Skip to content

New economic study: fracking risks reduce value of properties dependent on groundwater

November 5, 2012

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.”

Read the study here and Amy Mall’s report about it on her excellent blog here.

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.

5 Comments
  1. November 5, 2012 9:06 am

    In the next couple of weeks I will file at the Jefferson County Courthouse “The Dr Lucinda Hart-Gonzalez Conservation Easement” for my 50-acre organic farm. It will honor my late wife Lucinda who died one year ago as of November 14. It will also preserve this farm as organic and, for the first time by a private landowner (I am told by the Community Environmental Legal Defense Fund), recognize, create and secure the Rights of Nature and its ecosystems and natural communities present on, above and below this farm. My lawyer in Punxsutawney tells me the Easement will reduce the value of this farm, perhaps make it impossible to sell, but I know that fracking is much more likely to do that. If I ever do decide to sell this farm, which is not likely, I know there is a growing number of people who would happily buy it with the Easement in place, knowing that they are buying into the preservation of an organic farm and a the protections afforded by those sections of the Easement that will bring legal help to me or my successor if any attempt is made to attack Nature as present within and manifested by the ecosystems and natural communities that exist on, and those that are dependent upon this farm. Here in draft form are the relevant portions of the Easement. When it is filed, I will publish the entire Easement on my blog at http://angerandcourage.wordpress.com/

    1.01 Conservation Objectives
    By this Grant, the undersigned Owner imposes a conservation servitude (the “Conservation Easement”) on the Property that recognizes, creates and secures the Rights of Nature and its ecosystems and natural communities on the Property (collectively, the “Conservation Objectives”) set forth below, and then prohibits and limits those activities that would violate those rights. In addition, the Conservation Easement requires that the Property remain forever in use as an organic farm abiding by guidelines and regulations promulgated by the United States Department of Agriculture’s National Organic Standards or its successor in law.

    (a) Rights of Nature Objectives – the primary objective of this easement is to recognize, create and secure the Rights of Nature as present within and manifested by the ecosystems and natural communities that exist on, and those that are dependent upon, the Property, to exist, flourish, and naturally evolve. Ecosystems and natural communities shall include, but not be limited to, the following systems and communities –
    (i) Water Ecosystems. To recognize, create, and secure the rights of streams, rivers, groundwater, surface water, and waterways to exist, flourish, and naturally evolve.
    (ii) Atmospheric Ecosystems. To recognize, create and secure the rights of the atmosphere as it is created by Nature as a means of sustaining the lives of vegetative, animal and human life.
    (ii) Forest, Woodland and Other Vegetative Ecosystems. To recognize, createand secure the rights of forests, woodlands, and other vegetative systems to exist, flourish, and naturally evolve.
    (iii) Wildlife and Natural Communities. To recognize, create and secure the rights of wildlife, natural communities, and all subsurface life forms and ecosystems which comprise the “deep biosphere,” to exist, flourish, and naturally evolve.
    (iv) Sustainable Land Uses. To ensure that Agriculture, Forestry, and other uses, to the extent that they are permitted, are conducted in a manner that do not, and will not violate the rights of ecosystems and natural communities as created, recognized, and secured pursuant to this Grant.

    (b) Organic Agriculture Objective – beyond certain permitted improvements as described below in Artcile III below, the entirety of the Property shall remain in use as a USDA-certified organic farm.

  2. November 7, 2012 9:23 am

    The Kansas City Star, “Fracking can hurt property values of nearby homes with wells, study suggests” BY SEAN COCKERHAM

    Read more here: http://www.kansascity.com/2012/11/06/3903782/fracking-can-hurt-property-values.html#storylink=cpyhttp://www.kansascity.com/2012/11/06/3903782/fracking-can-hurt-property-values.html

Trackbacks

  1. Breaking: Hanger Challenges PA DEP to Disclose Drinking Water Contaminants « Protecting Our Waters
  2. Fracking Funnies: Water Half Clean « Protecting Our Waters
  3. One-man Ban: Pennsylvania Farmer Fights for His Land « Protecting Our Waters

Comments are closed.

%d bloggers like this: