**1. Introduction**

Many areas of the United States that were previously largely rural have been and continue to be transformed by population growth and increases in the production of oil and natural gas. As a result of population increases cities have grown and expanded and are now abutting areas set aside for forests, national parks, and areas meant to "be held in public ownership because of their other resource values" [1, 2]. This expansion has contributed to growing levels of recreation on many public lands, which foster economic expansion based on those amenities. At the same time, advances in energy extraction, particularly hydraulic fracturing, has made it possible to extract oil and gas from many areas that were previously not economically or technologically feasible.

Throughout this chapter the terms "energy extraction," "energy resources," and "energy development" are used to refer to the exploration and/or production of oil and natural gas. The term "amenity development" was chosen to describe a variety of activities that contribute to the natural attractiveness and value of a given area, including wilderness or other designated lands, recreation opportunities in

those areas, and agricultural activity. The use of the term "amenity" as a means to describe areas with the presence of natural features comes from the Natural Amenities Scale created by the U.S. Department of Agriculture (USDA), which originally guided our decisions regarding what amenities to describe in this report [3]. The term "amenities" is commonly used to refer to the types of areas and activities discussed in this report, such as "clean beaches, hunting and fishing opportunities, forests to hike in, the view of green farmlands, and clean rivers for recreating in" [4].

It has become common to view energy development and amenity development as mutually exclusive, though this view is by no means dominant in the scholarly literature. This chapter explores the degree to which the two types of activities can coexist and make positive contributions to a county's economic well-being. Three case studies that explore land use and economic outcomes across the spectrum of the energy/amenity plane are presented.

Counties were selected by region based largely on their blend of energy extraction and amenity development. The cases were chosen to illustrate the choices and trade-offs encountered when deciding whether to develop energy, amenities, or both.

#### **1.1 Understanding divergent claims about the role of energy and amenities in economic development**

There has always been debate about how best to develop energy and amenity resources within a county. Opponents of energy development often argue that the oil and gas industry cannot coexist with amenity-based industries. Further, some argue that amenity activities create better economic and employment opportunities than do extraction activities on public or protected lands.

This view that places amenities and energy extraction in conflict has been in part based on research that extrapolates from the positive correlations between amenity resources and economic growth. For example, using the USDA's Natural Amenities Scale, Gebremariam et al. [5] finds a positive although not statistically significant relationship between employment growth rates and a county's amenity rating and it and other similar literature has been used to suggest that that amenity development must occur without extractive industries. Further those extrapolations have suggested that "footloose" entrepreneurs are moving to areas with access to outdoor recreation and avoid those with extractive industries [6–10].

The evidence, however, is far from conclusive on the role amenities play in economic growth. One widely cited article found no evidence that federal wilderness designations within a county affected population-density or total employmentdensity growth in the Intermountain West during the 1980s [11, 12]. Further, counties with designated wilderness areas appear to be held back by relatively low-wage and seasonal service-sector jobs [13, 14] Perhaps because of this, counties with primarily amenity-based growth rarely develop into economically and socially vibrant communities [14].

Further, research by Yonk, Simmons, and Steed [15] finds "a significant negative relationship between the presence of [designated wilderness lands] in county total payroll, county tax receipts, and county average household income."

Though some research promotes one type of development as preferable to another, a more nuanced reading of the literature suggests that counties that try to balance energy extraction activities and amenity development have healthier economies [10, 14, 16].

