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Expand chart
Reproduced from report from Columbia University's Center on Global Energy Policy and Resources for the Future; Chart: Axios Visuals

The federal government should take new steps to help oil-producing regions navigate boom-and-bust cycles and diversify their economies, two nonpartisan think tanks say in a new report.

Why it matters: The decade-long oil boom has transformed the U.S. into the world’s largest producer. But that growth has increased the number of communities vulnerable to market volatility.

What they found: The report from Resources for the Future and a Columbia University energy think tank suggests two main policies.

  1. Congress should instruct the Department of Commerce’s Economic Development Administration to provide grants to oil producing communities and fund economic diversification for those regions.
  2. The government should create an Oil Volatility Advisory Board to connect oil producing regions with experts from departments like Commerce and Energy, and help those areas take advantage of existing funding opportunities. The authors say this is more politically feasible since it could be implemented by the executive branch alone.

Where it stands: The biggest risk to oil-heavy communities in places like eastern New Mexico and west Texas is becoming overly dependent on oil production, which can crowd out investment in other sectors — leading to a non-diverse economy that doesn't do well long-term.

  • Oil and gas producers shed one-third of their labor force in the three years after prices crashed in 2014, as seen in the above charts.
  • "[In] my personal experience, local officials are not looking to the federal government as a resource to help them navigate these new challenges related to volatility," Resources for the Future analyst Daniel Raimi tells Axios — adding that "a modest effort" at the federal level could make a difference.

Between the lines: "I don’t know if either of those options are likely to be adopted, but given Washington’s celebration of the oil boom, it seems like there may be some appetite," Raimi says. "Our main goal is to simply put the issue on the table."

Go deeper: The shale boom has become a check on the market's long-term volatility

Go deeper

Why made-for-TV moments matter during the pandemic

Photo illustration: Sarah Grillo/Axios. Photos: Erin Schaff-Pool, Biden Inaugural Committee via Getty Images

In a world where most Americans are isolated and forced to laugh, cry and mourn without friends or family by their side, viral moments can offer critical opportunities to unite the country or divide it.

Driving the news: President Biden's inauguration was produced to create several made-for-social viral moments, a tactic similar to what the Democratic National Committee and the Biden campaign pulled off during the Democratic National Convention.

Updated 8 hours ago - World

Over 3,000 detained in protests across Russia demanding Navalny's release

Russian police officers beat protestesters at a rally against of jailing of oppositon leader Alexei Navalny in Moscow on Saturday. Photo: Mikhail Svetlov/Getty Images

Police in Russia on Saturday arrested more than 3,300 people as protesters nationwide demanded that opposition leader Alexey Navalny be released from jail.

Details: Demonstrations began in the eastern regions of Russia and spread west to more than 60 cities.

Updated 10 hours ago - Politics & Policy

Arizona Republicans censure Cindy McCain and GOP governor

Combination images of Cindy McCain and Gov. Doug Ducey. Photo: FilmMagic/FilmMagic for U.S.VETS/Michael Brochstein/SOPA Images/LightRocket via Getty Images

Arizona Republican Party members voted on Saturday to censure prominent GOP figures Cindy McCain, Gov. Doug Ducey and former Sen. Jeff Flake (R-Ariz.), who've all faced clashes with former President Trump.

Why it matters: Although the resolution is symbolic, this move plus the re-election of the Trump-endorsed Kelli Ward as state GOP chair shows the strong hold the former president has on the party in Arizona, despite President Biden winning the state in the 2020 election.