A Tale of Three Cities: Lessons on Economic Development from the Birthplace of the Oil Industry

This report presents seven lessons learned from research and stakeholder interviews conducted in northwestern Pennsylvania-an area that was once the hub of oil production in the United States-on strategies to strengthen the economic resilience of these communities.

Date

July 15, 2026

Authors

Daniel Raimi, Christina Cilento, and Noah Kaufman

Publication

Reading time

As oil- and gas-producing communities across the United States grapple with uncertain economic futures, valuable lessons can be drawn from the region where the modern petroleum industry was born.

This report is the fifth in a series exploring the strategies US oil- and gas-producing regions may pursue in building economic resilience to a changing energy landscape. While oil- and gas-producing communities face both short- and long-term economic risks-from price volatility to the rise of alternative energy sources-relatively little policy attention has focused on strategies that can help these communities boost their economic resilience.

Here, we present lessons learned from research and stakeholder interviews in the "Oil Region" in northwestern Pennsylvania, namely the region's three largest cities: Oil City, Franklin, and Titusville. Once the hub of oil production in the United States (with an oil boom that began in 1859), the region saw a steady decline in oil activity across the twentieth century. The Oil Region's ongoing economic evolution offers valuable insights both for communities whose economies today rely on oil and gas extraction, as well as for state and federal policymakers seeking to support similar communities' economic development.

Figure ES1. Mural Illustrating Titusville's Evolution and Cultural Significance of the Oil Industry

Our analysis leads to seven key findings, each with implications for other oil- and gas-producing communities and policymakers:

• Planning for diversification before decline can reduce risk: While oil extraction and refining were major parts of the Oil Region's economy from the 1850s to the late twentieth century, other anchor industries, including steel and banking, were also present. Negative shocks occurred across multiple industries (and for multiple reasons) over a period of decades, leading to a sustained economic downturn. The Oil Region's experience highlights the importance of anticipating-and planning for-economic shocks before they occur, even in regions that appear economically diversified. As one interviewee noted, "nothing is forever." Regions with currently booming oil and gas production are at risk of facing similar economic challenges.
• Retaining existing industries while attracting new opportunities can build economic diversification: All interviewees agreed on the need to create a diversified economy for the future, but tensions exist over what industries offer most promise. Older residents were reported to favor large-scale manufacturing, with younger residents leaning into the region's outdoor recreation and tourism potential. Decisions about which industries to pursue should be grounded in honest assessments of a region's strengths and limitations (e.g., workforce, geography, infrastructure) rather than in nostalgia or aspiration alone. Local collaboration can unite stakeholders around a shared vision for the future.
• Saving money for the future can support economic resilience and environmental restoration: One of the Oil Region's success stories is the handful of private financial trusts created by wealthy individuals during and after the oil boom, which continue to provide philanthropic dollars for important causes such as local economic revitalization. Still, there is no state or local policy to systematically save the wealth generated by extraction activities. Creating public savings mechanisms could help communities maximize economic benefits from oil and gas activities and better weather downturns in the industry. In addition, policy mechanisms in Pennsylvania do not fully incentivize companies to set aside funds to decommission their oil and gas wells. Policies that ensure oil and gas companies set aside sufficient decommissioning funds can prevent the proliferation of orphaned wells, a major issue in the Oil Region.
• State and federal support has been beneficial but could be more flexible: A range of state and federal programs have supported economic development in the Oil Region, but interviewees commonly critiqued federal programs for their detailed requirements and inflexibility, and they cited their lack of capacity to apply for and administer complex federal grants. Streamlining grant processes, allowing greater flexibility in how funds are used, and increasing support for local governments' staffing could help better serve local priorities. However, federal policymakers will need to weigh these benefits against concerns about accountability and oversight.
• Investments in people and placemaking can create vibrant communities: The three cities' efforts to create vibrant and livable communities-restoring picturesque downtowns, supporting arts and culture, and hosting community events-have been led by dedicated individuals who are investing time and money in the region's future, often driven by a sense of local pride. Investments in placemaking can attract and retain talented individuals, and targeted support to develop local leadership capacity (such as financing and technical assistance for local entrepreneurs) can enable residents to contribute to local economic development efforts.
• A declining population necessitates collaboration and shared governance: As industries left the Oil Region, the population steadily declined, shrinking the local tax base. A patchwork of government services and institutions remain, including numerous school districts, fire and police departments, and economic development organizations, which some interviewees saw as a potentially inefficient way to serve the region's population. Population decline may necessitate difficult and politically fraught conversations about consolidating government services across jurisdictions to conserve public dollars and increase collaboration.
• A tale of three cities: Oil City, Franklin, and Titusville display notable differences in economic outcomes, with Franklin generally performing best across multiple indicators. Franklin's planned city layout (designed by the same surveyor who helped plan Washington, DC) was regularly raised as a central reason for its success, with interviewees noting that investments in urban planning during times of growth can minimize sprawl and limit blight in periods of decline. Interviewees also cited Franklin's status as county seat, its success in hosting large events, and the social entrepreneurship of a handful of dedicated individuals as contributors to its success. The differences across the region's three cities underscore that, whether in the Oil Region or elsewhere, policymakers should recognize that oil- and gas-producing regions are rarely homogeneous; regional or county economic averages may obscure differences across communities, and policy interventions designed at the regional level may fail to reach those most in need.

