While high energy prices are hurting consumers, there are ways in which state governments can benefit from the spikes to create more resilient communities in the long-term, Ford School lecturer Daniel Raimi writes in Resources.
“For some states, high energy prices are a boon. In Wyoming, New Mexico, Alaska, North Dakota, Texas, Oklahoma, Louisiana, and even parts of California, Colorado, Ohio, Pennsylvania, and Utah, high energy prices translate into not just jobs, but also surging government revenue,” he writes.
Some of those energy-producing states have invested that revenue for the long-term, while many have not. So, Raimi asks, “if states haven’t invested their natural resource wealth into long-term savings funds over the past several decades, why would they be inclined to do so now?”
He notes that adaption to climate change, in which policies are driving to reduce the economy’s reliance on oil and gas, will give states a window of opportunity for the next decade or so to “make the smart choice to invest the windfall in long-term savings funds and enhancements to local economic diversification, making energy communities more economically resilient—regardless of what happens with climate policy.”
Oil and gas communities can avoid the distressing circumstances that have taken place in former coal-mining communities, which are rife with unemployment and economic decline.
He concludes, “There’s no better time than right now—a moment when oil and natural gas producers are enjoying record profits, and when states are earning record levels of revenue—to update fiscal policy and provide a firmer foundation for future generations.”
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Now’s the Time: How States Can Take Advantage of High Energy Prices, Resources, June 8, 2022