Monday, June 20, 2011

Being Proactive Can Make a Community Sustainable

Being proactive is crucial when it comes to preapring for natural gas development activity. Even those who are fighting to block the industry have to be wondering "What if the industry comes despite our best efforts?... What then?" Despite differences in opinion, agenda, or viewpoints, residents in a local community ALL need to band together and determine ways to maximize the economic potential that comes with the natural gas industry so as to avoid a potential "bust." No one will do it for us, we need to do it for ourselves, for our children and for the future of our towns. This is extremely crucial for the small rural towns - we need to consider all sides of the coin and know exactly what is headed our way and we also need to know exactly how to prepare for it. David Kay's Paper: The Economic Impact of Marcellus Shale Gas Drilling What Have We Learned? What are the Limitations?  present's alot of food for thought for anyone who can be potentially impacted by shale gas recovery activities.  In conclusion, Kay says;

Communities do not face a dogmatically predetermined outcome regarding the long-term economic development implications of drilling in their communities. Those starry eyed by the prospect of previously unimagined community wealth and those fearful of the certainty of economic decline are each looking into futures that are possible, but most likely exaggerated and more importantly not written in stone.
The lesson of the economic impact studies, despite their limitations, is that large scale natural gas drilling would bring a wave of new money to the region. This money would increase the wealth and income of various individuals and communities at least during parts of the Marcellus development cycle.
Even abstracting from the possible worst environmental consequences of extensive drilling, it would also bring new risks and most unavoidably, significant change. Whether natural gas development would lead to economic diversification or overspecialized dependency is an important economic development concern. In relatively diverse local economies, both industry and consumer spending would be more likely to be locally retained, leading to larger multiplier effects. In such local economies, the gas industry would also be more likely to contribute to diversity and to lessen the potential for instability associated with concentration and overdependence on a commodity famous for price volatility in the short run and depletion in the long run.

Even in smaller rural economies without much existing economic diversity, gas development might offer the possibilty of a diversification strategy. However, in such places the potential for a hard boom bust cycle, and for the gas industry’s competition with pre-existing economic anchors, may be the greatest. For some individuals and communities, the wave of big money would likely rise and fall with an abruptness that many would find deleterious even as for others, the wave would be more sustained and positive.
The resource curse and boom/bust literature suggests that communities with anemic governance, and with little capacity to do more than let the volatility of the boom/bust cycle passively wash over them, can face a sobering and diminished future, especially in the longer term. The less well prepared or well positioned are likely to be left pondering the meaning of the words of Sheik Yamani, former oil minister for Saudi Arabia: ‚All in all, I wish we had discovered water.‛ On the other hand, individuals and communities with the wherewithal to capitalize on the large influx of money passing through their communities have the potential to see significant, sustained economic benefits. These communities will understand the transitory and fluctuating nature of extractive wealth, and negotiate smartly and toughly with the gas companies. They will have plans and capacity to in the first place maximize their access to the flows passing through. In the second place they will develop the management strategies to invest boom revenues wisely. They will develop appropriate mitigation, land use and long term capital planning, taxation and investment strategies, and aggressively seek to diversify and stabilize their economies. First and foremost, they will recognize that they cannot vest their future in an industry guaranteed to eventually disappear."

My biggest concern has to do with an old saying "Where two elephants fight the grass suffers." People are too busy fighting and the community that both sides are trying to help suffers the most.

No comments:

Post a Comment