The Oil Region is situated in northwestern Pennsylvania (Figure 1). It comprises all of Venango County and the southeastern corner of Crawford County around the city of Titusville, where the world's first commercial oil well was drilled in 1859 (Yergin 1990, 29).

Native American Tribes, including the Haudenosaunee Confederacy, The Haudenosaunee were also referred to as the Iroquois Confederacy by the English. had long inhabited this region by the time white settlers arrived in the eighteenth century and pursued the removal of Tribal nations during the following decades (John and Puglionesi 2023). In the mid-eighteenth century, during the French and Indian War and Revolutionary War, the British and the French established military forts in the Oil Region along the Allegheny River. The Allegheny also served as a transport route for several commodities, the most central being lumber. Sawmills, grist mills, and woolen mills dotted the region, particularly around the city of Franklin, in the early nineteenth century (Oil Region Alliance n.d.). In some locations, iron ore was smelted and shipped south to Pittsburgh to feed the city's steel industry (Oil Region Alliance 2023a).

Figure 1. Map of the Oil Region

2.1. The Birth of an Industry

Even before commercial oil production began, oil had been consumed in the Oil Region and elsewhere for centuries. Oil Creek, a tributary of the Allegheny, was so named for the oil slicks known to float on its surface, which the Seneca Nation of the Haudenosaunee Confederacy skimmed for medicinal salves and other purposes (McElwee et al.; John and Puglionesi 2023). Because of these naturally-occurring oil seeps, prospectors suspected that "rock oil" could be developed commercially in the region to produce kerosene for lighting, leading exploration to begin in the 1850s (Yergin 1990).

In August 1859, Edwin Drake-who had been sent to the region by the Seneca Oil Company The Seneca Oil Company has no relation to the Seneca Nation; petroleum was colloquially called "Seneca oil" at this time, referring to the Nation's traditional use of the product (John and Puglionesi 2023). of New Haven, Connecticut to drill wells-struck oil at a site near Oil Creek in Titusville. Following Drake's discovery, wells began to proliferate throughout the region. One local historian described that, in the decade following Drake's discovery, "derricks were erected in every conceivable locality. Oil wells were drilled in front yards, in gardens, or in the bottom of wells that had previously supplied drinking water" (Bell 1890). This early drilling was entirely unregulated, with no entity tracking where wells were drilled and who owned them. As a result, many of the thousands of wells drilled during this time were later abandoned with no plugging or site restoration. By the end of 1859, wells in northwestern Pennsylvania had cumulatively produced roughly 4,500 barrels of oil, which soon ballooned to 3 million barrels in 1862 (American Chemical Society).

The population similarly boomed in the years following Drake's discovery, as workers and prospectors flooded the region. Previously tiny settlements like Pithole exploded from seven families to 15,000 people in just nine months in 1865, and aptly named, hastily-constructed towns like Red Hot careened into existence to support an influx of workers (Oil Region Alliance 2023a). One local writer described how the region " … is now the rendezvous of strangers eager for speculation … Never has a hive of bees in time of swarming more astir, or making a greater buzz" (Yergin 1990, 29).

Figure 2. Pithole, Pennsylvania, in 1865

Originally shipped out of the region in leaky barrels along the Allegheny River, oil began to be transported by pipeline and rail as the local industry grew. In 1865, Samuel Van Syckle built the first successful oil pipeline, connecting a Pithole oil field to a rail station roughly five miles away (Bell 1890). Railroads linked the region with population centers like Pittsburgh, New York, and Cleveland, allowing the Oil Region's products to be distributed nationally.

At its peak, the Oil Region was a center of wealth and activity. At one point, Pithole boasted the third-busiest post office in Pennsylvania (Drake Well Museum and Park). Oil riches allowed families to build ornate, Victorian-style mansions across the region, many of which are still preserved today (Etzel 2022).

