Switch to Full View

Energy in America, its Economic Impacts on Communities Throughout America

The Economic Development Research Partners, EDRP, which is the think tank for the International Economic Development Council, has published a new report: “The Changing Energy Landscape and its impact on economic development in America”. It is an in-depth insight on how energy is affecting communities and jobs throughout the U.S. From the decline of coal, the boom and bust of jobs that fracking has created, and the steady growth of renewable energy, each sector has unique problems for economic developers to overcome as they work with communities and local governments.

Coal has been on the decline for over 20 years, yet it is not until recently that coal mining communities received exposure in the media, and the country gained awareness of their struggle. It is a unique problem to transition coal miners into alternative jobs as they are affected by their location, their level of development, and the tradition of generations working in the same industry. The report highlights special cases where communities were successfully transitioned into good jobs. Progress was not achieved with just training new job skills. Each community needs to be studied to discover their capacities, and opportunities. In Kentucky, coal miners are now manufacturing aerospace components; New Mexico now has communities that work remotely for employers nationwide; In West Virginia, land was reappropriated and repurposed for agriculture, with mentorship programs and government assistance, there are new opportunities for jobs and development. The report highlights the importance of identifying what each community is capable of in order to create a transition that is sustainable, and provides good quality jobs for the community.

With advances in shoal mining and fracking, natural gas and oil now offers the U.S. an opportunity to achieve energy independence. This development has also created a boom for jobs as new pumps and drills are being built for extractions. States which are experiencing an influx of people, industry and employment, are now in a position where they have to provide infrastructure and services to meet the new demands. This can be challenging for the local governments who need to capture the revenue generated from the spontaneous industry, but do not have the policy in place to do so. In Texas, counties have limits to how much they can increase property taxes, so they have a limited capacity to increase or maintain their revenue in the instances the counties experience a boom or price drop in oil. North Dakota’s state government had to funnel money down to the counties on the Bakken shale, as all tax revenues were going directly to the state, but the counties were in dire need of additional funding to meet the infrastructure demands from the boom of oil drilling operations. Natural gas has also experienced booms in response to the development of fracking techniques, and while fracking is not allowed throughout the country, some states have still partaken in the boom of new extraction techniques. In Maryland, fracking was banned in 2017 while neighboring states do use fracking to extract natural gas. Even though Maryland is not extracting at the same rate, they are experiencing the gas boom by having the only liquified natural gas import terminal in the mid-atlantic. The report has further case studies on how states had to balance boom and busts, and industry and environmental concerns while the energy industry continues to transition with its advances in technology and extraction techniques.

Renewable energy has created thousands of new jobs while overcoming unique obstacles. Federal government has been supportive in launching the technology, but the support places strict demands to companies that receive their aid. Such is the case with Elon Musk’s solar cell manufacturing company Solar City. They are building SolarCity Gigawatt Factory 2 in Buffalo, New york, the largest solar manufacturing plant in the Western Hemisphere. Solar City is receiving $1 billion dollars in tax breaks for building in New York, but if they are to avoid paying a $41 million annual fee they need to; generate 1,460 jobs in their first year of operation, 5,000 jobs in the long-term, and $5 billion worth of investments. Other case studies look at the foresight of some states by facilitating the development of renewable energy in their states. One case study reviews how Iowa’s progressive policy with wind energy made it a top pick for tech companies when locating their data centers. The report reveals that the transition to renewable energy is ongoing but still has its unique challenges and discusses how communities need to adapt to the new demands, and local governments have to go through their own transitions in order to capture the opportunities of new industry developing within their borders.

IEDC members can download the report at no cost from the IEDC Bookstore and non-members can purchase it for $75.00.