U.S. oil and natural gas production due to the energy transition may lead energy communities to downsize in response. Downsizing could, in turn, leave these communities with unproductive debt payments and upkeep costs on assets that are no longer useful. These asset costs could, in turn, undermine community resilience by reducing adaptive capacity. We will analyze these issues using quantitative and qualitative assessments of municipal debt accumulation and associated financial management strategies. Based on these analyses, we will offer policy recommendations to mitigate potential financial risks related to debt and public assets in energy communities.

PI: Daniel Raimi, Resources for the Future and University of Michigan

Most existing research on fossil communities in the US, as well as state and federal policy, has focused on coal mining and coal-fired power communities. But transitions in oil and gas will be critical to a low-carbon economic transformation. To develop effective policies that build sustainable economies in oil- and gas-producing regions, decisionmakers need to understand the objectives and priorities of local stakeholders, as well as the mechanisms that can effectively deliver support in the years ahead. Decisionmakers also need to understand differences and similarities across the dozens of US regions that depend heavily on oil and gas production. Using interviews, bringing together a small group of researchers and federal policy makers onsite in oil- and gas- producing regions, this research project will identify ways that federal assistance can be delivered more effectively to support economic development and diversification.

PI: Laurel Wheeler, University of Alberta Department of Economics and Federal Reserve Bank of Minneapolis Center for Indian Country Development
Co-PI: Lucija Muehlenbachs, Professor, University of Calgary Department of Economics and Resources for the Future

When wells reach the end of their productive lives, oil- and gas-producing communities face dual problems of environmental liabilities and loss of employment opportunities. Recent government initiatives in North America have sought to address both problems through subsidies for the final cleanup of oil and gas wells. In this project, we will examine a provincially implemented Canadian federal program that subsidized well cleanup, specifically targeting First Nations communities through allowing for well nominations from First Nations and an incentive to hire Indigenous-owned service companies. Our research will examine the extent to which targeted subsidies to mitigate the risks of inactive wells affect the economic and environmental resilience of Native communities and shed light on whether programs like this one can serve as an engine for economic growth in fossil fuel-dependent communities more generally.