Figure 3. Homes in Oil City, PA

2.2. The Long Goodbye

Roughly a decade after Drake's discovery, oil exploration began to move out of the Oil Region. By 1869, exploration had expanded south, and the city of Bradford (northwest of the Oil Region) experienced a boom by 1875 (USDA Forest Service 2026). While this expansion didn't immediately end the oil era in Venango and Crawford counties, it did mark the beginning of the local industry's century-long decline. Production peaked in the Oil Region in the 1870s, after which point it began a steady decline as production in other parts of the state grew (Williamson and Daum 1959, 378).

As production began to decline in the Oil Region's fields, some of the boomtowns began to fade or even disappear. After drops in oil prices, a corresponding exodus of workers, and several disastrous fires, Pithole's population plummeted in the years following its boom, with the town dissolving by 1877 (Drake Well Museum and Park). Towns like Red Hot and Petroleum Center followed a similar path.

This collapse did not happen uniformly across the region; the bust was quickest and harshest in boomtowns built to service specific fields. More economically diversified communities like Oil City, Franklin, and Emlenton-which were hubs for banking, corporate offices, oil transport, refining, and industry support services-prospered during much of the twentieth century.

One key to these communities' success was the growth of several nationally significant refining companies founded in the early twentieth century, most notably Pennzoil, Quaker State, and Wolf's Head-which processed crude oil into lubricants and other petroleum products. These companies operated refineries and maintained corporate headquarters in the region for decades, anchoring the Oil Region's economy long after production had peaked.

But as new discoveries proliferated in other states in the late nineteenth and early twentieth centuries, oil booms in California, Texas, Oklahoma, and elsewhere soon outstripped Pennsylvania's production, leaving the Oil Region increasingly less competitive (American Petroleum Institute 1984). In the decades that followed, anchor companies relocated their headquarters from the Oil Region, with Pennzoil moving to Houston in 1965 and Quaker State heading to Dallas in 1995 (Oil Region Alliance 2023a; Chicago Tribune 1995). Although both companies operated refineries in the Oil Region after their corporate relocation, their last refineries closed in 2000 (Oil Region Alliance 2023b; UPI 2000), marking the end of the oil industry's "long goodbye" to the region.

2.3. The Oil Region Today

The petroleum industry remains central to the Oil Region's identity today. Oil-centric tourism opportunities abound, including numerous museums that tell the story of the industry's origin. Outdoor recreation opportunities also bring visitors, including Oil Creek State Park, which abuts the Drake Well Museum, a state-operated museum that highlights the industry's local history and showcases some of its vintage equipment alongside a network of hiking and biking trails.

The Oil Region is home to a much smaller population today, as the area has contended with families leaving with their employers and youth seeking educational or job opportunities elsewhere and not returning (i.e., "brain drain"). Venango County's population decreased by 21 percent from 1970-2024, a steep drop compared to most neighboring counties (Figure 4). Locally, the "Oil Region" refers to all of Venango County and a portion of Crawford County. We focus on Venango County in this section because data are not available for the relevant portion of Crawford County.

The Oil Region now hosts a mix of economic activity, most of it nonindustrial. Schools, restaurants, and hospitals are now the top employing industries in Venango County, though some manufacturing sectors remain large employers, including electronic components manufacturers and iron and steel mills (Center for Workforce Information & Analysis 2026).

Despite the relatively large population decline, economic trends in Venango County appear generally similar to its neighbors. For example, median household income in Venango County is slightly higher than most of its neighbors (Figure 5). Still, county income levels trail the state average, which is heavily influenced by major cities like Philadelphia and Pittsburgh.

Figure 4. Population Relative to 1970 in Pennsylvania, Venango, and Surrounding Counties

Figure 5. Median Household Income in Pennsylvania, Venango, and Surrounding Counties (2024 US$)

Across the three cities which today account for the bulk of the Oil Region economy-Franklin, Oil City, and Titusville-economic and demographic conditions vary considerably (see Table 1). Oil City is the largest by population, though all three cities are small by national standards. Titusville may face the most significant economic challenges, with lower income levels and higher poverty rates than either Franklin or Oil City.

Table 1. Demographic, Income, and Housing Data across Oil Region Cities

Property values in Franklin are notably higher across several measures. Franklin also stands out for its relatively higher educational attainment, with a larger share of adults holding at least a bachelor's degree compared to Oil City or Titusville. (This dynamic may stem from Franklin's status as the seat of Venango County's government, which creates a steady base of white-collar workers.)

