New economic study: fracking risks reduce value of properties dependent on groundwater
While the fracking industry has gone into overdrive hyping the economic benefits of shale gas, evidence mounts that the industry’s jobs claims are wildly exaggerated, while economic costs from shale gas drilling escalate. A new National Bureau of Economic Research (NBER) working paper, from researchers at Resources for the Future and Duke University, shows that proximity to a shale gas well — even more than a mile away — can and does negatively impact property values.
Amy Mall reports, “The researchers looked at more than 19,000 properties sold over a five year period in Washington County, Pennsylvania, and controlled for neighborhood amenities and other factors. Among the findings:
- Concerns about groundwater risks associated with drilling “lead to a large and significant reduction in property values” and “These reductions offset any gains to the owners of groundwater-dependent properties from lease payments or improved local economic conditions, and may even lead to a net drop in prices.”
- Well drilling seems to have impacts on properties up to 2000 meters from a well –more than a mile.
- Properties dependent upon groundwater for their drinking water are more likely to experience negative changes in property values than properties that get their water from a piped-in municipal water supply.
- Local economic development and lease payments associated with shale development can boost the housing market substantially, but only if the property has access to a public water supply….
- Net negative impacts on property values could lead to “an increase in the likelihood of foreclosure in areas experiencing rapid growth of hydraulic fracturing.”
Debunking the Economic Myths of Shale Gas
Many experts are arguing that high-volume fracking’s economic costs outweigh the economic benefits. Three experts make this argument cogently on video from the “Frackonomics” forum in New York City (May 2012). A particularly powerful segment here is Janette Barth’s presentation at “Frackonomics: Debunking the Financial Myths of Shale Gas.” Better yet, watch the full forum, here on ShaleShock Media, with three experts: economist Janette Barth, financial analyst Deborah Rogers, and water systems expert Al Appleton.