April, 2016

Fee Disbursements and the Local Acceptance of Unconventional Gas Development

Insights from Pennsylvania
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Find the paper at Science Direct.

This paper explores the extent to which local public support for an unconventional gas development (UGD) project is associated with public revenues disbursed to county and municipal governments where UGD occurs. Pennsylvania adopted “impact fees” in 2012, which have raised more than $400 million for use by county and municipal governments that host UGD. We designed a public opinion survey (N = 453) that oversamples residents in UGD counties in Pennsylvania to test whether residents in counties and municipalities that received impact fees are more supportive of a hypothetical UGD project than residents in counties and municipalities that received less or no impact fee revenue. We found that impact fee revenue is positively associated with support for the UGD project. Further, the level of government receiving the funds (county versus municipality) is related to public support for UGD: impact fee revenue disbursed to municipal governments is associated with a higher rate of public support than comparable amounts disbursed to county governments, conditional on the respondent being aware of fracking prior to the survey. Our findings are consistent with the literature on public trust in local government and have implications for understanding the social feasibility of UGD in the United States and internationally.