Mitigating Socioeconomic Impacts of Energy Development

The current emphasis on accelerating the development of energy resources has heightened concern in some communities and regions of the country about their ability to mitigate the social and economic effects associated with such development. GAO studied how three energy rich regions, the Rocky Mountain region, Appalachia, and the coastal zone, were responding to the current and expected impacts of energy development and federal, state, and local resources available to plan for and mitigate the impacts in these regions.

The direct federal role in assisting these communities has changed. The two programs established to assist these communities have had a significant portion of their fiscal year (FY) 1981 appropriations rescinded, no funds have been appropriated for FY 1982, and no funds will be requested for FY 1983. Increases in energy development could result in economic prosperity in the form of increased employment, higher income, and an increased tax base, or they could cause adverse impacts if local governments cannot accommodate the population increases associated with development. Communities situated near energy resources face uncertainties as to the timing and pace of development, and there will be differences in the ability and willingness of states and communities to address the impacts. The Rocky Mountain area and portions of the coastal zone are looking for ways to control development, while Appalachia and other parts of the coastal zone are concerned with out-migration and deteriorating infrastructure. Some communities have been more adversely impacted than others, and communities in all three regions have utilized a variety of federal programs to meet their needs. However, under the President's economic recovery program, some of the programs will be eliminated, some will be consolidated into block grants, and others will experience reduced funding. Communities will have to depend more on alternative sources, including internally generated revenues and state and industry funding. State governments should take the lead in meeting these needs.