In Section 4, we describe some of the underlying causes for the similarities and differences in economic conditions across the three cities.

This section describes the major takeaways from our interviews and associated research, as well as their implications for policy options in oil- and gas-reliant regions.

4.1. Planning for Diversification Before Decline Can Reduce Risk

Many interviewees highlighted the importance of early planning and economic diversification to protect against downturns in an anchor industry. Several interviewees stressed that these downturns could come about at any time in oil- and gas-producing regions, whether due to geology, natural disasters, market shifts, individual business decisions, or other factors. One interviewee advised other US regions where the oil and gas industry continues to play a leading role in the local economy as follows:

"Diversify and lean out. [The oil and gas industry is] always a bubble. It may be a 100-year bubble, but it's always a bubble."

The case of Oil City, however, highlights that even local economies with multiple anchor industries can be vulnerable. Through the mid-twentieth century, Oil City boasted high-paying blue-collar jobs in oil and steel industries with white-collar jobs at corporate headquarters for refiners and banks. But the closure of the region's refineries, relocation of refining company headquarters (to Texas), consolidation of the banking industry, and reduced regional demand for steel shocked the city's economy during the 1980s through the early 2000s. As one interviewee put it:

"It wasn't a steel town; it wasn't an oil town; it wasn't a banking town. It was all three things. And if you asked someone at that point in time, 'Well my gosh, one thing goes down, we're all good!' But you know, there's no such thing as an invincible economy."

This reality points to the need for local officials to anticipate and prepare for the potential for downturns across multiple industries, which can occur due to systemic risks. Early planning, if successful, can create a shared vision for a region's future. Although not all stakeholders will agree on how any given community should adapt to the decline of key industries, a common vision allows economic development practitioners to pursue a shared strategy and complement one another's efforts. As one interviewee recommended:

"Be prepared for your rebirth. Because the industry is going to change, so you know what's coming. Start to have those conversations now about what your future looks like, what you want it to look like, and how you're going to get there."

Interviewees reported they could have been better prepared for industry changes if there were more coordination with industries before and after they departed. Interviewees noted that the relocation of corporate headquarters for refining companies largely came as a surprise, with few systems put in place to help employees and cities adjust to their loss. Although it will not be possible to anticipate all corporate decisions, consistent communication with industry can increase the likelihood that local stakeholders might anticipate major decisions (e.g., the closure of a plant or relocation of an organization's headquarters).

It would also be useful for major employers to notify local stakeholders about relocation or consolidation plans well before they affect a community. Of course, it is not always possible for companies to know their medium- and long-term plans with certainty. Uncertainty related to closure of major industrial facilities has been a major theme in the energy sector in recent years (e.g., Roemer and Haggerty 2021; Grubert and Hastings-Simon 2022).

4.2. Retaining Existing Industries While Attracting New Opportunities Can Build Economic Diversification

Recognizing the importance of diversification, all interviewees agreed on the need for the Oil Region's future economy to be made up of many puzzle pieces, from tourism to retail to manufacturing. Where disagreement exists, however, is on how large each of these puzzle pieces should be. Several interviewees reported generational tensions, with older residents seeking a return to "like it was," with major manufacturers anchoring the economy. As one interviewee noted:

"I think there's a perception for some people that if you're not announcing a 400,000-square-foot plant being built with 500 jobs, then you're not really doing economic development."

Although interviewees believed that attracting new manufacturing would be desirable, some did not see it as particularly likely given that the Oil Region may lack the geographic connectivity or workforce that manufacturers often look for in new sites. With small- to medium-sized manufacturing playing a substantial role in the Oil Region's economy today, economic development practitioners were mostly focused on retaining and expanding existing facilities rather than attracting new ones.

Interviewees consistently highlighted outdoor recreation and tourism as industries that have successfully expanded in recent years, with potential for further growth. These industries' rise has been driven by local investment in the region's outdoor assets, including the restoration of natural amenities (since, in the early days of the oil boom, water, soil, and air pollution were rampant in the region) and the proactive preservation of land like Two Mile Run County Park. Several interviewees described themselves as beneficiaries of previous leaders' investments in the natural environment, suggesting that effective pollution prevention, coupled with restoration and preservation, can pay future dividends in oil and gas communities after production subsides.

However, interviewees also acknowledged that outdoor recreation and tourism were unlikely to bring the high-paying jobs and other local economic benefits seen in the oil industry or larger-scale manufacturing. To capture more value from these industries, one interviewee suggested helping local entrepreneurs create businesses that could boost local tourist spending, such as equipment rentals or lodges within state parks. While several local entrepreneurs have sought to establish such businesses, this interviewee reported they faced significant challenges acquiring approval to operate in state parks. Dialogue between local economic development officials and the Pennsylvania Department of Conservation and Natural Resources-which manages state parks-could clarify these dual-use issues and create frameworks for recreational businesses to responsibly access state lands in the Oil Region.