This chapter is part of a larger project identified five states/regions as having counties with varying levels of energy and amenity development: California,

**23**

\$41,258 [17].

supported<sup>2</sup>

*Developing Together? Understanding the Interaction between, Amenity-Based Tourism…*

Colorado, Utah, the Northern Rockies, and the Northern Plains, during a period of high oil and gas production, namely the period through 2013. This chapter presents three cases from the Northern Rockies Region, but the full set of cases is available

The data used in this study came primarily from the U.S. Census Bureau and the Bureau of Labor Statistics (BLS). For each case study, data from 2001 through 2011 were compiled on a variety of economic indicators ranging from average annual pay to employment by industry sector. Data were also gathered from the U.S. Geological Survey (USGS), U.S. Energy Information Agency (EIA), and USDA. Other quantitative data, such as tax revenues raised from energy extraction industries, were collected by placing calls to county officials and accessing data on state and county

Qualitative data was gathered from a variety of sources including local newspapers, environmental group publications, and county websites. Personal interviews of local residents were also used when possible to explore local reactions to development in each county over time and to illustrate how development had influenced

The states of Montana and Wyoming make up the Northern Rockies area. In these states, whose landscapes and economies are diverse and varied, this study examines Teton County and Sublette County in Wyoming, and Sheridan County in Montana. In the Northern Rockies, the oil and gas industry and the tax revenues it generates play an important role in some county economies. The following cases explore the relationship between amenity development and energy extraction.

Amenities play an important role in Teton County, which has no energy extraction activities. While there are considerable amenity resources in Sublette County, they play a small role in the economy relative to oil and gas. Sublette County is the quintessential boomtown and demonstrates the rapid growth that can result during the start of energy extraction activities. Small, rural communities like Sheridan County rely heavily on tax revenues from the oil and gas industry to cover the costs

Sublette County is most focused on energy development, Sheridan County more

61,065 jobs and contributed

balanced, and Teton County currently without active oil and gas development.

\$7 billion to the state economy in 2009. The average salary of oil and natural gas workers in Wyoming is \$74,538, which is \$33,200 higher than the state average of

Similar economic benefits are observed in Montana, where 40,276 jobs were

economy. The average salary of oil and natural gas workers in Montana is \$72,886,

by energy extraction in 2009, and \$4 billion was contributed to the state

*DOI: http://dx.doi.org/10.5772/intechopen.92111*

on request.

**1.2 Data**

websites.

the lives of residents.

**2. The Northern Rockies**

**2.1 Economic development in the Northern Rockies**

of its school systems and other services.

In Wyoming, the oil and gas industry supported1

<sup>1</sup> This support includes direct, indirect, and induced jobs. <sup>2</sup> This support includes direct, indirect, and induced jobs.

which is much higher than the state average of \$33,244 [18].

*Developing Together? Understanding the Interaction between, Amenity-Based Tourism… DOI: http://dx.doi.org/10.5772/intechopen.92111*

Colorado, Utah, the Northern Rockies, and the Northern Plains, during a period of high oil and gas production, namely the period through 2013. This chapter presents three cases from the Northern Rockies Region, but the full set of cases is available on request.

#### **1.2 Data**

*Perspectives on Economic Development - Public Policy, Culture, and Economic Development*

those areas, and agricultural activity. The use of the term "amenity" as a means to describe areas with the presence of natural features comes from the Natural Amenities Scale created by the U.S. Department of Agriculture (USDA), which originally guided our decisions regarding what amenities to describe in this report [3]. The term "amenities" is commonly used to refer to the types of areas and activities discussed in this report, such as "clean beaches, hunting and fishing opportunities, forests to hike in, the view of green farmlands, and clean rivers for

It has become common to view energy development and amenity development as mutually exclusive, though this view is by no means dominant in the scholarly literature. This chapter explores the degree to which the two types of activities can coexist and make positive contributions to a county's economic well-being. Three case studies that explore land use and economic outcomes across the spectrum of

Counties were selected by region based largely on their blend of energy extraction and amenity development. The cases were chosen to illustrate the choices and trade-offs encountered when deciding whether to develop energy, amenities,

**1.1 Understanding divergent claims about the role of energy and amenities in** 

There has always been debate about how best to develop energy and amenity resources within a county. Opponents of energy development often argue that the oil and gas industry cannot coexist with amenity-based industries. Further, some argue that amenity activities create better economic and employment opportunities

