Removable and Place-Based Economies: Alternative Futures for America’s Deserts - Design with the Desert: Conservation and Sustainable Development - page 292

Contrasted with a gritty “Real West,” amenity-focused communities are often viewed as
interlopers, resented by old-timers and given derisive names like Fanta Se, sometimes well
deserved. Yet studies by Headwaters Economics* show that amenity-based economies
provide far more revenue and income in the West today than extractive industry. Mining
and drilling creates under 3% of real income in the five Western states studied by
Headwaters.
Taxes on highly priced energy resources contribute up to 15% of these state's revenues (a
fact touted by industry at every opportunity, and often exaggerated by as much as a factor
of 3). Yet nonextractive industries, most of them place-focused, provide over half the tax
revenues and 95% of real income.
Amenity-focused towns clearly exploit their environment and resources, too. The
difference is that most work hard (not always successfully, and not necessarily out of
altruism) to protect the biosphere, the cultural institutions, and the local landmarks
(natural or constructed) that attract people and fuel their economies. This is not to say
that all such economies are environmentally harmless, or truly sustainable. Genuinely
“green” industries can create lasting economic value while protecting Place. Real estate
sales, film location rentals, tourist visitation, arts markets, outdoor recreation businesses,
and the like can in theory do the same, though there is a two-edged potential for damage.
The Headwaters studies clearly indicate such economies are becoming more prevalent
and financially successful than extractive industry as economic drivers in the Western
United States.
Although there are many factors that differentiate, say, Farmington and Santa Fe, their
histories since the 1920s are instructive. It was in the 1920s that oil and gas first became
an industry in the Farmington area. In the same period, Santa Fe was down on its luck,
bypassed by the railroad and losing its centuries-old preeminence in New Mexico
commerce. A deliberate decision (still controversial) set the city on what would someday
be called a New West path—becoming an arts colony (today rivaling New York in gallery
sales) that spun off tourism and other place-based industries. Note that a nondestructive
amenity-based product—Santa Fe Style arts and architecture—preceded and drove the
tourism boom.
Billions in petrochemical wealth have been extracted from Farmington (doubly exported,
since much of the resulting profit flowed only to Texas). Yet it is Santa Fe that has seen
the more stable prosperity. Where the oil economy experienced at least three major busts
in the twentieth century, Santa Fe's place-based economy has seemed nearly recession-
proof (Figure 16.4) † including those recessions caused (like those in the 1970s and 2009) by
volatile oil prices. Downturns that deter travel or destroy investments affect communities
of all types—but place-based resources outlast such fluctuations, while resource removal
amplifies instability.
Development using and protecting landscape and cultural resources has great potential
resilience and longevity. This is far less true of development that relies on exportation of
* Headwaters Economics, 2000-2009, at least nine published studies of energy economics in the U.S. West,
available online from http://headwaterseconomics.org/ (accessed August 12, 2011). In analyzing economic
impacts of mining and drilling, Headwaters makes a number of key distinctions, often overlooked in other
studies, and blatantly “spun” in industry publicity. These distinctions involve royalties to private versus
government landowners; severance taxes; local job creation and personal income (versus out-of-state hiring);
and handling of infrastructure necessitated by extractive business (who pays? Industry directly? industry via
taxes and fees? Or taxpayers?) Where any of these questions is ignored, the analysis becomes skewed.
† http://www.santafenewmexican.com/Local%20News/Refuge-from-the-crash (accessed August 12, 2011).
“Refuge from the Great Depression: As the stock market crash of 1929 destroyed lives and economies through-
out the country, Santa Feans largely escaped the bad times.” 8