Rapid change in the energy sector often brings fiscal risk — and potential volatility — for rural communities in West Virginia and beyond, creating challenges for local leaders who want to ensure economic growth and prosperity.
A multidisciplinary research team led by West Virginia University is working to develop data-driven insights to help policymakers ensure economic resilience amid energy changes with a $100,000 grant from the Resilient Energy Economies initiative, a partnership between the Bezos Earth Fund, which provided funding for the research, Resources for the Future, Columbia University, Montana State University and the University of Notre Dame.
The university’s Regional Research Institute and Institute for Policy Research and Public Affairs are partnering with the nonprofit Center on Rural Innovation for the study, which will examine the varying impacts of changes in the energy mix on local public finance, revenues and spending, and economic outcomes.
The project involves an in-depth scientific analysis of public finance data from the U.S. Census Bureau and the West Virginia State Auditor’s Office. The results will be used to provide guidance for policymakers on public finance strategies to address potential financial shortfalls caused by changes in the energy sector and help ensure local governments have the financial resources to provide necessary services and infrastructure to their communities.
“Many communities benefit financially from coal, oil and natural gas development through increased tax revenues and direct payments, but these revenues can vary based on the price of energy and the amount of production,” Heather Stephens, director of the Regional Research Institute, said. “At the same time, communities experiencing energy booms may simultaneously face increased service demands and costs.
“The decisions local policymakers make about how to invest in their communities and how to deal with the volatility and risk associated with changes in energy production and its impact on local revenues can be crucial to their economic vitality. Our hope is that this study will help us better understand how to build resilience and support long-term economic development in energy-dependent rural regions nationwide.”
The research team’s results will be presented at academic conferences and shared via peer-reviewed journal articles and summaries posted online. The project team will also be available to discuss the results and policy implications with lawmakers, community leaders and other stakeholders, including the media.
“This research has the potential to strengthen small-town economies to promote stability and future prosperity, ultimately improving the lives and well-being of those living in West Virginia and broader Appalachia,” Sam Workman, director of the Institute for Policy Research and Public Affairs, said. “We are grateful to the Bezos Earth Fund and the Resilient Energy Economies initiative for recognizing the merits of this project and providing generous support. We hope to leverage our results to secure additional grant funding for a larger research project focused on promoting economic development in energy-dependent communities.”
The Resilient Energy Economies initiative helps fossil fuel-dependent communities across America develop strategies to support their local economies. The Bezos Earth Fund partnered with Resources for the Future and the Center on Global Energy Policy at Columbia University to create the REE initiative in 2023 to fund research and bring together scholars and practitioners to develop strategies that build economic resilience.
The Resilient Energy Economies grant was awarded through the WVU Foundation, the nonprofit organization that receives and administers private donations on behalf of the University and its affiliated entities.
The WVU Foundation Office of Corporate and Foundation Relations facilitates philanthropic relationships and investments that support the University’s land-grant mission to ignite economic prosperity, develop world-class solutions and forge the next generation of problem-solvers prepared with the tools and know-how to solve the world’s intractable challenges.