This view that places amenities and energy extraction in conflict has been in part based on research that extrapolates from the positive correlations between amenity resources and economic growth. For example, using the USDA's Natural Amenities Scale, Gebremariam et al. [5] finds a positive although not statistically significant relationship between employment growth rates and a county's amenity rating and it and other similar literature has been used to suggest that that amenity development must occur without extractive industries. Further those extrapolations have suggested that "footloose" entrepreneurs are moving to areas with access to outdoor

The evidence, however, is far from conclusive on the role amenities play in economic growth. One widely cited article found no evidence that federal wilderness designations within a county affected population-density or total employmentdensity growth in the Intermountain West during the 1980s [11, 12]. Further, counties with designated wilderness areas appear to be held back by relatively low-wage and seasonal service-sector jobs [13, 14] Perhaps because of this, counties with primarily amenity-based growth rarely develop into economically and socially

Further, research by Yonk, Simmons, and Steed [15] finds "a significant negative relationship between the presence of [designated wilderness lands] in county total

Though some research promotes one type of development as preferable to another, a more nuanced reading of the literature suggests that counties that try to balance energy extraction activities and amenity development have healthier

This chapter is part of a larger project identified five states/regions as having counties with varying levels of energy and amenity development: California,

than do extraction activities on public or protected lands.

recreation and avoid those with extractive industries [6–10].

payroll, county tax receipts, and county average household income."

**22**

recreating in" [4].

or both.

the energy/amenity plane are presented.

**economic development**

vibrant communities [14].

economies [10, 14, 16].

The data used in this study came primarily from the U.S. Census Bureau and the Bureau of Labor Statistics (BLS). For each case study, data from 2001 through 2011 were compiled on a variety of economic indicators ranging from average annual pay to employment by industry sector. Data were also gathered from the U.S. Geological Survey (USGS), U.S. Energy Information Agency (EIA), and USDA. Other quantitative data, such as tax revenues raised from energy extraction industries, were collected by placing calls to county officials and accessing data on state and county websites.

Qualitative data was gathered from a variety of sources including local newspapers, environmental group publications, and county websites. Personal interviews of local residents were also used when possible to explore local reactions to development in each county over time and to illustrate how development had influenced the lives of residents.

### **2. The Northern Rockies**

The states of Montana and Wyoming make up the Northern Rockies area. In these states, whose landscapes and economies are diverse and varied, this study examines Teton County and Sublette County in Wyoming, and Sheridan County in Montana. In the Northern Rockies, the oil and gas industry and the tax revenues it generates play an important role in some county economies. The following cases explore the relationship between amenity development and energy extraction.

#### **2.1 Economic development in the Northern Rockies**

Amenities play an important role in Teton County, which has no energy extraction activities. While there are considerable amenity resources in Sublette County, they play a small role in the economy relative to oil and gas. Sublette County is the quintessential boomtown and demonstrates the rapid growth that can result during the start of energy extraction activities. Small, rural communities like Sheridan County rely heavily on tax revenues from the oil and gas industry to cover the costs of its school systems and other services.

Sublette County is most focused on energy development, Sheridan County more balanced, and Teton County currently without active oil and gas development. In Wyoming, the oil and gas industry supported1 61,065 jobs and contributed \$7 billion to the state economy in 2009. The average salary of oil and natural gas workers in Wyoming is \$74,538, which is \$33,200 higher than the state average of \$41,258 [17].

Similar economic benefits are observed in Montana, where 40,276 jobs were supported<sup>2</sup> by energy extraction in 2009, and \$4 billion was contributed to the state economy. The average salary of oil and natural gas workers in Montana is \$72,886, which is much higher than the state average of \$33,244 [18].

<sup>1</sup> This support includes direct, indirect, and induced jobs.

<sup>2</sup> This support includes direct, indirect, and induced jobs.

**Table 1** shows that in Sublette and Sheridan counties, average annual pay (reported in nominal dollars) in the upstream oil and gas sector is significantly higher than in the sectors of hospitality and recreation, and agriculture. Teton County does not have pay information in upstream oil and gas due to the lack of petroleum activity, but its hospitality and recreation workers earn slightly more than workers in this same sector in Sublette and Sheridan counties.

**Table 2** shows employment by sector for the civilian employed population over age 16 in Sheridan, Teton, and Sublette counties. Employment in oil and gas is included in the agriculture, forestry, fishing and hunting, and mining sector. As the table shows, Sublette County has the highest percentage employed in this sector. Sheridan County's employment is more mixed, while Teton County has the highest percentage (25.11%) employed in the arts, entertainment, recreation, accommodation, and food services sector.

Small communities in the Northern Rockies often rely on the natural resources available in the county for developing their economic base. This dependence can lead to an uncertain economic climate and cyclical employment, regardless of the natural resources that are being developed. By diversifying their economies,


#### **Table 1.**

*Employment and average annual pay.*


**25**

per day" [22].

ownership [21].

*Developing Together? Understanding the Interaction between, Amenity-Based Tourism…*

Sublette County residents are experiencing the benefits and challenges that come with developing energy and amenity resources in a -rural economy. Surrounded on three sides by wilderness and national forest lands, Sublette County has many amenity opportunities. The county also has concentrated pockets of oil and gas drilling. Both of these industries contribute to the economy, albeit in different ways. County Commissioner Joel Bousman describes the current economic

Sublette is a small ranching community southeast of Jackson Hole. It has only 6000 residents [20]. The county is part of rural Wyoming—there are no stoplights anywhere in the county—where suburban developments are separated by hundreds of miles. A petroleum boom in the county has driven economic growth. While some drawbacks have accompanied this growth, including a reliance on a non-resident workforce and rising costs of living, Sublette County demonstrates the important role that the oil and gas industry can play in providing tax revenue and boosting the

Oil and natural gas extraction occurs away from areas of the county where designated federal lands and wilderness amenities are located. Most extractive activities occur on lands administered by BLM and non-federal lands in the central and southern parts of the county. Parts of the Bridger Wilderness, Teton National Forest, Gros Ventre Wilderness, and Bridger National Forest are located within

The Pinedale Anticline Project Area consists of about 197,000 acres in central Sublette County and is the third largest gas field in the United States [21, 22]. The BLM operates 80% of the anticline's surface. The remaining 20% is divided between the State of Wyoming (5%) and private ownership (15%). Gas reserves in the field are estimated at 40 trillion cubic feet, and the area is one of the most productive fields in the United States [21]. Operators first drilled there in 1939 looking for oil, but abandoned the site when they found gas instead. Subsequent activity in the field was difficult because the tight sandstone formations made conventional drilling methods nearly impossible. However, thanks to improvements in technology and high prices for natural gas in the early 2000s, extraction in the Pinedale Anticline began to flourish. Today, Shell, Ultra Petroleum, and QEP Energy are primary leaseholders in the field. Shell alone has "drilled more than 400 natural gas wells, operating 21,000 acres and producing 350 million cubic feet of natural gas

The Jonah Field, near the Pinedale Anticline, has a similar geographical makeup and was rediscovered in the early 1990s. It is considered one of the most significant recent natural gas discoveries. Covering 21,000 acres, the field is estimated to contain approximately 10.5 trillion cubic feet of natural gas, with 98% of the field managed by the BLM and the remaining portion split between state and private

Production in the Pinedale and Jonah fields began slowly as pipelines and infrastructure were needed to support significant production. However, once the infrastructure was in place, there was a jump from 150 wells in 1999 to 300 wells

climate of Sublette County as both "exciting and challenging" [19].

Sublette County, as well as some Bureau of Reclamation lands.

communities in the Northern Rockies may improve economic outcomes and reduce

*DOI: http://dx.doi.org/10.5772/intechopen.92111*

the magnitude of cyclical fluctuations.

**3. Sublette County, Wyoming**

economy.

**3.1 Energy development**

#### **Table 2.**

*Percent of the civilian population employed by sector.*

communities in the Northern Rockies may improve economic outcomes and reduce the magnitude of cyclical fluctuations.