Another key impediment to growing the outdoor recreation sector in the Oil Region is a lack of lodging, particularly modern hotels. While the region had no shortage of lodging in the mid-to-late twentieth century, several hotels have since closed. Interviewees reported that those which remain require significant upgrades. Although the rise of digital applications such as Airbnb has helped to reduce this barrier, our interviewees repeatedly noted that more abundant and newer hotels could attract more visitors.

Another consistent theme was that economic development efforts would be most effective if they were built from the "ground up," with strategies developed by local stakeholders and supported by state and federal resources (i.e., with technical and financial assistance). These sentiments are consistent with findings from previous work in other energy-producing regions of the United States (e.g., Dalbey and Raimi 2024; Raimi and Whitlock 2024). Importantly, local decisions about which industries to pursue should be grounded in honest assessments of a region's strengths and limitations (e.g., workforce, geography, infrastructure) rather than in nostalgia or aspiration alone. Conducting industry-specific studies, as the Northwest Commission is currently doing with the outdoor recreation sector, can provide the data needed to inform decisionmaking.

4.3. Saving Money for the Future Can Support Economic Resilience and Environmental Restoration

One of the Oil Region's success stories is retaining some of the wealth generated from the oil boom. During the region's economic heyday, a small number of wealthy individuals created financial trusts that continue to benefit the community. Economic development practitioners described these philanthropic organizations as vital sources of matching funds for state and federal grants, as well as for other innovative local programs, like a Shark Tank-style "challenge" to grow business ideas in Franklin (Venango Area Chamber of Commerce 2025). As one interviewee noted:

"We are beneficiaries of the wealth that was left from the past … We have the ability to capitalize on their foresight."

While the foresight of private individuals has helped the Oil Region, the public sector did not create any mechanisms to systematically save wealth generated by the oil boom. Unlike most other states, Pennsylvania does not levy a severance tax on oil and gas production, nor does it allow local governments to apply their local property tax rates to the value of oil and gas property. And unlike several other US states (and some Tribal nations and other countries), Pennsylvania does not invest any revenue generated by oil and gas production into permanent savings funds that are designed to benefit future generations (Newell and Raimi 2018; Raimi and Whitlock 2025). Creating savings funds and channeling those dollars to producing communities can provide durable benefits long after the industry subsides.

In addition to saving wealth to support long-term economic well-being, the Oil Region also demonstrates the importance of setting aside funds for environmental restoration. As noted in Section 2.1, the lack of regulation on early oil development has led to hundreds of thousands of orphaned wells in the region. Recent research has shown that orphaned wells, if left unplugged, can deter local investment and reduce local property values, among other impacts (Harleman et al. 2022). Implementing regulations to reduce the risk of more wells becoming orphaned will lower the likelihood that local economies will suffer economic harm from the legacy of the oil and gas industry. However, even today, Pennsylvania and many other states fail to sufficiently incentivize oil and gas companies to plug and restore well sites at their end of their useful lives (Davis 2015; Ho et al. 2018; Boomhower 2019; Raimi et al. 2021). Implementing higher bonding levels, idle well fees, and well transfer fees would reduce the risk that millions of operating oil and gas wells will become orphaned in the coming decades (Armitage et al. 2026).

4.4. Investments in People and Placemaking Can Create Vibrant Communities

One recurring theme through our interviews was the importance of individuals in shaping local economic outcomes. We also repeatedly heard about the importance of creating vibrant communities to attract these people and encourage them to invest-whether through time or money-locally. Indeed, economic development practitioners repeatedly noted a strong culture of social entrepreneurship as one of the Oil Region's greatest strengths, sharing multiple stories of individuals seeking to make the Oil Region a more attractive place to live and visit.

In Franklin, one celebrated economic development professional led efforts to establish a series of events (such as Applefest, multiple concert series, and more) that attract tens of thousands of people to the city each year, demonstrating the outsized impact a single passionate individual can have on a small city. Interviewees also stated that volunteerism is robust in Franklin, as many individuals donate their time and effort to making these events successful. One interviewee stated that Franklin residents' commitment to community development was driven by pride in the city's appearance. Franklin's success in placemaking-fostering a picturesque downtown with newly renovated facades, a historic courthouse, and a well-kept town square-has bred a community that works hard to keep the city attractive. Reflecting this, some Franklin residents have bought up old buildings to keep ownership local, preventing absentee owners from neglecting their properties (an ongoing issue in Oil City, according to our interviewees).

In Oil City, several former residents have returned to the city to bring new amenities and initiatives to the community. One Oil City man returned from living overseas to create a unique, large-scale brewery and restaurant in a former historic bank, the renovation of which was supported by multiple federal grants. Another Oil City-raised individual recently initiated the Drake Energy Forum, an annual energy conference that attracts industry and government leaders from across the United States and abroad, and which is designed in part to showcase and grow the Oil Region's economy (Drake Energy Forum 2026). Oil City also runs a program to attract artists, including through streamlined zoning, financing, and access to studio space in a rehabilitated historic building (ARTS Oil City 2014a). Since the program was established in 2006, more than 30 artists have relocated and now contribute to the city's cultural vibrancy (ARTS Oil City 2014b).

In Titusville, multiple local entrepreneurs have launched businesses at the Mercantile, a city-run retail incubator, then subsequently "graduated" from the incubator and expanded in new locations (The Merc n.d.). Titusville also offers lessons in cultivating entrepreneurship early on. The Titusville Area School District offers a curriculum through which students develop business ideas and work with companies in the community to make them a reality. Supported by a $200,000 grant from Pennsylvania's Department of Community and Economic Development, the district formed a student-run manufacturing enterprise, Titusville Rocket Manufacturing, which has manufactured and supplied products to multiple local businesses in the defense industry while students receive mentorship and skills training (NWIRC 2023). Such programs can pay dividends not only by equipping students with skills, but also by helping them envision career pathways close to home.

For other communities, the implications are clear: investing in local amenities like vibrant downtowns, the arts, and community-building events can retain and attract talented individuals who want to contribute to community development. Similarly, providing resources for residents to become entrepreneurs in business or civic life, whether through school curricula, business incubation initiatives, or funding programs, can empower individuals to co-create a strong local economy.

4.5. State and Federal Support Has Been Beneficial, but Could be More Flexible

Interviewees reported that some state and federal economic development programs have provided benefits for the local economy. Specifically, local economic development practitioners praised the US Environmental Protection Agency's brownfields program as a successful model to help remediate contaminated urban sites and return them to productive use. They also noted the benefits that came with the National Park Service designating the Oil Region a National Heritage Area in 2004, which helps attract visitors from around the world, along with benefits created by grants from the Appalachian Regional Commission's Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative (Shelton et al. 2022).

Other federal programs were described as comparatively unsuccessful, largely due to the complexity of applying for and managing programs. For example, parts of Oil City and Franklin qualify as federal "Opportunity Zones," which provides tax benefits for those who invest in designated, "economically distressed" Census tracts (US Department of Housing and Urban Development). However, local practitioners were not aware of any direct investment arising from the presence of the Opportunity Zones, in part because practitioners had no capacity to seek out investors to make them aware of the potential opportunity. It is possible that private individuals benefited from investing in qualified Opportunity Zones and our interviewees were not aware of those benefits. In addition, one interviewee reported an indirect benefit of the program: projects located in an Opportunity Zone seeking federal funding may be viewed more favorably by grant reviewers.

A lack of staff capacity was regularly cited as a central factor preventing economic development practitioners from accessing more federal funds. In the words of one interviewee:

"In these small municipalities you don't have enough money for staff to capitalize on what's out there. We know that stuff is out there. But there's not enough money to hire enough staff to do the research, to get the money, to help ourselves."

Putting more federal funds into grant programs that support new staff positions at local governments and economic development organizations could be one policy solution to address this challenge.

Federal programs' lack of flexibility was another common theme. The federal government often restricts how its funding can be used, whether out of concerns about wasteful spending or in service of broader national policy goals (e.g., requiring grantees to pay prevailing wages). As exemplified by interviewees' feedback, federal policymakers should consider the trade-offs associated with imposing these restrictions.

Several interviewees reported needing to adapt their projects to meet the requirements of federal grant programs, sometimes in frustrating ways. They also reported difficulty making the case that certain local investments-like a building rehabilitation project-would create the concrete economic outcomes (measured in jobs or increased revenue generation) that federal programs often require applicants to demonstrate.

As a result, our interviewees generally preferred block grant-style support, where local decision-makers have more control over how state or federal dollars are invested. However, some stipulations of the federal Community Development Block Grant (CDBG) program, such as stringent prevailing wage requirements, were seen by some as an impediment. Interviewees also believed that inaccurate Census data on the local low- and moderate-income population reduced the size of the region's CDBG allocations, with no practical opportunities for redress.

