Emerging Energy Industries and Rural Growth

Expansion of emerging energy industries—unconventional natural gas extraction, wind power development, and corn-based ethanol production—in rural areas of the United States during the last decade has led, on average, to net gains in local employment. Unconventional natural gas (so-called because it uses unconventional extraction methods— hydraulic fracturing and horizontal drilling—to reach gas trapped in relatively impermeable shale and sandstone) had the biggest employment effect, largely reflecting the scale of the activity. Despite its relatively large employment effect, the effect of natural gas development is smaller than what prior simulation models projected. Estimates of employment impacts for wind turbines and ethanol plants, in contrast, are consistent with some earlier projections. This report synthesizes and builds on findings from recent studies led by U.S. Department of Agriculture, Economic Research Service researchers investigating the local economic effects of these energy industries