Econonomics of Energy and Environmental Policy

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The Effect of Community Reinvestment Funds on Local Acceptance of Unconventional Gas Development

A survey with an embedded experimental design is employed to determine whether local public support for an unconventional gas development (UGD) project is influenced by a policy that commits a portion of private revenues from UGD to the state or local government. The public opinion survey (N = 2,700) oversamples residents living in counties of six states where UGD is technically feasible or underway: New York, Illinois, California, Pennsylvania, Ohio, and Texas. We found that proposing a hypothetical UGD site about two miles from where the resident lives decreases support for local UGD, but this effect is attenuated when residents are informed that their community or state will receive benefits from "reinvestment" of a portion of the revenues generated by a developer. Further, the level of government receiving the reinvestment funds influences the level of local public support for UGD, such that reinvestment in local government is a much stronger predictor of public support than reinvestment in state government. Our findings have implications for understanding the social feasibility of UGD and can have implications for how reinvestment policies should be designed to influence local community attitudes.
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JEL Codes:L51: Economics of Regulation, D12: Consumer Economics: Empirical Analysis, Q41: Energy: Demand and Supply; Prices

Keywords: unconventional gas development, community acceptance, revenue reinvestment

DOI: 10.5547/2160-5890.5.1.npay

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Published in Volume 5, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


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