State policies were also seen as mixed. State dollars are key to the Drake Well Museum, and one organization reported that state grants to remediate streams were an effective tool to attract visitors. Specific initiatives that interviewees mentioned as helpful were Keystone Opportunity Zones, Main Street Matters, and the Redevelopment Capital Assistance Program. Several interviewees noted that applying for and administering state grants was generally simpler than federal grants.

Conversely, several interviewees reported challenges stemming from the State Historic Preservation Office (SHPO). Both Oil City and Titusville have struggled to remove blighted buildings because much of the cities is designated as historic by SHPO, meaning lengthy approvals are required to undertake demolition, even for blighted properties. Creating an expedited SHPO approvals process for buildings in immediate need of demolition or restoration could be one strategy to help these cities more nimbly address blight. In Franklin, however, interviewees generally described preservation efforts as part of the city's success. Franklin has even established its own Historic and Architectural Review Board to increase local control over its historic buildings (City of Franklin n.d.).

Figure 6. The Authors at the Drake Well Museum in Titusville, PA

Overall, it appears that federal grant programs could be improved by reducing complexity and providing more flexibility, including for hiring staff. State programs appear to be more successful, although future research would be needed to assess whether our interviewees' positive perceptions reflect a broader consensus across Pennsylvania.

4.6. A Declining Population Necessitates Collaboration and Shared Governance

Population decline in the Oil Region has created several challenges, from a smaller tax base to fewer customers to sustain local businesses. While it can be tempting for regions to seek to grow again, several interviewees noted that it may not be possible for the Oil Region to return to its peak population or economic activity.

Still, in several ways, the Oil Region's governance infrastructure is a vestige from a once larger population. For instance, interviewees reported that each city in the region hosts its own school district, with 100 students or fewer in each twelfth grade graduating class. When each city had a larger population and financial resources, it made sense to sustain separate school districts, fire departments, police departments, Chambers of Commerce, and other services. Now, however, some interviewees suggested this structure may be inefficient. Although a small number of local institutions have merged in recent years-for instance, the Oil Region Alliance was created by consolidating four economic development nonprofits-several interviewees believed more could be done. For example, the number of school or fire districts in Venango County could be reduced, which would reduce overhead and increase resources for remaining staff.

This type of "regionalization" has been explored in the past but has not been widely adopted, in part due to the understandable pride in the services offered by local institutions (e.g., volunteer fire districts). Such an approach is also challenging because it would likely reduce employment in the region (the public and educational sectors are some of the top employers in Venango County) at a time when jobs are needed (Center for Workforce Information & Analysis 2026). Additional analysis on the pros and cons of regionalization across the Oil Region-coupled with community engagement to understand local priorities-could help deliver services more efficiently without compromising each community's unique identity.

4.6. A Tale of Three Cities

Oil- and gas-producing regions are often characterized as single geographic entities, such as the Permian Basin, the Bakken shale play, and Pennsylvania's Oil Region. While this aggregation can be useful, it can also obscure important variations in economic outcomes within a region. The Oil Region is a case in point. As noted in Section 2.3, Franklin, Oil City, and Titusville have followed meaningfully different economic trajectories. By most measures, Franklin appears the most economically prosperous of the three, while Titusville shows the most signs of distress. This finding was echoed consistently by our interviewees, who frequently drew comparisons between Franklin and Oil City in particular, which are separated by only about 10 miles. As such, policymakers should avoid treating oil and gas regions as homogenous economic units. Policy interventions designed at the regional level may fail to reach the communities within a region that are most in need or may misattribute regional averages to places with very different underlying conditions.

Interviewees suggested differences across the three cities are attributable to a range of factors, some of which are controllable and some of which are not. For instance, as the county seat of Venango County, Franklin enjoyed a base of stable public sector employment that provided a degree of insulation from the boom-and-bust cycles of the oil industry. Geography was also regularly cited as a reason why Franklin-located in a flat area closer to Interstate 80-might fare better than Oil City-built into a hillside and bisected by both a river and creek-or Titusville, whose distance from other cities leads to a higher level of economic isolation than either Franklin or Oil City.

Other reasons for Franklin's comparative economic resilience are more replicable, though. The city is a lesson in how effective local land-use planning can boost long-term economic outcomes. Franklin was intentionally laid out across 1,000 acres in 1795 by the same surveyor who helped plan Washington, DC (City of Franklin n.d.). As a result, Franklin's main commercial hub runs through a single street (Liberty Street) and effectively channels visitors through its downtown. Franklin's urban planning also placed its "sins on the backside," as one interviewee put it; while the city is not all picturesque, its blight and other less attractive features are comparatively hidden from view due to the city's layout. This advantageous layout-coupled with a city code that requires strict adherence to certain design standards-helps maintain an attractive appearance that one interviewee noted has raised property values and attracted businesses to the city.

