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Assessing the Future of Oil and Gas Production and Local Government Revenue in Five Western US Basins

Author

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  • Brian Prest
  • Daniel Raimi
  • Zachary D. Whitlock

Abstract

Oil and gas production is a major source of public revenue in many US regions, but uncertainty exists over the future of demand for hydrocarbons. We model how oil and gas production and related government revenue change in five western US basins depending on future oil and natural gas prices under three scenarios of climate policy ambition. We find that the Green River and San Juan basins experience production declines across all scenarios, while production in the Bakken, Permian, and Powder River basins are more dependent on prices. Government revenue generally follows the direction of production, but these relationships are not directly proportional. Under the lower price scenarios, revenue declines more steeply than production because it reflects both production and prices, which both decline. Long-term permanent funds, which are in place across all the states we examine, provide an important fiscal cushion for school districts, their primary beneficiary. JEL Classification : H71, H72, H73, O13, Q41, Q48

Suggested Citation

  • Brian Prest & Daniel Raimi & Zachary D. Whitlock, 2025. "Assessing the Future of Oil and Gas Production and Local Government Revenue in Five Western US Basins," The Energy Journal, , vol. 46(1), pages 45-65, January.
    • Handle: RePEc:sae:enejou:v:46:y:2025:i:1:p:45-65
    DOI: 10.1177/01956574241290609
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    More about this item

    Keywords

    oil and gas production; energy transition; local public finance; oil and gas modeling;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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