Franklin's intentional design stands in contrast to Oil City: "the oil boomtown that didn't die," per one interviewee. Oil City "grew up wild-very, very fast" around the banks of the Allegheny River and Oil Creek. While Oil City features many of the picturesque characteristics of Franklin-a town square, numerous murals, preserved historic buildings, and mansion-studded residential streets-Oil City's commercial areas are more scattered and separated by bridges dividing north from south, with its main throughfares diverting traffic around, not through, commercial corridors. The sprawl that once accommodated Oil City's larger population and bustling economic activity-an economy that surpassed Franklin's at its peak-has now led to challenges maintaining public infrastructure and preventing blight. This contrast between Franklin and Oil City shows the long-term costs of failing to invest in urban planning during periods of rapid growth. Infrastructure decisions made during an oil rush can shape a community's economic geography for generations.

A final differentiating factor between the three cities is the way each of them treats their oil history. In downtown Oil City, the city's oil industry roots are highly visible. One mural, for instance, depicts a rainbow gushing from an oil derrick, while another declares the city the "hub of Oildom" (Figure 7). The city's name, its emblem-an oil derrick-and its high school athletic teams-the "Oilers"-all harken back to the industry's heyday. Even city storm drains are adorned with derricks gushing oil (Figure 8).

Titusville's downtown merges the old with the new. As shown in the photo in the Executive Summary, one mural illustrates the city's progression from the days before the oil rush, through to the discovery of oil and the industry's consolidation, and ending with a depiction of a family canoeing on a creek in a nod to the outdoor recreation industry that has become a staple for the community.

Figure 7. Mural in Oil City, PA, Declaring the City the "Hub of Oildom"

Figure 8. A Storm Drain in Oil City, PA

Franklin stands apart, as its oil history is barely noticeable. Indeed, several interviewees reported that Franklin has "completely divorced" itself from oil, instead marketing itself through its Victorian heritage and frequent events. Interviewees described this as an intentional strategy by Franklin's leadership beginning roughly 30 years ago. The success of this reinvention is due both to effective community visioning and leadership, as well as Franklin's status as a more diversified, well-preserved downtown. For Oil City and Titusville, a similar "divorce" from oil may not be desirable or possible due to both cities' deep historical connections with the industry.

The differences between these three cities underscore the themes we heard across all our interviews: intentionally planning for growth, diversifying an economic base early, and creating, then implementing, a strong vision for the future can help oil- and gas-producing communities create resilient economies built for the long term.

The economy of Pennsylvania's Oil Region has evolved dramatically since 1859. After several booms and busts, the region is slowly adjusting to life without a major oil industry presence, even though oil remains central to much of the region's identity.

The slow departure of the oil industry in the region has led to multiple challenges-population decline, property blight, a desire for new jobs, a lack of suitable housing stock-many of which are shared across other regions in western Pennsylvania and across the country. Local economic development practitioners, elected officials, and entrepreneurs are working hard to address these challenges and retain businesses and residents while improving quality of life.

The region has also enjoyed numerous successes in recent years, supported in part by a robust regional economic development infrastructure that promotes collaboration and bolsters entrepreneurship. Local efforts have been complemented by state and federal resources which, while helpful in several cases, could be made more effective by supporting local priorities and minimizing administrative burdens.

Working in the country's first oil-producing region, economic development practitioners in the Oil Region have the gift of uncommonly long hindsight. Our interviews with them offer several crucial lessons for today's oil- and gas-producing communities, which are:

• proactively pursuing economic diversification,
• saving money to support future economic development and environmental restoration,
• nurturing local entrepreneurs while investing in placemaking,
• adapting government services to a declining population base; and,
• undertaking urban planning to effectively manage rapid growth.

Perhaps above all, the Oil Region offers a lesson on the importance of early and detailed planning for a future where the oil and gas industry (and related industries) fades away. This planning is essential even in oil and gas communities which-like the Oil Region across much of the twentieth century-appear to enjoy robust, diversified economies. Stakeholders will naturally differ on details such as the best approaches to develop new industries, but creating a shared vision for an economic future can enable coordinated action between policymakers, economic development practitioners, and the private sector. In the words of President Franklin Delano Roosevelt:

"Do something. If it works, do more of it. If it doesn't, do something else."

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